The European Union’s borrowing costs rose on Thursday as global index compiler MSCI decided to leave EU debt securuties out of its government bond indexes.

MSCI said that following an investor consultation it decided not to include the EU’s debt in its government debt indexes.

The move is a blow to the EU’s ambition to be treated like a state by investors. MSCI said it will revisit its decision next year.

MSCI said it won’t add the EU debt to its range of government bond indexes because market participants are divided on the topic.

The EU is currently treated as a supranational issuer by index compilers — and the EU cites this as a reason why its borrowing costs are higher than those of individual governments with similar ratings.

Citigroup Inc wrote in a note to clients that MSCI’s decision “was not in line with our or the market’s expectations … the rejection could dissuade other index providers from even launching such consultations in the near-term.”

Gareth Hill, portfolio manager at Royal London Asset Management, said the decision was “something of a surprise to the market.”

The EU expects to raise up to €712 billion in common debt by 2026 to finance its COVID recovery fund and has become one of the biggest borrowers in bond markets.

New York Stock Exchange parent Intercontinental Exchange has launched a consultation on classifying EU debt securities.