Expect a very heated debate when EU leaders meet in Brussels today. The first thing they’ll discuss is the energy crisis — an issue at the top of the political agenda for each and every government in the region. Power and gas prices are soaring, the heating season has started, and EU gas reserves are lower than in the past. Consumers and industrial giants alike are reeling from rising bills, and there’s little hope prices will fall before the winter ends. The situations has forced its way to the highest political level in the EU, and leaders are determined to show voters they’re acting. In their communique, they will pledge to “swiftly consider medium- and longer-term measures.” But there’s little new the bloc can do immediately to blunt the impact of the energy crunch. Instead, the debate is likely to become a proxy for talks on Europe’s energy transition and underscore the differences among member states on how to get to a net-zero future.

What’s Happening
Money First | Poland doesn’t want further talks on the EU climate pact until it receives access to recovery funds held up on concerns over rule-of-law issues. “It should be on our terms,” Waldemar Buda, a deputy minister of EU funds and regional development, told broadcaster Polsat yesterday. The summit will “touch upon” the Polish situation, Council President Charles Michel told leaders, a discussion that could get heated.

Big Tech | EU countries are delaying new rules to curb the power of Big Tech, saying they aim to reach a deal “as soon as possible” rather than the spring of 2022, according to draft summit conclusions we’ve seen. The Commission set an ambitious target of reaching deals on proposals with member states and the European Parliament next year, but the legislation is still under negotiation.

Weidmann Out | Bundesbank President Jens Weidmann is stepping down from his post at the end of the year. “More than ten years are a good measure of time to open a new chapter — for the Bundesbank, but also for me personally,” he said in a statement. As we heard, outgoing German Chancellor Angela Merkel will leave the decision on a successor to the next government, but the bank’s first female chief is one possible outcome.

Draghi for Chips | Governments need to fully commit to an EU plan to increase the bloc’s share of global semiconductor production to 20% by 2030, Italy’s Mario Draghi told lawmakers in Rome yesterday. “There are no alternatives to state intervention,” Draghi said, noting that subsidies from China and the U.S. range from 30% to 60% of the cost of a semiconductor plant. See what else he said. 

In Case You Missed It
Banks Without Plan | Several European banks are targeting carbon-neutrality without having a plan to cut exposure to polluting industries by 2030. They “systematically fail” to link the goals to concrete actions in the present and medium term, ECB Executive Board member Frank Elderson said yesterday. He reiterated a call for European banks to be required to have targets in line with those set in the 2015 Paris Agreement.

Libor Switch | Polish banks have won a last-minute reprieve from the Commission after it approved a replacement rate for Swiss franc Libor benchmark, which was set to expire at the end of the year. The EU’s executive has finally published regulation that will allow lenders to use compound SARON, an interbank lending benchmark, without clients’ approval. 

NATO Talks | NATO chief Jens Stoltenberg offered talks to Russia after the country cut back almost all remaining ties with the Western military bloc in retaliation for the expulsion of eight Russian diplomats earlier this month. He said he regretted the Russian move “which does not promote dialog and mutual understanding,” adding NATO will continue to assess “how we can further strengthen our deterrence and defense.” 

Green Security | The EU needs to include transitional economic activities in its rulebook for what counts as environmentally friendly to help boost the region’s nascent green bonds market, according to the financial market lobby group AFME.  The problem, it argues, is that current rules are too strict on assets that aren’t green yet, but will be after a transition process. But expanding the definition of what counts as green is a touchy subject.

Chart of the Day

The EU is considering easing pandemic travel restrictions by effectively scrapping the traffic-light system of green and red areas in the bloc that has been used to govern travel rules. One option would be to base it on the person, allowing anyone who has been vaccinated to travel freely, according to an informal Commission proposal we've seen. At the same time, there are some worrying Covid trends that could slow the push to relax the rules. Tuesday saw the most single-day confirmed deaths in Europe since April, with the seven-day average also on the rise. 

Today’s Agenda
All times CET.

1 p.m. NATO defense minister meeting in Brussels
2:45 p.m. Germany’s Social Democrats, Greens and Free Democrats give statement ahead of the start of formal coalition negotiations
3 p.m. EU leaders summit opens in Brussels 
Climate chief Frans Timmermans in India for meetings