The Daily Update: NextGenerationEU / EU SURE

The bond issuance to fund the EUR750bn NextGenerationEU recovery programme will more than likely begin in July after national ratifications of key legislation are signed off, with the EU then coordinating with sovereign borrowers to avoid market saturation. According to those in the know, so far seven countries have completed the ratification and others are well advanced in terms of their preparation. The idea is to get all ratifications completed by the end of June, so allowing borrowing to commence in July. The European Commission is trying to ensure that the ratification process goes as smoothly as possible, believing, as it stands, there are no serious political obstacles now standing in the way.

The NextGenerationEU recovery programme ratifications come after it was announced the European Commission has distributed another EUR14bn earlier this month to nine member states under the EU SURE programme. The loans are designed to assist member states in addressing sudden increases in public expenditure with the aim of preserving employment. Specifically, they will help countries cover the costs directly related to the financing of national short-time work schemes, along with other similar measures that they have put in place as the response to the ongoing pandemic. Ursula von der Leyen, the president of the European Commission, stated that ‘Under the SURE programme, the EU has mobilised up to €100 billion in loans for EU Member States to save jobs and keep people in work. The funds are regularly making their way to our Member States, helping them financially to mitigate the impact of the coronavirus pandemic’.