UPDATE 1-The European Commission will borrow 80 billion euros in 2021 to finance the recovery
(Add details, context)
BRUSSELS, June 1 (Reuters) – The European Commission is expected to borrow around 80 billion euros ($ 97.76 billion) in long-term bonds this year to finance the European Union’s economic recovery plan after the pandemic, the EU executive said in a statement. Tuesday.
The Commission said the borrowing, which is expected to start later in June, would be complemented by tens of billions of euros in short-term EU bonds to cover remaining financing needs, adding that it would updated its financing plan in September.
“The Commission will be able to finance, in the second half of the year, all grants and loans provided to Member States under the Recovery and Resilience Facility, as well as meeting the needs of EU policies that receive NextGenerationEU funding, “the Commission said. said in a statement.
The money is the first part of the EU’s historic program of 800 billion euros, at current prices, which will be distributed to the 27 governments of the bloc in the form of grants and loans.
To obtain its share of the liquidity, each government must submit to the Commission a reform and investment plan aimed at making the economy greener and more digital and strengthening its resilience to future health crises.
So far 22 governments have sent in their plans and, after the time needed for assessment by the Commission and other EU governments, EU officials expect the first funds to start. to flock to the capitals at the end of July.
The Commission said it would borrow on average around € 150 billion per year between mid-2021 and 2026, making the EU one of the largest issuers of euros.
He said the first bond issue would take place through syndication with the institutions included in the Commission’s primary brokerage network of 39 banks. Other syndicated shows would take place before the end of July, he said.
The Commission also intends to start issuing European bonds and European bonds through auction procedures from September 2021. Auction details will be released later this year. ($ 1 = 0.8183 euro) (Reporting by Philip Blenkinsop and Jan Strupczewski; edited by Marine Strauss and Jonathan Oatis)