The EU will unveil in the coming days new sanctions against Russia following the recent discovery of more potential war crimes, Putin’s efforts to push through sham referendums in Ukraine and his nuclear threats. The package will further tighten export controls on electronic components that go into weapons used against Kyiv. It is seen as one of the most efficient measures to hit Moscow’s war machine as the country needs more arms to equip the 300,000 soldiers it’s seeking to recruit. But setting an oil-price cap as agreed by G-7 leaders seems more elusive and will need more time. Details could come only next week as some member states including Hungary still need to be convinced. - Jorge Valero

What’s Happening

Gas Cap | With the Commission’s plan to impose a gas-price cap likely delayed, the institution is set to only share a technical document on the feasibility of such a measure this week in spite of the pressure from some member states, we’re told. As the energy crisis drags on, the economic hit risks dwarfing the fallout from the global financial crisis.

Keep Tightening | The ECB will continue increasing borrowing costs “over the next several meetings” even with economic activity expected to “slow substantially,” President Christine Lagarde said. The next rate hike will be at least a half-point as “inflationary trends are intensifying,” according to ECB governing council member Gediminas Simkus.

Italy’s Challenges | Giorgia Meloni, the likely next Italian prime minister, will face a darkening economic outlook, high debt, energy price hikes and market turbulences as the ECB keeps increasing interest rates. She will have to send a draft budget to Brussels by mid-October, while her government will have to deal with urgent corporate portfolios like Monte Paschi, ITA airline and Telecom Italia.

Irish Budget | Companies in Ireland will receive help with their energy bills in an early budget to be announced today, amid a raft of measures aimed at tackling the cost-of-living crisis. In addition to the 6.7 billion-euro plan set out in the summer, the government will announce a cost-of-living package of one-off supports to be paid before the end of 2022. 

Internet Infrastructure | The EU wants streaming sites like YouTube and Netflix to help pay for internet infrastructure. But, even for people who back the idea, the big question is how to make it work. Read more about the debate here.

In Case You Missed It

Market Turmoil | The selloff in UK assets continued yesterday following the new government’s fiscal plan, sending the pound to an all-time low and slamming government bonds. Sterling resumed its slide against the dollar after Bank of England Governor Andrew Bailey tempered speculation of an emergency rate hike.

Tax the Rich | The ECB’s chief economist has advice for governments wishing to support vulnerable groups amid soaring prices without further fueling inflation: tax the rich. States should support the income and consumption of those households and businesses that suffer the most, Philip Lane told Austria’s Der Standard newspaper.

Made in EU | The EU should consider giving subsidies only for electric cars produced in Europe or for those meeting strict green standards, French Finance Minister Bruno Le Maire said. The bloc is looking at options to respond to the US plan to support only American-made e-vehicles, a measure seen as breaching WTO rules.

Climate Homework | With just six weeks to go until COP27 in Egypt, the EU has failed to meet a key deadline to update its plan to cut emissions. While far from alone, it raises concern that the UN climate summit could fall short of what needs to be done to bring global warming in line with Paris Agreement goals. 

Big Guns | Ukraine’s allies are failing to deliver more powerful weapons, which the country needs to keep pushing its counter offensive. Allies have shied away from sending the longest-range missile systems, combat aircraft and NATO-standard tanks. 

Chart of the Day

European companies are facing record costs to refinance their debt. The difference corporates need to pay if they sold bonds now compared to the coupons on their existing debt climbed to 250 basis points, the highest since a Bloomberg index began in 1998. In other words, companies have to pay an additional 2.5 million euros for every 100 million euros that they borrow. 

Today’s Agenda (All times CET.)

• 6:30 p.m. NATO chief Jens Stoltenberg speaks ahead of a meeting with European Parliament members
• Commissioner Johannes Hahn meets with Robert Holzmann, governor of the Austrian National Bank
• European Council President Charles Michel participates in funeral ceremony of former Japanese Prime Minister Shinzo Abe in Tokyo
• Commissioner Kadri Simson attends annual IAEA general conference in Vienna