Today, the European Commission announced it will issue around €80 billion of long-term bonds in 2021 to finance Europe's recovery through NextGenerationEU. This amount is to be topped up by billions of short-term EU-Bills to cover the remaining financing requirements. In this way, the Commission will be able to fund 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 also adopted the Annual Borrowing Decision for 2021 today. 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.

To finance NextGenerationEU, the European Commission, on behalf of the EU, will borrow on the capital markets up to €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.

The first bond issuance will take place via a syndication and be organised with the institutions included in the Commission's Primary Dealer Network as announced on 31 May. Further syndicated transactions are foreseen to take place before the end of July.

The Commission also intends to start issuing EU-Bonds and EU-Bills through auction procedures as of September 2021. Once the auction system is in place, the Commission will regularly organise syndications and auctions for the bonds. It will also organise regular auctions for EU-Bills.

Image © European Commission, 2021