Brussels Edition: Ukraine squeezed

Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union

Kyiv is at the center of a war of words between Moscow and Washington as Russia maintains military pressure on Ukraine’s borders. Russia’s Sergei Lavrov told EU foreign policy chief Josep Borrell yesterday that he blamed Ukraine and its Western allies for the increasing tension. The Kremlin says the risk of military action is “high,” even as U.S. Secretary of State Antony Blinken warned Lavrov yesterday of “serious consequences” if Moscow makes a military move on Ukraine. Blinken urged the EU to start preparing a new package of “high-impact” economic sanctions for Moscow if President Vladimir Putin decides to attack. The bloc will discuss possible punitive measures when foreign ministers next meet on Dec. 13. - Jorge Valero

What’s Happening

Mandatory Vaccines | Countries continued to tighten restrictions to cope with rising Covid cases and the new omicron variant. Germany announced yesterday stricter measures on people who aren’t vaccinated, which is about 30% of its population. Outgoing chancellor Angela Merkel defended a proposal to make Covid shots mandatory, while her successor, Olaf Scholz, said the proposal is likely to pass in the Bundestag. 

Energy Battle | Member states clashed yesterday again over how to tackle the energy price spike in Europe. Spain, France, Italy, Greece and Romania proposed to amend existing laws on how prices are set. But Germany, Austria, the Netherlands, Denmark and others spoke against any measures that depart from the “competitive principles of our electricity and gas market design.”

Sticker Shock | Companies like Uber, Deliveroo and Bolt could pay 4.5 billion euros more each year under a forthcoming EU plan aimed at boosting the labor rights of gig workers. The risk assessment, which we’ve seen, said it wasn’t possible to calculate potential job losses, but as many as 4.1 million people working for food-delivery and ride-hailing apps could be reclassified as employees.

Orban Blocks | Hungary is blocking the EU from formally participating in President Joe Biden’s Summit for Democracy next week. That’s because Viktor Orban is the only EU leader who wasn’t invited to participate, we’re told. The virtual summit will bring together dozens of countries from around the world to talk about the challenges faced by democracies. China and Russia have also been excluded.

Brexit Call | EU Brexit chief Maros Sefcovic will try to make some progress today with his U.K. counterpart, David Frost, on the dispute over the Northern Ireland protocol, particularly on the transit of medicines. The virtual meeting comes after the island of Guernsey granted this week 40 licenses to EU vessels, easing the dispute between the U.K. and France over fishing permits.

In Case You Missed It

Belarusian Misinformation | Facebook found evidence that Belarus’s state security service used fake accounts to try to shift blame to Poland over the recent migrant crisis. Parent company Meta Platforms removed 45 fake Facebook and Instagram accounts and five groups in Belarus criticizing Polish border guards. The company also removed a network of 39 Facebook and Instagram accounts based in Poland “to dissuade migrants from entering the EU.”

Channel Letters| French Prime Minister Jean Castex wrote to Boris Johnson asking the British prime minister to do more to deter migrants from crossing the Channel. Castex renewed previous calls for the U.K. to put more checks on black-market work and requested more intelligence sharing. The disclosure of the letter’s content is a bit ironic since French officials complained Johnson published his own letter to Macron last week.

Conditionality Tool | A preliminary opinion of the European Court of Justice validated the EU’s new instrument to punish countries for backsliding on democratic standards. The court’s advocate general said the EU acted “on an appropriate legal basis” when it approved the conditionality mechanism. Hungary and Poland risk losing billions of euros if the court confirms the opinion early next year.

Sterling Lads | HSBC, Credit Suisse, Barclays and Royal Bank of Scotland were fined 344 million euros by the Commission yesterday for their involvement in a foreign-exchange cartel. Traders involved occasionally used a chatroom dubbed “Sterling Lads” to plot their buying and selling.

Not Wanted | EU electoral monitors are being kicked out of Venezuela days before their scheduled departure amid a clamp down by the government of Nicolas Maduro following last month’s elections. The bloc’s analysts and a handful of staff members will fly out this weekend after the foreign ministry refused to extend their visas, we’ve been told. 

Chart of the Day

THR

The EU carbon permits rally is set to surpass 100 euros a ton this year, according to Per Lekander, managing partner at Clean Energy Transition. Lekander has been one of a handful of investors betting that the permits will rise rapidly as the bloc makes use of the market to help achieve its climate goals this decade. At the same time, natural gas prices have soared, pushing utilities to burn more coal and increasing demand for carbon allowances. Carbon permits gained as much as 4% yesterday to a fresh record of 79.87 euros per metric ton on ICE Endex.

Today’s Agenda

  • EU communications ministers meet in Brussels
  • EU Vice President Sefcovic holds video call with U.K.’s Frost
  • Commission President Ursula von der Leyen and Council President Charles Michel meet Estonian President Alar Karis
  • Energy Commissioner Kadri Simson delivers speech at the 6th Central European Day of Energy
  • European Parliament President David Sassoli holds video call with U.S. House Speaker Nancy Pelosi
 
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