EXCLUSIVE-EU considers auctions to sell pandemic-related debt

EXCLUSIVE-EU considers auctions to sell pandemic-related debt

EXCLUSIVE-EU considers auctions to sell pandemic-related debt

AMSTERDAM (Reuters) – The European Commission is exploring the possibility of auctioning bonds in preparation for expanding debt issuance to finance the post-pandemic economic recovery, Johannes Hahn, the EU's budgetary commissioner, said Tuesday.

“The focus of the commission is on the SURE bond issue this month,” Khan said, referring to the EU's unemployment program, which will be financed by around € 100 billion in debt.

“In addition, the commission is studying all options for increasing the volume of emissions, including the use of auctions,” said Khan.

The issuance of SURE debt instruments is expected to rely mainly on bank syndicates for the sale of bonds to investors – a format commonly used by supranational entities such as the European Union. But after the placement of SURE bonds, the EU will need to attract another 750 billion euros to the economic recovery fund, from which the lion's share of financial support to the member countries of the bloc will come.

Khan said the European Commission is exploring all the options the market can offer to ensure liquidity of its debt obligations in secondary markets.

(Yoruk Bahcheli, translated by Olga Devyatiarova. Editor Anna Kozlova)

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