Just as the economic recovery was solidifying and a sense of normalcy returning, along comes an energy crisis that threatens to blow everything off course. Record gas prices will be a key talking point as EU energy and transport ministers gather in Slovenia tomorrow. Some European industrial giants are already starting to feel the pain and concerns are mounting that the jump in prices could last into the winter, further boosting inflation and eroding demand. Italy is the latest country to dip into state finances to cushion the blow: Mario Draghi’s government will spend about 3.5 billion euros to protect consumers. Meanwhile, a group of lawmakers called on the Commission to investigate Gazprom’s alleged manipulation of natural gas prices, voicing concerns the state-controlled Russian company may use the surge in energy prices to politically pressure the bloc into starting up the controversial Nord Stream 2 pipeline. - Allegra Catelli

What’s Happening

Greenwashing Rules | Asset managers are about to get some eagerly awaited details on a key plank of Europe’s anti-greenwashing regulation. The fund industry faces a much tougher regulatory environment as financial watchdogs start to crack down on firms caught exaggerating or misstating the sustainability of their portfolios.

Payback Time | In a sign of airlines’ recovery from the worst of the pandemic, Lufthansa announced a 2.14 billion-euro rights offering that will be used to repay part of the German government’s bailout 18 months ago. Paying back the aid would free the company from conditions the European Commission attached to its approval of the deal. 

Election Debate | Christian Democrat Armin Laschet was put on the defensive in Germany’s third election debate as his two main rivals for the chancellery presented themselves as natural governing partners. In a 90-minute faceoff last night that was one of the last opportunities for Laschet to spark his flagging campaign, front-runner Olaf Scholz of the Social Democrats and Green candidate Annalena Baerbock at times joined forces. With less than a week until Sunday’s vote, read our trader’s guide to the election with everything you need to know. 

UNGA | The UN General Assembly kicks off in New York today and the pressure for nations to boost their efforts to cut carbon emissions is palpable. The meeting is among the final chances to build momentum around climate change as world leaders take stock of their commitments. It’s also an opportunity to build stronger relationships. 

Scant Credit | The amount of corporate bonds investors can trade in Europe is shrinking for the first time since 2005. According to Bloomberg calculations, there’s a 21 billion-euro drop in the investable pool of euro bonds because of calls, buybacks, upcoming redemptions and ECB debt purchases.

In Case You Missed It

Sub Spat | While Australia’s Scott Morrison denied any backstabbing in a deal that saw Paris lose its multibillion-dollar submarine contract, Joe Biden and Emmanuel Macron are set to speak by phone in the next days to clarify the situation. It’s still unclear what it will take to appease a very angry French president.

Driven Away | More than 200,000 EU citizens left the U.K. last year, driven away by Brexit and the deepest economic slump in three centuries. The loss helps to explain why Britain is experiencing labor shortages. Sectors such as retail and hospitality rely heavily on EU workers, and it’s unclear how many of those who left the country will return. 

Price Pressure | The euro area’s inflation outlook may turn out higher than currently anticipated if the coronavirus doesn’t inflict further shocks, said ECB Governing Council member Martins Kazaks. Persistent supply bottlenecks and rising expectations all point to faster-than-forecast gains.

Chart of the Day

European Central Bank policy makers signaled they see euro-area inflation potentially exceeding forecasts as the economy recovers and supply bottlenecks drive up input prices. The remarks reveal a more heated debate about the central bank’s ultra-loose policy.

Today’s Agenda (All times C.E.T.)

• EU Commission President Ursula von der Leyen and EU Council Head Charles Michel attend UN General Assembly in New York
• EU Energy Commissioner Kadri Simson speaks at the European Economic Congress in Slovenia
• EU Economy Commissioner Paolo Gentiloni travels to Dublin for a hearing in the EU Affairs Committee meeting
• 10 a.m. German Finance Minister Scholz testifies to a closed-door session of the Bundestag finance committee about this month's raid on his ministry