EU leaders meet today for virtual Euro Summit

European Union leaders will attend a virtual Euro Summit today. The meeting will focus on relieve EU dependence on Russian

EU leaders meet today for virtual Euro Summit. Photo: Yves Herman

European Union leaders will attend a virtual Euro Summit today.

The meeting will focus on relieve EU dependence on Russian energy imports.

Earlier this month, the European Central Bank (ECB) accelerated the winddown of its stimulus program in response to rising energy and commodity prices caused by the Russia-Ukraine War. EU leaders have agreed to cut Russian natural gas imports by 66% by the end of 2022. In response, Russia announced that it would force EU states to pay for Russian gas and oil in rubles. This measure intends to drive up the ruble’s price, helping Russia blunt international sanctions and stimulate its economy.

Expect EU leaders to use the summit to justify energy import diversification and increases in renewable energy investment as the Russia-Ukraine War accelerates the bloc’s shift toward greater energy independence. Still, such a dramatic cut could spell continued inflationary pressure, potentially driving the ECB to hike interest rates in the last quarter of this year or the first of next. The EU is likely to increase energy and commodity imports from the US, Qatar and Nigeria in the coming decade as it seeks to wean itself off Russian commodities.

Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.