EC borrows €5bn to send to Ukraine, finance recovery

Belgium, (Brussels Morning Newspaper) The European Commission has borrowed 5 billion euros in its first syndicated transaction of the year to send more money to Ukraine and financial recovery.
In a statement released on Tuesday, the EC pointed out that it adopted joint borrowing as its main funding method this year, noting that bonds issued under the approach are branded as EU bonds rather than labelled separately for individual EU programmes.
The body stressed that investor interest was high, noting that the issue was more than ten times oversubscribed as bids exceeded 51 billion euros.
The Commission reiterated that the money “will be used to finance the EU priorities and more concretely the two main programmes which currently benefit from funding via borrowing – the NextGenerationEU recovery programme and the Macro-Financial Assistance+ programme for Ukraine.”
The latest transaction brings EC’s borrowing this year to almost 10 billion euro of the 80 billion target for the first half 2023, with the Commission reminding that it borrowed 4.68 billion earlier this month.
Of the 80 billion euros to be borrowed in the first two quarters of the year, approximately 70 billion will go towards NextGenerationEU and roughly 10 billion to Ukraine.
Johannes Hahn, European Commissioner for Budget and Administration, stated “our first syndicated transaction of 2023 marks a strong and confident start to the new year of EU borrowing.”
High demand
“The overwhelming demand for our bond demonstrates the scale and breadth of the investor base that the EU has cultivated for its borrowing activity,” he pointed out and concluded, “we will continue our strong presence in the markets in the coming weeks and months as we proceed with the execution of our issuance plan under our unified funding approach.”
The EC reminded that it is borrowing money on international markets on behalf of the EU and disbursing it to bloc members and other countries through different borrowing programmes.
Its largest borrowing programme is the NextGenerationEU, worth approximately 800 billion euro, which focuses on the green push, digitalisation and resilience.
The EC noted that it disbursed roughly 142 billion euro through the Recovery and Resilience Facility thus far.