The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Chaos and confusion reigns over funding of EU bailout plan

The speed at which the European Union was forced to announce its €750 billion package to calm market concerns about potential defaults in Greece and elsewhere is shown by the remarkable lack of detail on how the €440 billion portion may be funded that is not provided directly by the EU and the IMF

Markets may have been calmed by the announcement of the EU’s bailout plans last weekend, but the proposal to raise up to €440 billion of additional funding through the capital markets has led to a flurry of activity and speculation among EC officials, sovereign borrowers, rating agencies and investment bankers.

Details on how the money will be raised, when and by what entity are remarkably scarce.

“We really have no idea what is going on,” says the head of borrowing at one large European SSA.

Among the known unknowns surrounding the plan are: where the special purpose vehicle that issues bonds will be incorporated; what the SPV’s rating will be; who will be in charge of the borrowing programme and manage its liquidity; whether the SPV will issue in advance or on an ad-hoc basis, as and when funding is needed; and whether any issuance will be guaranteed jointly and severally by all EU nations, or each eurozone country will take a pro-rata share of the guarantees.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree