The EU may be about to take its most concrete steps yet to tackle the energy crisis, but it’s already becoming clear that they won’t be sufficient. Ministers gathering today in Brussels are set to back emergency measures to cut power use and redirect windfall profits of energy firms to households and businesses. And the bloc has already agreed on a voluntary target to cut gas consumption by 15% after Russia, its biggest supplier, slashed shipments. But more action is clearly needed to contain the energy crunch that’s fueling inflation and threatening recession, and the bloc apparently isn’t yet ready to agree on what else to do. Ministers are poised for a clash over how and whether to cap gas prices, but they also need to avoid steps that could make it even harder for Europe to cut energy use and make it safely through winter.

— Lyubov Pronina and Ewa Krukowska

What’s Happening

Russian Annexation | Russia vowed to push ahead today with the annexation of the parts of Ukraine that its troops currently control after UN-condemned votes, putting the Kremlin on a fresh collision course with the US and its allies. Russia will sign treaties to absorb the four regions in eastern and southern Ukraine at a Kremlin ceremony, with Vladimir Putin set to make an address.

Truss Trip | Liz Truss will attend a new European political “club of nations” next week in Prague, we’re told. That may come as welcome distraction for the UK prime minister, who’s showed no sign of backing down on her economic policies that forced an unprecedented £65 billion intervention from the Bank of England.

London Decline | Although the pound has recovered, the crisis of confidence in UK assets is running so deep that the country is close to losing its crown of Europe’s biggest equity market. This year’s decline in London stocks has reduced the combined market capitalization of companies with a primary UK listing to within touching distance of its nearest challenger, Paris, according to data we crunched.

Big Hike | The ECB should raise interest rates by another 75 basis points when it next sets policy in October, with steps likely to get smaller after that, according to Governing Council member Martins Kazaks. It’s likely that once rates are more consistent with the central bank’s inflation goal, future steps “will need to become somewhat more cautious,” he added.

Maltese Passports | Malta faces a lawsuit at the EU’s Court of Justice for its investor citizenship scheme, often referred to as golden passports, which allow the wealthy to live and work in the bloc. The investment migration industry has proven lucrative for Europe, where participating member states netted more than €21 billion between 2011 and 2019 from individuals in return for passports.

In Case You Missed It

Sapped Confidence | Euro-area economic confidence dropped to the lowest since 2020 this month as record inflation and the prospect of the first winter in a generation without Russian gas cast a shadow over the region. A measure of sentiment compiled by the commission fell to 93.7 in September, marking the seventh consecutive monthly decline.

Rich Tax | Spain announced plans for a new wealth tax as it continues to seek ways to raise funds to pay for social policies amid soaring inflation. The new levy will affect 23,000 people who have assets worth at least  €3 million a year for 2023 and 2024 and is expected to raise about €1.5 billion.  There will also be tax reductions for lower earners, worth about €1.88 billion over two years.

Finnish Visas | Finland will stop issuing tourist visas to Russians and plans to invalidate their tourist visas at the border, Foreign Minister Pekka Haavisto said. The decision comes into force today. The Nordic country cited potential harm to its international relations as a reason for the move, and said mobilization in Russia contributed to the decision.

Gas Guzzlers | Germany’s network regulator warned that households and companies used too much gas over the past week as temperatures dropped and said savings of at least 20% are needed to avert a shortage of the fuel this winter. Gas consumption was well above average, increasing by 14.5% compared with the mean for 2018-2021, it said.

Beer Fuel | Carlsberg has converted the brewery supplying beverages to its homeland of Denmark to run on oil instead of gas to avoid having to shut it down amid Europe’s escalating energy crisis. Danish authorities have this year included Carlsberg on a list of about 50 large gas users that won’t be protected in case the country needs to reduce gas consumption.

Chart of the Day

Germany reported double-digit annual inflation for the first time since the euro was introduced more than 20 years ago, with consumer prices surging more than anticipated after temporary government-relief measures ended and Europe’s energy crisis worsened. Inflation was at 10.9% in September, topping August’s 8.8% rate, the Federal Statistics Office said yesterday. The scale of the acceleration will trouble the ECB, which is struggling to tame soaring prices, whose persistent ascent is set to break another record when data are released today.

Today’s Agenda

All times CET.

• 9:30 a.m. Emergency meeting of EU energy ministers
• 2:30 p.m. Commission Vice President Margrethe Vestager speaks at an Institute of International and European Affairs event in Dublin