Green shoots – Image nattanan on Pixabay
(BRUSSELS) – The European Commission is set to issue EUR 40 bn in long-term EU-Bonds for the rest of 2023, to finance the EU recovery, provide support to Ukraine and secure funds for key programmes.
The funds raised will be used to meet payments related to the NextGenerationEU funding programme; support to Ukraine under the EU’s Macro-Financial Assistance + programme; and any additional payment needs that may arise from other existing EU programmes, such as the European Financial Stabilisation Mechanism (EFSM) and Macro-Financial Assistance (MFA).
Combined with the successful execution of the funding target in the first half of the year (80 billion), the funding over the second half of 2023 will take EU issuances in 2023 to an amount of 120 billion matching amounts in 2022. The Commission’s funding target for the remainder of the year reflects the expected disbursements needs of various beneficiaries, notably EU Member States under the Recovery and Resilience Facility (RRF). Currently EU Member States are finalising the reshaping of their Recovery and Resilience plans (RRP) to reflect the new grant allocations, request additional loans or adjust to new priorities, including REPowerEU. Disbursements under the Recovery and Resilience Facility are hence expected to rebound in 2024.
Commission issuances will also continue to include NextGenerationEU Green Bonds to finance the green component of the RRF. In doing so, the Commission will remain diligent in verifying that the proceeds from the NextGenerationEU Green Bond issuance match with eligible green bond expenditures in accordance with the NextGenerationEU green bond framework.
To further boost the secondary market liquidity of EU-Bonds, the Commission is preparing a framework for providing investors with pricing quotes on electronic platforms for EU securities to come into effect before end of 2023. The Commission is also starting to build a facility to support the use of EU-Bonds as an instrument in repurchase agreements, a development the Commission expects to implement by early 2024.
