Presented by SQM.

By AMERICA HERNANDEZ

with EMMA ANDERSON

PRESENTED BY

Send tips here | Tweet @america_hdz | Listen to Playbook and view in your browser

GOOD MORNING. America Hernandez here from POLITICO’s Pro Energy team, bringing you today’s Playbook with a healthy dose of oil, gas and power plays as politicians push for a deal to keep heating and electricity bills under control this winter — without drowning in debt.

My crackerjack colleagues Suzanne Lynch, Hans von der Burchard and Clea Caulcutt are on the ground in Prague for Day 2 of European leaders’ jamboree, this time just with EU members for an “informal” summit. Don’t hesitate to get in touch with your best tips and table gossip. Speaking of which …

Paws off Manu: We heard Emmanuel Macron gave a firm non to all offers of a Czech bodyguard during his stay in the Bohemian capital for the first European Political Community meeting (the French president’s own brainchild). Let’s hope that’s not a sign his former security aide Alexandre Benalla is back lurking in the shadows, ready to pounce on any protester throwing rotten eggs and vegetables — or serving up a slap with a medieval battle cry.

**A message from SQM: SQM is committed to high social and environmental performance and is the second lithium mining company that started an independent third-party audit against the Initiative for Responsible Mining Assurance (IRMA) Standard. Read more here.**

DRIVING THE DAY: GAS CAP TANGO IN PRAGUE       

HERE COMES THE ENERGY HANGOVER: Last night’s dinner under the moonlight at Prague Castle may have given gathering politicians a fuzzy feel-good vibe (more on that below) — now comes the hard work. There are still deep divisions among the 27 EU leaders set to talk energy security today — with each facing pressure back home to keep energy bills manageable and prevent the double-whammy of social unrest and deindustrialization that could unfurl should gas shortages and blackouts hit the bloc this winter.

Coal may have united Europe, but this winter the wrong policy on gas could shatter it, my colleague Charlie Cooper writes here.

Gas price cap psychobabble: A first step is speaking the same language. Over the past month, politicians from Lisbon to Warsaw have been throwing around the phrase “gas price cap” to mean all manner of contradicting measures. That’s separate and apart from Berlin’s “price brake,” Spain and Portugal’s “Iberian exception,” and Italy’s more colorful tetto forchetta (that’s “forked cap”) of minimum and maximum gas import prices.

The gas gobbledygook has gotten so bad that EU diplomats actually begged for no written statement to be published at the end of today’s meeting — for fear of haggling over the gas cap terms to no end in advance of the summit.

But they all want the same thing: Cheaper gas with as little collateral damage as possible to relations with suppliers. That mostly comes down to a choice of subsidizing imports (and taking on major debt) versus playing hardball to impose a lower price — and risking scaring away scarce global supply. Read more from me on decoding the various gas cap options here.

Brussels is open to it … In her letter to leaders, European Commission President Ursula von der Leyen said she was ready to discuss a temporary price ceiling on gas used in electricity — if it was coupled with “more demanding gas savings obligations.”

The proposal du jour: A joint pitch from Italy, Belgium, Greece and Poland suggesting a fluctuating range of acceptable prices for all EU wholesale gas transactions — partly linked to the price of oil, as well as gas hub prices in the U.S. and Asia — coupled with some subsidized emergency full-price purchases to import more gas in case shortages look likely.

Expect some haggling: And if countries are looking for a place to start, the EU’s agreement last week on windfall taxes to be collected from fossil fuel firms and power generators has already birthed a list of winners and losers needing to be cajoled or consoled into a fairer deal on gas.

According to data crunched by my colleague Victor Jack, big winners from the electricity transaction tax will include France, Bulgaria, the Czech Republic — and any other country that produces most of its power from sources other than gas.

Conversely, Slovakia, Poland, Sweden, Spain, Portugal, Latvia, Italy and Croatia will be able to collect much less moolah from the cash clawback measures. EU members are meant to strike bilateral agreements to share the wealth more evenly — and today could be a ripe time to win over neighbors to the desired gas cap arrangement by, uh, sweetening the pot.

And now, a dose of schadenfreude: Germany’s go-it-alone announcement to subsidize its own gas buys to the tune of €200 billion in fresh debt will bring down its electricity price — and in doing so reduce the amount of money it can skim off energy companies to pay off that new credit. Read the full story from Victor here.

EPC DINE AND DISH: HEARD AT THE LEADERS’ TABLE       

EPC DINNER PROMPTS GOOD FEELINGS: The more than 40 heads of state and government breaking bread at Thursday’s inaugural European Political Community dinner left giddy and light-headed after a marathon day of smiles, glad-handing and smoothing over past disagreements.

Making up: British Prime Minister Liz Truss admitted Macron was a “friend” rather than a “foe,” and cozied up to Czech Prime Minister Petr Fiala — we hear she earned back a spot for the U.K. in the North Seas Energy Cooperation group on renewable energy, to be put forth by the Czech Council of the EU presidency for approval to fellow EU members in the coming weeks.

… sort of: Armenian Prime Minister Nikol Pashinyan and his arch-nemesis, Azerbaijani President Ilham Aliyev, exchanged steely stares at a first meeting — but agreed to a second sit-down. The last thing the EU needs is another Nagorno-Kabarakh flare-up threatening pipeline deliveries of oil and gas westward …

Even Turkish President Recep Tayyip Erdoğan got warm nods on his way in. That is, until he used his speech in the final plenary session to upbraid Athens — which naturally didn’t sit well with Greek Prime Minister Kyriakos Mitsotakis. Both leaders later railed against the other at press conferences, revealing the chasm that remains between the two NATO allies.

Try again in Chișinău: The next EPC summits will take place in Moldova, Spain and the U.K. Read all the details about the first day (and night) from Suzanne and Clea here.

Now listen to this: Suzanne, Clea and Hans also bring you highlights and analysis from the EPC meeting on the latest episode of EU Confidential. Listen here.

TALKIN’ WORLD WAR III BLUES       

UK TROOPS GET GREEN LIGHT FOR EU MOBILIZATION: The U.K. military has received approval to move troops more quickly across the Continent, should the need arise. On Thursday, 24 EU member states voted unanimously to allow the U.K. to join the so-called Permanent Structured Cooperation (PESCO) military mobility project.

Miss me yet? PESCO, a Dutch-led initiative, already allows NATO allies Canada, Norway and the U.S. to take part in any rapid troop rollout. Feeling a little left out in the post-Brexit wilderness, the U.K. sought a similar status. A British defense ministry spokesman was elated with the news. “We look forward to continuing to work with our EU partners and NATO allies to coordinate our joint work to support European security,” he said.

Marching on Moscow? “Cooperation with our ally and partner the U.K. will further enhance military mobility in Europe. This is all the more crucial in light of the war in Ukraine,” said Kajsa Ollongren, the Dutch defense minister.

Hold your fire … But while PESCO is designed for Europe to act more nimbly in wartime, it is still an EU initiative, and these things take time. A spokeswoman for the EU’s External Action Service said Thursday’s vote is merely one stage before U.K. troops can march on European soil: “The process now continues, on the basis of a notification of the project coordinator, at Council level with an opinion by the Political and Security Committee. After that, the request will be forwarded to the Council for a decision.”

KYIV MUST SUE FOR PEACE, MACRON WARNS: On the sidelines of the Prague summit Thursday, Macron told Czech daily Hospodářské noviny that “it’s clear, due to the size and geography of Russia, that this war cannot have a purely military outcome” but “must end at the negotiating table.”

“Do I think that such a time is now? No. Now we are in the middle of the war,” Macron continued. “No one can dictate to the Ukrainians under which conditions and when should the discussions about peace start.”

Don’t EU just stand by and watch: Citing a possible return of Donald Trump to the White House, the French president said the EU’s military apparatus should be beefed up on grounds that “the security of Europe can’t depend on a decision of American voters.” He added that the EU shouldn’t stand by and allow Moscow to “change borders at will,” at the risk of “repeating the worst horrors of the 20th century.”

WARSAW POWWOW: Many transatlantic security heavyweights gathered in Poland this week for the annual Warsaw Security Forum, where Russia’s invasion of Ukraine dominated the agenda. POLITICO’s Matt Karnitschnig caught up with U.S. Senator Chris Murphy, a Democrat from Connecticut and an outspoken member of the Senate’s Committee on Foreign Relations. Here are a few highlights: 

German arms deliveries to Ukraine: “I think there was a lot of early hope that the Germans would be more forward-leaning on weapons transfers than they have been,” Murphy said. While the Germans have been “great partners” in areas such as economic solidarity, Murphy made it clear that Washington expects more on the weapons front: “If you believe that this moment represents an existential threat as I believe Germany does, there is certainly more that they can be doing and perhaps more creative means that they could be engaged in to try to find systems that Ukrainians need.” 

Why Europe should worry about Trump: “We have a dominant political figure in the United States who is hostile to Europe,” Murphy said. “I mean, there’s no way to sugarcoat that. The Republican Party isn’t hostile to Europe. The Republican Party isn’t hostile to NATO, but their likely candidate for president in 2024 is … I really do worry that Trump will take a hostile position on Ukraine aid and that will make our ability to continue passing these packages much harder even before the 2024 election.” 

Why the Iran nuclear deal (aka JCPOA) isn’t dead: “I continue to believe the world is safer with the JCPOA, period,” Murphy said. “It’s incredibly exciting what’s happening in Iran today and I think the United States has to have a policy to support this protest movement. At the same time, we cannot let the Iranian regime get a nuclear weapon or remain as close as they are to a nuclear weapon. That’s just disastrous for the United States and the world. So the JCPOA, to me, is still vital.” 

So when will we see a deal? “There’s still a very good possibility that before the end of the year, the administration and the Iranian regime can get a new deal,” he said. 

ARMAGEDDON AGAIN: Meanwhile, U.S. President Joe Biden said his country has not “faced the prospect of Armageddon” since John F. Kennedy was mired in the Cuban Missile Crisis 60 years ago, warning about the escalating threat of nuclear attacks by Russia. “He’s not joking when he talks about potential use of tactical nuclear weapons or biological or chemical weapons, because his military is, you might say, significantly underperforming,” Biden said of Vladimir Putin. More here.

**POLITICO Live’s Health Care Summit is taking place in just a month! On October 27-28, we’ll be convening leading voices in European health care policy to assess the status of health systems across Europe and the world – as well as other key topics such as digital health, AMR, obesity and more. Register today.**

LE PERSONNEL       

COUNCIL SEC-GEN RACE SENDS TONGUES A-WAGGING: My colleague Jacopo Barigazzi’s phone has been blowing up with diplomats’ reactions ever since the publication this week of his story on Thérèse Blanchet, the new frontrunner candidate for the role of secretary-general for the Council of the EU.

A decision could come as soon as today: Council President Charles Michel is expected to present Blanchet’s name to EU leaders in Prague — and politicians will be able to size her up themselves, as she’s also in town due to her current role as head of the Council legal service. A decision could come during the meeting, though some diplomats were skeptical since many capitals have yet to give their backing. Paris, for example, is still supporting its preferred candidate, French Ambassador to the EU Philippe Léglise-Costa.

No one disputes that Blanchet is a qualified and highly valued personality … but “why would one propose a candidate from within the Council Secretariat and not someone from a member state with the relevant political and management experience?” asked one EU diplomat, voicing a view shared by others. Usually, former EU ambassadors or so-called sherpas are tapped for the job.

All the better to steer you with, my dear: The move “certainly won’t silence suspicions that President Michel is looking for a weak secretary general in order to try and exercise more power himself,” the diplomat added. 

NEW ENVE CHAIR AT CoR: The mayor of Warsaw, Rafał Trzaskowski, was elected Thursday as the new chair of the environment, climate change and energy commission (ENVE) at the European Committee of the Regions. For the next two and a half years, he’ll lead efforts to tackle energy poverty, boost energy efficiency and accelerate renewables deployment in cities and regions. Congrats!

IN OTHER NEWS       

REVIVING TRANSATLANTIC DATA FLOWS: U.S. President Biden is expected to sign a long-awaited executive order on transatlantic data flows later today when it’s morning in Washington, paving the way for a new framework that will let companies shuttle everything from family photos to payroll information from the U.S. to the EU. Not to be outdone, the U.K.’s new digital secretary, Michelle Donelan, is meeting Biden’s Commerce Secretary Gina Raimondo in London also today to likely announce a transatlantic data pact of her own. London has been working on its data deal in parallel to Brussels.

ORBAN’S DOUBLE GAME: Viktor Orbán has two faces: In Brussels, he has backed sanctions packages and has been negotiating reforms. Meanwhile, back home in Budapest, he courts Moscow and actively demonizes the EU. But fellow neighbors in the bloc say his double game can’t work forever. Read more from Lili Bayer on how the Hungarian leader’s realpolitik is wearing thin.

MACRON STANDS BY HIS FRIENDS DESPITE LEGAL WOES: Macron swept to power in 2017 after running as an independent centrist who promised to be an ambitious reformer, including on ethics, following corruption scandals that had tarnished previous administrations. But events this week show he has given up on some of those promises: Two of Macron’s top allies in government are now facing judicial investigations, but the French president has made clear he won’t budge on his support for them. Read more from Marion Solletty on how Macron is sticking with his allies despite their legal troubles.

**On October 12 at 4:30 p.m. CEST, POLITICO Green 28 unveiling event will take place. This online event will also feature a one-to-one interview with the European Parliament’s chair of the ENVI Committee MEP Pascal Canfin and a joint interview with T&E Executive Director William Todts and ACEA Director–General Sigrid de Vries. Register here.**

AGENDA       

— Informal meeting of EU heads of state or government in Prague. Arrivals begin at 9 a.m.

— European Commission Vice-President Margaritis Schinas is in Belgrade to meet Serbia’s President Aleksandar Vučić and Prime Minister Ana Brnabić. Schinas will also meet Albania’s Prime Minister Edi Rama, Minister of Interior Bledar Cuci and Minister for Europe Olta Xhaçka in Tirana.

— Commissioner Nicolas Schmit is in Helsinki to meet Finland’s Employment Minister Tuula Haatainen and others.

— Commissioner Thierry Breton visits the Michelin Technology Centre in France.

— Commissioner Ylva Johansson is in Amsterdam to participate in a ministerial meeting of the Coalition of European countries in the fight against serious and organized crime.

— Commissioner Jutta Urpilainen is in Bruges to give a speech at the College of Europe.

BRUSSELS CORNER       

EUROCRATS FIGHT FOR RIGHT TO UNPLUG AFTER WORK: The Belgians and the French are pushing the European Commission to ensure better working conditions for civil servants across the EU. One of their proposals is the right to be offline after working hours. Belgian Deputy Prime Minister Petra De Sutter, a former MEP, and French Minister Stanislas Guerini on Thursday signed a deal with unions from 18 different European countries on their proposal dubbed “A new way of working.” The next step is to convince European Commissioner for Social Rights Nicolas Schmit to introduce European legislation so that these rules may apply to all civil servants across the bloc, De Sutter said.

BIRTHDAYS: MEP Iratxe García Pérez; Former MEPs Phil Bennion and Jean Arthuis; ECIPE’s Hosuk Lee-Makiyama; POLITICO alum Anca Gurzu; Welcome to the Jungle’s Matthieu Amaré; APCO’s Theo Moore; Russian President Vladimir Putin turns 70.

Celebrating Saturday: European Commission President Ursula von der Leyen turns 64; MEPs Stéphane Bijoux, Ivo Hristov and Bas Eickhout; Former MEP Czesław Siekierski; London Mayor Sadiq Khan turns 52; BK Partners’ Frédéric Vincent; Euros/Agency’s Mathieu Collet; Zoran Zaev, former prime minister of North Macedonia.

Celebrating Sunday: MEP Sven Simon; Former MEPs Nessa Childers, Mike Hookem and Emma McClarkin; POLITICO’s Ashleigh Furlong; MLex’s James Panichi; Former U.K. Prime Minister David Cameron.

THANKS to Barbara Moens, Leonie Kijewski, Ilya Gridneff, Jacopo Barigazzi, Karl Mathiesen, Victor Jack, Karl Mathiesen, Matthew Karnitschnig, Vincent Manancourt and producer Grace Stranger.

**A message from SQM: SQM, one of the world’s largest lithium producers is supporting the UNFCCC’s ‘Race to Zero’ campaign by developing sustainable lithium to fuel the electric vehicles needed for the transition to Net Zero. As part of Race to Zero, SQM is committing to the goal of reducing emissions across all its activities in line with the Paris Agreement, with transparent action plans and robust short- and long-term targets, which they will report on annually. The company has already begun exploring its options for making its logistics routes low carbon, by introducing Chile’s first high-tonnage electric truck to be used in large-scale mining, which could eliminate approximately 3.840 tons of CO2 per year. SQM is also committed to high social and environmental performance and is the second lithium mining globally company that started an independent third-party audit against the Initiative for Responsible Mining Assurance (IRMA) Standard. Here.**

SUBSCRIBE to the POLITICO newsletter family: Brussels Playbook | London Playbook | Playbook Paris | POLITICO Confidential | Sunday Crunch | EU Influence | London Influence | Digital Bridge | China Direct | Berlin Bulletin | D.C. Playbook | D.C. Influence | Global Insider | All our POLITICO Pro policy morning newsletters