The European Commission is set to borrow about €80 billion ($97.76 billion) this year in long-term bonds to finance the European Union’s plan for economic revival after the pandemic, the EU executive said on Tuesday (1 June).
The European Commission is set to borrow about €80
billion ($97.76 billion) this year in long-term bonds to finance the
European Union’s plan for economic revival after the pandemic, the EU
executive said on Tuesday (1 June).
The Commission said the borrowing, to begin later in June, would be
topped up with tens of billions of euros of short-term EU-Bills to cover
the remaining financing requirements, adding it would update its
funding plan in September.
“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,” the Commission said in a statement.
The European Union plans to kick off its €750 billion pandemic
recovery package with an initial €10 billion bond issue, France’s junior
minister for European affairs, Clément Beaune, said on Monday (31 May).
The money is the first part of the EU’s landmark scheme of €800
billion, in current prices, that is be distributed to all 27 governments
of the bloc in grants and loans.
To get its share of the cash, each government has to submit to the
Commission a plan of reforms and investment that will focus on making
the economy greener and more digital and boosting its resilience to
future health crises.
So far 22 governments have sent in their plans and after the time
needed for evaluation by the Commission and other EU governments, EU
officials expect the first money to start flowing to capitals in late
July.
The Commission said it would borrow on average roughly €150 billion
per year between mid-2021 and 2026, which would make the EU one of the
largest issuers in euro.
It said the first bond issuance would take place through a
syndication with the institutions included in the Commission’s Primary
Dealer Network of 39 banks. Further syndicated issues would take place
before the end of July, it said.
The Commission also intends to start issuing EU-Bonds and EU-Bills
through auction procedures as of September 2021. Details of the auctions
would be published later this year.EURACTIV:
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