The Commission’s borrowing operations: A closer look at the new diversified funding strategy

Key Points

• In response to the increased volume and number of borrowing operations under the Next Generation EU framework, the European Commission has developed a new funding strategy.

• The Commission now aims to establish a ‘regular capital market presence’ by issuing bonds under a single EU label, pursuing a more activist debt management strategy, and raising funds through regular auctions.

• Although these changes are significant in the context of EU borrowing, they largely continue long-term trends in EU borrowing reforms.

• The new funding strategy implies greater financial risks for the EU, but it also makes it easier to hold the Commission accountable by bringing its operations closer to that of national treasuries