EU initiates debt acquisition in October
In a significant move to support the European economy, Budget Commissioner Johannes Hahn has announced plans to launch the first European bonds for the EU short-time work scheme, known as SURE, in the second half of October.
The new EU bonds are seen as an advantage for the cohesion of the currency union, according to Commissioner Hahn. He believes that these bonds will strengthen the union's financial stability, particularly during these challenging times.
The total volume of SURE is set to reach up to 100 billion euros, with the Commission aiming to serve the bond market with different maturities. The average maturity of these bonds will be fifteen years, ranging from three to thirty years.
While the exact size of the first tranche of the EU bond loans for SURE, to be issued in the second half of October 2021, has been confirmed at EUR 16 billion, the total volume of the initial bond issue is yet to be finalised, but will be significantly less than 50 billion euros.
Following the initial issue, a second, larger tranche of bonds for SURE will follow in the first half of next year. The financial market shows massive interest in these European bonds due to their quality, with the market reacting very positively to them, according to Commissioner Hahn.
It's important to note that all liabilities arising from the bond issue for SURE must be repaid by 2053. For "Next Generation EU", all liabilities must be repaid by 2058.
The Commission did not mention any specific means of sharing or emailing the bonds in the current paragraph.
This move by the Commission is expected to provide much-needed financial support to member states facing economic hardships due to the pandemic, thereby helping to maintain the cohesion of the currency union.
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