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© Reuters. The EU will issue up to 80,000 million in debt in the first half of 2023
Brussels, Dec 19 (.).- The European Commission plans to raise up to 80,000 million euros with debt auctions in the financial markets in the first half of 2023 to finance the recovery fund of the European Union (EU) and macro-financial aid to Ukraine for the war.
Specifically, 70,000 million euros will be used to finance the recovery plans of the Twenty-seven, while 10,000 million will go to kyiv to cover the most urgent needs, such as the operation of the public administration or the repair of infrastructures, as reported in a communicated the community Executive this Monday.
The Commission will carry out auctions and syndicated bond operations with the support of the community budget, as it has been doing since mid-2021 to finance the recovery fund, after the States have given their approval to follow this strategy also to raise the 18,000 million euros of the new aid package for Ukraine in 2023.
The EU executive will use a new “unified approach” for future issues whereby it will only issue “EU bonds” instead of using separately named bonds for each debt-financed EU program, such as the SURE fund, the NextGeneration recovery or macrofinancial assistance.
“The unified financing approach will allow the instruments developed for the NextGeneration to be used in the same way for other loan programs. All these programs can be financed in a flexible way, using the proceeds of a single scheme of transactions with letters and bonds of the EU,” the Commission said.
Since the emissions for the fund began Next (LON:) Generation, the Commission has raised 170,000 million euros of the approximately 800,000 million that will be needed until 2026, to which is added close to 100,000 million euros raised in transactions with social bonds for the SURE fund against the unemployment created due to the pandemic and that it has already reached almost its maximum capacity.
The agreement on the recovery fund provided, however, that approximately a third of it (some 250,000 million euros) would be raised with green bond issues, so Brussels will continue to carry out these issues separately so that investors can verify that their revenues are effectively used for ecological purposes.
The Commission believes that this new unified approach will allow it to plan, execute and communicate its emissions in a more agile and coherent way, obtain the “most advantageous possible” terms that will then be passed on to the beneficiaries of the aid; and will make the securities easier for investors to manage thus improving their liquidity and pricing.
“In the last two years we have witnessed the EU transform from a supranational issuer to a super sovereign issuer. The new unified financing program for the issuance of EU bonds is an important step forward in the development of the EU as a issuer,” said European Budget Commissioner Johannes Hahn.
(More information about the European Union at euroefe.euractiv.es)
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