The EU recovery fund may transform European bond markets
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The EU recovery fund may transform European bond markets

The EU’s new recovery fund is a historic step to help the countries worst affected by Covid avoid a debt trap. If the EU’s short-term bills become a risk-free, interest-rate instrument, this temporary response to the deadly virus could become a permanent change to Europe’s capital markets

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In This Story

  • Vast issuance programme
  • EU could soon be borrowing €200 billion a year
  • Where to start?
  • Syndications first, with new issue concessions
  • The case for T-bills
  • Early move could raise a lot of money quickly
  • Becoming a sovereign
  • Pitch is high quality exposure to whole of EU
  • Euros, but maybe dollars too
  • Issuing outside the euro would give flexibility
  • Completing CMU
  • T-bills might transform Europe's capital markets
  • Temporary to permanent?
  • Will emergency response be dismantled?

    Towards the end of September the EU will launch a large new borrowing programme in the international debt capital markets that may see it sell over €30 billion of new bonds in the last three months of 2020. That is more than the EU has ever issued in any single year before.

    Next year, it will borrow more than twice that amount just to complete the €100 billion funding of the catchily titled Support to mitigate Unemployment Risks in an Emergency (Sure) programme, first proposed by the European Commission in April and approved by the European Council in May.



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    Editorial director
    Peter Lee is editorial director. He joined Euromoney straight from Oxford University in 1985, and has written about banking and capital markets ever since, being appointed editor in 1999. He became editorial director of Euromoney in May 2005.
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