The “sausage war” is alive and well, but the U.K and the EU have bought themselves some more time to find a solution. End-of-September deadlines for when chilled meats and fresh sausages would face customs checks before going into Northern Ireland from the rest of the U.K. have been deferred, Brexit Minister David Frost said yesterday. The inspections are part of a 2019 deal negotiated with the EU by Boris Johnson, which the U.K. says should be renegotiated. While the bloc reiterated that the accord can’t be redrawn, it suggested in a statement that it would go along with the latest extension of the grace period to allow talks to continue. Frost and Commission Vice President Maros Sefcovic will hold a call later this week, we’ve been told. 

— Alberto Nardelli and Aoife White

What’s Happening
Going Green | The EU’s landmark borrowing plan is about to go green, with the bloc soon set to start selling bonds with an environmentally friendly tag for the first time. Exactly how that will work will be laid out today by Budget Commissioner Johannes Hahn. But expect more details on the timeline and on how the proceeds of the biggest green issuance program in the world may be spent to ensure the bloc can’t be accused of greenwashing.

Coal Deaths | Pollution from coal-fired power stations on the EU’s southeastern border may cause thousands of deaths due to breaches of legally-binding limits on harmful emissions. The 18 coal plants operating in the Western Balkans produced 2.5 times as much harmful sulfur-dioxide emissions as all the 221 coal stations in the EU combined last year, according to a report by CEE Bankwatch Network and the Centre for Research on Energy and Clean Air.

Pfizer Boost | EU’s drug regulator has started a review of Pfizer’s vaccine booster dose application. The U.S. company wants the ok for Comirnaty to be given six months after the second dose to people aged 16 years and older. A decision is expected within the next few weeks. Last week, the EMA said there was no urgent need for widespread use of Covid-19 vaccine booster shots, though people with weakened immune systems should be offered a third dose.

Mental Health | The Group of 20 pledged more action to tackle the fallout of Covid-19 on mental health. The impact has been disproportionately hard on groups including women, older people, persons with disabilities, as well as the poorest and most vulnerable, health ministers said after meeting in Rome. They pledged to increase access to services and to better address mental health issues.

Recovery Plans | Czech and Irish recovery plans were approved by finance ministers. A total of 18 projects have now been signed off, unlocking billions of euros in funding that’s been pledged to help the region recover from the pandemic. While some pre-financing has already been paid out, the first regular payment request should come in later this month, EU Economy and Trade Commissioner Valdis Dombrovskis told a press conference. Scrutiny of Polish and Hungarian plans is still ongoing, amid a row over whether the EU may block funds over compliance issues. 

Carbon Market | Christian Democrats in the European People’s Party will get to choose a lawmaker to steer the biggest reform of the EU’s carbon market through the European Parliament. The EPP will choose a lead lawmaker for a draft bill to strengthen the Emissions Trading System, we’ve been told. The biggest group in the assembly will also get to nominate the leaders of proposals about aviation in the carbon market, the Climate Social Fund and national emissions-reduction goals outside the trading system. 

In Case You Missed It
Bank Tests | Banks are warning that they aren’t ready for the ECB’s climate stress tests next year, according to a survey conducted by Bloomberg. There’s universal agreement among 20 major European banks that they likely won’t have much of the client data they need for the tests until a year later. Banks are lobbying to ensure results aren’t made public, as those that fall short risk more onerous capital requirements, leaving less for shareholders.

LGBTQ Zones | The EU threatened to block as much as 126 million euros of cohesion funds to local Polish governments over anti-LGBTQ zones introduced in five provinces. Although Polish courts have ruled it illegal for towns and provinces to declare themselves “free of LGBTQ ideology,” the rhetoric may fuel fear and discrimination. The EU is also taking legal action against Hungary over separate legislation, saying it will defend the rights of LGBTQ people.

No Exit | Hungarian Prime Minister Viktor Orban ruled out an exit from the EU, according to a senior adviser, seeking to quell speculation fueled by statements made by some of his allies. The premier, who’s been embroiled in conflicts with the bloc on issues from power consolidation to LGBTQ rights, defended EU membership at an annual picnic of his supporters over the weekend, Deputy Minister Balazs Orban said.

Leader Jailed | Belarus jailed a key opposition leader for 11 years, intensifying a crackdown on pro-democracy activists. Maria Kalesnikava, who ripped up her passport to stop security agents expelling her from Belarus, was convicted of conspiracy to seize power and of leadership of an extremist organization at a closed-court hearing in Minsk yesterday. The EU said the 39-year-old was among more than 650 “political prisoners” in Belarus jails and called for their immediate release. 

Populist Support | Voter support for populist parties increased in six out of 27 EU member states and fell in eight over the past month, according to poll data compiled by Europe Elects, a Germany-based start-up that aggregates the results from pollsters operating across the EU.

Spain Bonds | Spain is set to raise 5 billion euros from its first green bond sale this week, one of a flurry of such deals expected this month. Green debt has helped drive sales of syndicated ethical bonds in Europe to a record 286 billion euros. The U.K. is also preparing an inaugural sale this month, and Germany will auction a new 10-year offering this week.

Grub’s Up | Europe’s pigs and chickens can be served insect protein from this week after food safety authorities ruled that mealworms, crickets and locusts are good enough to eat. Fish farmers already rely on insect feed and even humans have EU permission to chomp on mealworms. The market for insect feed has the potential to reach 500,000 tons by 2030, according to Rabobank.

Chart of the Day

Europe is facing an energy price shock this winter as natural gas and electricity surge to record highs. After a cold winter emptied stocks, a gas supply crunch is pushing up the cost of producing power just as businesses reopen and people return to the office. This may hit inflation, ultimately putting pressure on politicians trying to garner support for the energy transition. German inflation soared to 3.4% in August, well above the ECB’s target of 2% for the euro area. Another freezing winter could make things worse.

Today’s Agenda
All times CET.

• 8:20 a.m. EU Council President Charles Michel gives a speech at the Tallinn Digital Summit
• 11 a.m. EU GDP and employment numbers for second quarter released
• 12:30 p.m. High Representative Josep Borrell visits Iraq and holds meetings with leaders of the Kurdistan region
• EU Trade Commissioner Valdis Dombrovskis meets U.S. Secretary of Commerce Gina Raimondo