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

Ever since the European Commission put forward its plan to ban Russian gas imports by the end of 2027, officials and companies from the EU’s 27 member states have been scratching their heads over what tool they would use to make that a reality. Straight sanctions were taken off the table due to their unanimity requirement, with both Hungary and Slovakia staunchly opposed. Instead, we've learned that the bloc is likely to prohibit supplies via a quota set to zero, effectively a trade measure that only requires a qualified majority. It would allow European buyers to invoke so-called force majeure to terminate agreements with Russian suppliers, we’re told. As soon as it's put forward mid-next month, lawyers will be delving into the fine print to work out if it would allow European companies to walk away from their contracts with Moscow without paying penalties.

— John Ainger

What’s Happening

More Sanctions | The EU approved its 17th sanctions package against Russia, targeting nearly 200 shadow fleet ships as well as addressing hybrid threats and human rights. Measures included targeting three vessels that helped move gas cargoes from Russia’s Yamal LNG project. The bloc is already at work on its next package of penalties that will aim to further raise pressure on Moscow to end its war against Ukraine.

Syria Reprieve | While the EU is placing more sanctions on Russia, it removed all remaining measures on Syria. The bloc’s assessment indicated that the loosening of sanctions has had limited impact and further relief was driven by good faith attempts by the Syrian authorities to establish an accountability mechanism, we’ve learned. 

Avoiding Confrontation | Group of Seven finance ministers gathered in Alberta, Canada this week hoping to make their case against US trade policy, while also alleviating tensions and finding common ground, especially on China, we’re told. The aim is to avoid another G-7 confrontation with President Donald Trump when Canada hosts the next summit. 

Defense Play | Germany has offered to take the lead on joint EU projects regarding air defense, land and marine systems, Defense Minister Boris Pistorius said. He said the best way to share the burden on key projects was for member states to lean into their strengths when it comes to their contributions.

Around Europe

Israel Pressure | The EU should use its economic ties to pressure Israel to halt its expanding attacks in Gaza, Spanish Foreign Minister Jose Manuel Albares told us. Diplomatic steps and possibly even sanctions should be leveraged to persuade Prime Minister Benjamin Netanyahu and avert a bigger humanitarian crisis, Albares said.

Vatican Diplomacy | Pope Leo XIV’s proposed role hosting Ukraine-Russia peace talks in the Vatican marks a significant development for the first US-born pontiff. But less than two weeks into his papacy,  it risks dragging him into an intractable conflict that has no clear end in sight. 

Calming Markets | Romania will weigh further interest-rate cuts only after a return to market and political stability, the central bank chief said, as the election of a centrist candidate to the presidency on Sunday spurred preparations to form a new government. 

Peace Dividend | Turkey said it expects to reap “huge” economic gains from the Kurdish separatist group’s decision to stop its 40-year war in the country’s southeast. Fighting with the militant group Kurdistan Workers’ Party, or the PKK, since 1984 cost around $1.8 trillion, according to the government.

Hydrogen Concern | Europe’s green hydrogen targets to decarbonize the economy are already being questioned over high costs and a lack of industrial demand. Now, a new study is underway to work out how much the gas could actually be contributing to the problem it’s trying to fix. 

Chart of the Day

Russia's oil exports are becoming increasingly difficult to track as the tankers moving the barrels disappear from digital tracking systems. Moscow’s exports slipped slightly in the past four weeks, according to monitoring of those flows by Bloomberg. But keeping track is becoming harder because more and more ships are giving false locations — or no locations at all — to the industry’s Automated Information System, or AIS for short. Here’s some of the tactics they use.

Today’s Agenda

All times CET

• 9 a.m. EU-African Union Ministerial Meeting
• 10:10 a.m. European Commission President Ursula von der Leyen receives the President of Italy Sergio Mattarella
• 5:30 p.m. Press conference between NATO Secretary General Mark Rutte and Dutch Prime Minister Dick Schoof
• 6:30 p.m. Von der Leyen meets with Dutch Premier Schoof
• European Commission to adopt single market strategy and simplification of rules for small mid-caps
• European Parliament starts two-day plenary session, discusses Russian energy phase-out plan
• EU Defense Commissioner Andrius Kubilius speaks at the United for Ukraine event