EU: € 50 billion long-term bonds to be issued to the Recovery Fund in the first half of 2022

The issuance of EU long-term bonds, amounting to 50 billion euros to finance the Recovery Fund (NextGenerationEU) in the first half of 2022, the European Commission announced today.

In particular, the plan envisages the issuance of EU € 50 billion long-term bonds between January and June 2022, which will be complemented by short-term EU bonds. On this basis, the Commission will continue to be able to cover all payments. under the recovery and resilience mechanism and all other programs under the NextGenerationEU recovery instrument during that period.

The Commission emphasizes that the current financing plan is based on the latest forecasts for future payment needs under NextGenerationEU. Given that the Recovery and Resilience Mechanism (RRF) – which accounts for 90% of payments under NextGenerationEU – is a performance-based instrument and that payments in 2022 will depend on meeting benchmarks and achieving the goals set provide for the Member States’ national recovery and resilience plans, the exact financing needs and timing of payments may vary. Any changes will be notified to the market in a timely and transparent manner.

Budget Commissioner Johannes Hahn said that in 2022 the Commission would continue to raise funds to fund the recovery and build a better and more sustainable future for all, adding: “With a volume of € 50 billion in the first half of the year, “We expect to maintain a strong market presence, assisting Member States in the recovery process and supporting the completion of the capital market and the international role of the euro.”

Since June 2021, the Commission has raised € 71 billion for NextGenerationEU through long-term EU bonds, of which € 12 billion with the first issue of NextGenerationEU green bonds. In addition, the Commission has currently issued some € 20 billion in short-term EU bonds. On this basis, the Commission paid € 54.15 billion to EU countries as pre-financing under the Recovery and Durability Mechanism and over € 6 billion to other EU programs also funded under the NextGenerationEU. In this way, all payment requests in 2021 were fully covered.

In 2022, the Commission intends to issue NextGenerationEU conventional and green bonds through joint ventures and auctions. EU short-term bonds will continue to be issued exclusively through auctions. Following the successful launch of the auction program in September, the Commission will extend the use of tenders as a format for issue. The exact ratio between auctions and joint ventures will depend on market conditions and the Commission ‘s exact financing needs.