European Commission raises a further €11 billion for NextGenerationEU and to support Ukraine

This article is brought to you in association with the European Commission.

The European Commission has today issued €11 billion in a dual tranche transaction, the proceeds of which will be used to support Ukraine under the EU’s MFA programme and Europe’s recovery under the flagship NextGenerationEU programme. The deal consisted of a €5 billion tap of the 7-year bond due on 4 December 2029 and a new 20-year bond of €6 billion due on 4 November 2042.

Commissioner in charge of Budget and Administration, Johannes Hahn, said: “EU funding is a concrete expression of solidarity with Ukraine and Member States recovering from the pandemic. Today, we have successfully and under challenging market conditions raised a further €11 billion. Of them, €2 billion will be released swiftly to help Ukraine in this war of aggression on European soil.”

From the funds raised through the sale of the new 20-year bond, €2 billion will be granted as loans to Ukraine. This will be the first instalment of the €5 billion in macro-financial assistance (MFA) loans to Ukraine agreed on 20 September 2022.

With today’s transaction, the Commission has issued a total of €86.6 billion in long-term funding under NextGenerationEU in 2022 and €157.6 billion since the start of the programme in June 2021. Of this total, €36.6 billion have been issued since July 2022. This represents 73% of the Commission’s NextGenerationEU funding target for the second half of the year, with further transactions – both auctions and syndications – planned for late October, November and possibly December 2022, as per the funding plan published in June 2022.

Following today’s transaction, the Commission has so far raised €3 billion under its MFA programme for Ukraine in the second half of the year, on top of €1.2 billion earlier in 2022. This will be followed by further loans to Ukraine in the coming weeks. This has been part of the extraordinary support of €19 billion secured by Team Europe for Ukraine to date.

On the basis of the funds raised, the Commission has so far paid out nearly €113 billion under the Recovery and Resilience Facility and, as of end-June, over €15 billion under other EU programmes which benefit from NextGenerationEU financing. The Commission will continue to use the funds raised to support Europe’s post-pandemic recovery, financing Member States under the Recovery and Resilience Facilityas well as via other EU programmes.  

Background

NextGenerationEU is a temporary recovery instrument of more than €800 billion in current prices to support Europe’s recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe.

To finance NextGenerationEU, the Commission – on behalf of the EU – is raising from the capital markets up to around €800 billion between now and end-2026.

In parallel to NextGenerationEU, the Commission runs several back-to-back funding programmes to finance the specific needs of the EU Member States and third countries. This includes the macro-financial assistance programme, under which the Commission is currently providing support to Ukraine, among others.

7-year tap

20-year bond