In recognition of the increased liquidity of EU-Bonds, the European Central Bank (ECB) has decided to move EU-Bonds from haircut category II to haircut category I in its risk control framework.

The ECB decision will come into effect as of 29 June 2023. From this point on, EU debt will receive the same lower haircuts as debt instruments issued by central governments in the ECB’s collateralised credit operations. As a result, it will become cheaper to use EU debt in refinancing operations with the ECB, and there will be no additional costs compared to the use sovereign debt.

The ECB decision reflects the greater liquidity of EU securities following increased EU issuance in recent years to fund flagship programmes such as SURE, NextGenerationEU and MFA+.

Since January 2023, the European Commission – on behalf of the EU – is issuing single branded EU-Bonds and distributing the proceeds as per the needs of its different programmes.