EU to sell €80bn of long-term bonds in H1 of 2003

The European Commission announced it intends to sell up to €80 billion of long-term EU-Bonds in the first half of 2023 under its unified funding approach.

“Under this approach, the Commission – on behalf of the EU – will henceforth issue only ‘EU-Bonds’ rather than separately denominated bonds for individual programmes such as SURE and Macro-Financial Assistance (MFA),” said the Commission.

“The programmes to be financed through the unified funding approach in the first half of next year are the NextGenerationEU recovery programme and the new Macro-Financial Assistance + programme for Ukraine.

“The former will account for some €70 billion, and the latter for around €10 billion.

“The unified funding approach will allow the instruments developed for NextGenerationEU to be used in the same way for other lending programmes.

“All of these programmes can be funded in a flexible manner, relying on the proceeds of a single scheme of EU-Bills and EU-Bonds transactions.

“The Commission said it will continue to finance the green component of the Recovery and Resilience Facility at the heart of NextGenerationEU through clearly and separately designated NextGenerationEU green bond issuances.

“In this way, investors will remain able to verify that proceeds from the NextGenerationEU green bonds are matched to eligible green bond expenditures in accordance with the NextGenerationEU green bond framework.”

The European Commission currently runs two major programmes financed through capital markets funding – the NextGenerationEU recovery instrument of around €800 billion between mid-2021 and end-2026 and the Macro-Financial Assistance + programme, to provide up to €18 billion of support to Ukraine in 2023.

Since the launch of NextGenerationEU in June 2021, the Commission has so far raised around €170 billion in long-term EU-Bonds.

Of this amount, nearly €140 billion has been disbursed to 22 EU countries under the Recovery and Resilience Facility. Further support has been provided to other EU programmes benefitting from NextGenerationEU funding.

The Macro-Financial Assistance + programme follows the disbursement of €7.2 billion by the Commission in emergency MFA loans to Ukraine in 2022. Prior to that, the EU had provided over €5 billion to Ukraine through five MFA programmes since 2014.