EU to sell at least €80bn of bonds in 2021

The European Commission announced that it estimates it will sell around €80 billion of long-term bonds in 2021, to be topped up by “tens of billions” of short-term EU-Bills, to cover its “remaining financing requirements.”

EU member countries have agreed to allow the Commission to raise as much as €800 billion in debt — roughly €150 billion a year by 2026 — to help pull the economy out of recession and finance investments in green and digital policies.

“The exact amount of both EU-Bonds and EU-Bills will depend on the precise funding needs, and the Commission will revise today’s assessment in the autumn,” said the Commission.

“In this way, the Commission will be able to fund, over the second half of the year, all planned grants and loans to Member States under the Recovery and Resilience Facility, as well as cover the needs of the EU policies that receive NextGenerationEU funding.

“This funding plan is based on an initial estimate of the needs of Member States in terms of loans and grants.

“The Commission will update the funding plan in September, when it has a more precise overview of the funding needs of the EU Member States for the last months of the year.

“The Commission has today also adopted the Annual Borrowing Decision for 2021.

“This decision includes the maximum amounts that the Commission is authorised to borrow by the end of the year.

“The Commission will now finalise preparations for the first NextGenerationEU issuance due later in June.

“The first EU-Bills will be issued in September when the EU auction platform becomes operational.”

Johannes Hahn, Commissioner in charge of Budget and Administration, said: “Today, we are making yet another step forward in the preparations for the first borrowing operation to finance our collective recovery via NextGenerationEU.

“By issuing some €80 billion of long-term bonds and using additional short-term bills this year, we will manage to cover Member States’ most urgent needs and set them on the path towards a sustainable recovery and a green, digital and resilient Europe.”

The Commission added: “To finance NextGenerationEU, the European Commission, on behalf of the EU, will borrow on the capital markets – up to €750 billion in 2018 prices, or up to some €800 billion in current prices.

“This would translate into borrowing volumes of on average roughly €150 billion per year between mid-2021 and 2026, which will make the EU one of the largest issuers in euro.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.