NextGenerationEU, 80 billion euros bond issue


Following the approval of the new regulation concerning all EU Member States’ resources, the Commission can now start to raise funds to finance Europe’s recovery through NextGenerationEU. To this end, the European Commission today announced that in 2021 it plans to issue long-term bonds worth approximately 80 billion euros, which will be supplemented by tens of billions of euros in short-term EU vouchers to cover the remaining financing needs. The precise amount of EU bonds and EU interest-bearing bonds will depend on the specific financing needs, and the Commission will review its assessment this autumn. The Commission will thus be able to finance, in the second half of the year, all the grants and loans provided for Member States under the Recovery and Resilience Facility, as well as meeting the needs of EU policies benefiting from NextGenerationEU funding.

The financing plan shall be based on an initial estimate of the needs of Member States in terms of loans and grants. In September, when it will have a more precise overview of the financing needs of EU Member States for the last months of the year, the Commission will update the financing plan.

The Commission has also adopted today the annual borrowing decision for 2021, which sets out the maximum amounts of loans that it is authorised to borrow by the end of the year.

The Commission can now complete preparations for the first issue under NextGenerationEU, scheduled for June. The first EU vouchers will be issued in September, when the EU auction platform becomes operational.

In order to finance NextGenerationEU, the European Commission will borrow, on behalf of the EU, up to 750 billion euros on the capital markets at 2018 prices, or around 800 billion euros at current prices. In concrete terms, the loans will amount, on average, to approximately 150 billion euros per year between mid-2021 and 2026, a volume that will make the EU one of the largest issuers in euro.

The first bond issue will take place through syndication and will be organised with the institutions included in the Commission’s network of main players, as announced on 31 May. Further syndicated transactions are expected by the end of July.

The Commission also intends to start issuing EU bonds and EU interest-bearing bonds through tender procedures from September 2021. Once the auction system is in place, the Commission will regularly organise syndications and auctions for bonds, as well as periodic auctions for EU bonds. Further details on the dates of the auctions and the structure of the EU voucher programme will be published before the start of auctions during the year.

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