NextGenerationEU diversified funding strategy in a nutshell

To raise up to around €800 billion (in current prices) for the NextGenerationEU, the Commission is using a diversified funding strategy.

A diversified funding strategy combines the use of different funding instruments and funding techniques with an open and transparent communication to the market participants.

This approach is in line with the best practice of big issuers. It is enabling the Commission to raise the needed volumes in a smooth and efficient way. This is attracting investors to Europe and strengthening the international role of the euro in turn.

The Commission’s diversified funding strategy combines:

  • An annual borrowing decision; Funding plan key parameters communicated biannually, to offer transparency and predictability to investors and other stakeholders;
  • Structured and transparent relationships with banks supporting the issuance programme (via a Primary Dealer Network);
  • Multiple funding instruments (medium and long-term bonds, some of which will be issued as NextGenerationEU green bonds, and EU-Bills) to maintain flexibility in terms of market access and to manage liquidity needs and the maturity profile;
  • A combination of auctions and syndications, to ensure cost efficient access to the necessary funding on advantageous terms.

All borrowing operations have been encoded in a robust governance framework, which ensures coherent and consistent execution.

The Commission will continue to coordinate with other issuers in its work, including the EU Member States and supranationals.

An overview of the Commission’s diversified funding strategy is available in the relevant communication and in this factsheet.

Funding plans

In line with established market practice and to offer transparency and predictability to investors and other stakeholders, the Commission is publishing on a regular basis:

  • An annual borrowing decision
  • Semi-annual funding plans

Read more about the annual borrowing decision and funding plans

Primary Dealer Network

The Primary Dealer Network reinforces the Commission’s capacity and ensures transparent relations with banks that support the placement of the EU’s borrowing.

Read more about the Primary Dealer Network

Funding instruments

To be able to place the full size of NextGenerationEU under optimal conditions, the Commission uses bonds with varying maturities as well as short-term debt instruments – EU-Bills.

Read more about the funding instruments

Auctions and syndications

The use of a variety of funding techniques enables the Commission to attract the necessary funding (even under difficult market conditions), enlarge the investor base and reduce funding costs.

To achieve this, the Commission uses a combination of syndications and auctions:

  • Syndication
    For syndicated transactions, the Commission works with a group of underwriters, usually banks, whose role is to place the debt with investors. Syndications are the traditional technique for debt issuance by supranational issuers. The Commission has used syndication exclusively in the past and continues to rely on it for a substantial part of its NextGenerationEU and other bond issuances.

  • Auctions
    To ensure greater cost-efficiency, the Commission has added auctions to its toolbox. Auctions are the preferred issuance technique of large sovereigns like Germany and France (used for more than 90% of their volumes). The Commission is using the auction system TELSAT by Banque de France to carry out its auction operations. The Commission will use the auction format to issue all of its EU-Bills as well as some of its longer-term bonds.

The Commission will apply a progressive approach in order to ensure the optimal balance between syndications and auctions over time, taking into account market participants’ reactions.

More information about the Commission’s approach to auctions is available in the dedicated section of the website.


All documents linked to the EU funding strategy for NextGenerationEU are available in the documents' section of our website.