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EU-Bonds debt exceeds €0.5 trillion as Commission announces more borrowing

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The European Commission has announced its intention to issue up to €65 billion of EU-Bonds in the second half of 2024 (H2). The plan for H2 2024 builds on the strong start in the first half of 2024, when close to €75 billion worth of issuances were completed.

Proceeds from EU-Bonds will finance disbursements under the NextGenerationEU and other policy programmes such as the Ukraine Facility, the Reform and Growth Facility for the Western Balkans and Macro Financial Assistance programmes.

The funding plans for the second half of the year will bring the 2024 total EU issuances to up to €140 billion (+ €20 billion compared to the 2023 funding target). EU-Bonds issuances in 2025 and 2026 are expected to continue to increase to €150– €160 billion per year to finance the wider range of EU policy programmes.

“The EU’s funding plans up to €65 billion in the second half of 2024 are a testament to the key role that EU-Bonds continue to play in financing policy priorities both inside the EU and our Neighbourhood”, said Johannes Hahn, Commissioner for Budget and Administration. “With the amount of outstanding EU-Bonds now exceeding the half a trillion-mark, EU-Bonds are at the same time contributing to the development of the European capital markets by increasing the pool of highly rated and liquid euro denominated assets available to investors across the globe”.

The Commission will continue to finance the green component of the Recovery and Resilience Facility (RRF) through its NextGenerationEU Green Bonds, which currently stands at €60 billion. Issuances will remain firmly anchored to climate-relevant expenditures reported by Member States, in accordance with the NextGenerationEU Green Bond Framework.

The Commission borrows on international capital markets on behalf of the EU and disburses the funds to Member States and third countries under various borrowing programmes. EU borrowing is guaranteed by the EU budget, and contributions to the EU budget are an unconditional legal obligation of all Member States under the EU Treaties.

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Since January 2023, the Commission has been issuing single branded EU-Bonds rather than separately labelled bonds for individual programmes. The proceeds of these single-branded bonds are allocated to programmes following dedicated procedures. NextGenerationEU Green Bond issuances continue to finance only measures eligible under the NextGenerationEU Green Bond Framework.

On the basis of EU-Bonds and NextGenerationEU Green Bonds raised since mid-2021, the Commission has so far disbursed over €240 billion in grants and loans to the EU Member States under the Recovery and Resilience Facility. More than €55 billion has been allocated to other EU programmes benefitting from NextGenerationEU funding. Over €6 billion has been disbursed to Ukraine under the Ukraine Facility in 2024, complementing the €18 billion under the Macro-financial Assistance+ in 2023.

In addition to EU-Bonds issuance, the Commission engages in short-term liquidity management operations to even out upcoming funding needs. The EU’s total debt outstanding now stands at €536 billion, of which around €22 billion in the form of EU-Bills.

To finance EU policies as efficiently and effectively as possible, the Commission’s issuances are structured by semi-annual funding plans and pre-announced issuance windows. To support the secondary market liquidity of EU-Bonds, the Commission introduced a framework incentivising EU Primary Dealers to provide quotes on EU securities on electronic platforms in November 2023. In addition, the Commission will support the use of EU-Bonds in repurchase agreements by introducing a repurchase facility in early autumn 2024.

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