Communication on a new funding strategy to finance NextGenerationEU

Author (Corporate)
Series Details COM (2021) 250
Publication Date 14/04/2021
Content Type

Summary:

Communication published by the European Commission on 14 April 2021, setting out a funding strategy aimed at ensuring the availability of funds required to fulfil the objectives of the EU Recovery Instrument.

Further information:

The European Union Recovery Instrument - also known as the Next Generation EU (NGEU) - is a temporary instrument aimed at supporting economic recovery following the COVID-19 (coronavirus) pandemic. It can raise up to €750 billion (2018 prices) through bond issuance. In this context, the European Commission is to borrow on the capital markets on advantageous conditions due to the EU's high credit rating. The benefit is then passed on to the EU Member States directly when providing them loans or to the EU Budget in the form of low interest rate payments on borrowings to finance recovery spending. The borrowing is to be concentrated between 2021 and 2026.

While the Commission has borrowed on previous occasions, the volumes, frequency and complexity of the NGEU borrowing called for a fundamental change in the approach to capital markets. This Communication therefore calls for an overhaul of how the Commission raises funds through bond issuance. It is adopted in accordance with Council Decision 2020/2053. Alongside this Communication, the Commission also adopted a Decision on the governance arrangement and risk management systems for NGEU and a Commission Decision on the Primary Dealer Network.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:250:FIN
Related Link(s)
Official
European Commission: The EU as a borrower – investor relations https://ec.europa.eu/info/strategy/eu-budget/eu-borrower-investor-relations_en
European Commission: Press Release, 14/04/2021: NextGenerationEU: Commission gets ready to raise up to €800 billion to fund the recovery https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1703
European Commission: Funding strategy for NextGenerationEU: Questions and Answers (14 April 2021) https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_1702
European Commission: Presentation by Commissioner Hahn of the NextGenerationEU – Funding strategy to finance the Recovery Plan for Europe (14 April 2021) https://ec.europa.eu/commission/presscorner/detail/en/speech_21_1743

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