European Commission to borrow >€50bn in 2027?

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Question

The EU corona recovery package or the Next Generation EU COVID-19 recovery plan, introduced for the first time large scale amounts of common EU bonds issued by European Commission ("coronabonds"). Previously, proposals to introduce such "eurobonds" had been opposed several EU countries since 2011. The NGEU package allows the European Commission to borrow €750 bn euros on behalf of European Union. Total of €672.5 bn are to distributed as grants and loans via Recovery and Resilience Facility and rest by other programmes.

In addition to NGEU, the commission also introduced in October 2020 a €100 bn SURE instrument ("The European instrument for temporary Support to mitigate Unemployment Risks in an Emergency"). Prior to NGEU, the Commission has issued bonds to provide assistance and loans to some EU countries, but on much smaller scale.

Currently the NGEU programme is supposed to be temporary, with net borrowing activity ending in 2026, but some have called for strengthening the EU fiscal union by making the NGEU or similar mechanisms permanent.

Will the European Commission or other EU institution net borrow more than €50bn in 2027?

Resolves positively if European Commission, or other body or institution representing the EU, will borrow more than €50 000 000 000 capital (net) from markets, in 2018 prices.

Organizations created by separate treaties between EU countries, such the European Stability Mechanism, do not not count. The EIB and the EFSF are also excluded.

The question specifies 2018 prices to be comparable with NGEU RRF programme, which also specifies 2018 prices. See Regulation establishing the Recovery and Resilience Facility, Article 6

The question specifies net borrowing activity, as the intention is to ask if EU will continue to issue new debt.

The intention of "Commission or other institution" criteria is to cover changes to the EU internal organization that result bonds continuing to be issued in behalf of the EU but not by the European Commission.

Categories:
Politics – European

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