Did the EU exceed its powers by adopting a new tool to withhold money from nations backsliding on the rule of law? We may find out more today. That’s when the bloc’s top court will issue a non-binding opinion after Poland and Hungary disputed the validity of the move. The European Commission, which has been battling the two nations for years over issues from LGBTQ rights to climate policy, argues that the new powers it gained this year help keep in check nations that violate EU legal standards. It has, however, reassessed  its position, and President Ursula von der Leyen has said that the step wouldn't be triggered formally until a ruling from the EU Court of Justice, which is expected early next year. - Lyubov Pronina and Stephanie Bodoni

What’s Happening

Power Prices |  EU energy ministers will again discuss the impact of soaring power and gas prices at an extraordinary gathering today. They will also debate the ambitious climate and energy package proposed by the Commission in July, with particular focus on renewables and energy savings.

Ukraine Aid | Ukraine appealed to the EU for additional financial aid as the country struggles to meet its obligations and faces the threat of invasion by Russian troops massing on its borders. The Commission said it’s ready to provide further support as long as its package, likely to last for three years, runs in parallel with a new program of support from the IMF.

Belarus Sanctions |  EU member states are poised to approve sanctions on 17 individuals and 11 entities this week over a migrant crisis that the bloc blames on Belarus. Meanwhile, the EU’s executive arm proposed exceptional flexibility to its eastern members struggling with artificial migration from Belarus, suggesting that Latvia, Lithuania and Poland be allowed to take up to 16 weeks to process asylum requests.

Fishing Spat | The EU hailed the granting of a new batch of fishing licenses in a post-Brexit dispute that has poisoned Anglo-French relations, saying it sees a shared willingness to work toward an agreement later this month. Fisheries Commissioner Virginijus Sinkevicius told us that with the Channel Island of Guernsey granting 40 permanent licenses on Wednesday, almost 95% of all such permits requested by the bloc have been delivered since the beginning of 2021.

German Curbs | Germany’s Angela Merkel is stepping up pressure on the unvaccinated and pushing to exclude them from restaurants, movie theaters and non-essential shops. The proposals are part of measures to tackle the pandemic that the outgoing chancellor, who also backs mandatory Covid shots starting in February, her successor Olaf Scholz and Germany’s 16 state leaders are expected to agree on today.

China Strategy | U.S. and EU officials will discuss a joint approach to an increasingly assertive China during a high-level dialog today, agreeing that finding common ground on key issues makes it harder for Beijing to ignore them. Meanwhile, a new report suggests that China is fast expanding its influence on international technical standard setting, which could give it a strategic advantage in core emerging technology areas at the expense of Europe.

In Case You Missed It

$50 Billion | That’s the amount needed to vaccinate the world, a measure that’s key to ending the pandemic and tackling the imbalances “plaguing the recovery,” according to OECD Chief Economist Laurence Boone. By comparison, the Group of 20 countries spent $10 trillion to mitigate the economic impact of Covid-19.

Covid Tests | France is tightening rules on travel to contain the spread of the omicron variant of the coronavirus. Travelers coming from outside the EU will need to provide a negative test carried out in the 48 hours before entering France, even if they are vaccinated. Von der Leyen said that the EU should discuss whether mandatory vaccinations are needed to help fight the ongoing spike in Covid-19 cases, as well as the new omicron variant.

Irish Gold | The Irish central bank has bought two tons of gold in recent months, ending a more than decade-long period of unchanged holdings. While the institution has given no reason for the increase in its stockpile, Governor Gabriel Makhlouf last week warned that policy makers cannot afford to be complacent on inflation.

Hydrogen Risk | The EU’s plans to boost the role green hydrogen has to play in decarbonizing industry and transport could backfire in the form of “punishingly expensive” electricity costs if renewables are not also boosted, according to non-profit group T&E. There’s a risk that natural gas — which has seen prices soar to records — would be needed to plug the growing demand for electricity, which could rise by nearly a fifth by 2030.

Chart of the Day

It’s clearly too early to predict how the omicron variant of Covid-19 will shape the outlook for the euro area, but Bloomberg Economics has sketched out some worst- and best- case scenarios. Under the worst case, the new variant totally escapes vaccines, taking the economy back to early 2021 until an updated shot becomes available. That would cause the euro-area economy to shrink by about 2% in the first quarter. For the ECB, there’s no direct takeaway ahead of the December meeting. Still, if the strain is seen to have a substantial negative impact on the economy, the Pandemic Emergency Purchase Program could be extended, although the Governing Council needn’t rush a decision.

Today’s Agenda

• 1 a.m. German Chancellor Merkel holds talks with regional premiers on pandemic strategy, including plans for tighter restrictions
• EU energy ministers meet in Brussels to discuss energy prices and climate package
• ECJ preliminary ruling on validity of EU budget rule-of-law mechanism
• Commission President von der Leyen participates in the EU-LAC Leaders Meeting, via videoconference
• EU Trade Commissioner Dombrovskis participates in the ECB General Council meeting on “The economic effects of Next Generation EU” via videoconference
• Foreign policy chief Borrell participates at the 28th OSCE Ministerial Council in Stockholm
• Commission Vice President Jourova speaks via video-conference at the European Data Protection and Privacy Conference; meets via video-conference with Kent Walker, Senior Vice President for Global Affairs of Google
• EU Economy Commissioner Gentiloni speaks at the Rome Investment Forum 2021 in Rome