Wednesday, February 8, 2023

The EU raises 5,000 million euros in its first debt issuance of the year

The European Commission has raised 5,000 million euros this Tuesday in its first debt issuance for 2023 to finance the recovery plan for Covid-19 and the macro-financial assistance program for Ukraine through an auction of a 30-year bond, which will mature on March 4, 2053.

The operation has been the first syndication carried out within the framework of the unified financing approach of the European Union (EU) and that Brussels has introduced as the main financing method from January 2023. The Commission, on behalf of the EU, issues single-branded “EU bonds” instead of separately labeled bonds for individual programs.

With the operation on Tuesday, Brussels has already raised almost 10,000 million euros of its financing objective of 80,000 million for the first half of 2023, a figure that includes the 4,680 million euros obtained at the beginning of January through a bond auction of the EU.

Of the target of 80,000 million, about 70,000 million will go to the recovery and resilience fund and about 10,000 million, to macro-financial assistance for Ukraine.

To further boost bond liquidity, the Commission is preparing a framework to provide investors with price quotes for EU securities, and is starting to create a buy-back mechanism to support market participants in trading. of its bonds, which will be launched in early 2024.

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