EU diplomats will meet again today to discuss the details on how to proceed with Russian sanctions, after failing to reach an agreement on the Russian coal ban yesterday here.
Germany continues to prove to be a stumbling block with sources saying that a key issue was raised by the Germans on whether the ban would affect existing coal contracts or just future contracts. I mean, that is quite a valid topic to bring up but of course the fact that Germany being the largest importer of Russian coal in the region doesn't help with the optics.
In any case, this appears to be more of a technical issue and one that lawmakers are likely able to sort out in enough time.
As the EU starts to venture into banning Russian coal, the path forward is rather evident at the moment. The previously "sacred" space of the EU not touching Russian energy is starting to be challenged. Although Italian prime minister Draghi suggests that oil and gas may not ever be touched on, it's a tail risk worth considering as the EU starts to poke and prod on this matter.
Germany will once again be the major impediment to any ban on Russian oil and gas but while other member states may not feel the pinch as much, such a push will be quite drastic and will weigh heavily on the European economic outlook.
In turn, that will continue to put the ECB in a rather unenvious position as price pressures will stay elevated while the economy faces a pronounced slowdown.
