EU readies €800bn debt programme but safe asset status in doubt

hahn
By Lewis McLellan
15 Apr 2021

The European Commission says it is ready to pull the trigger on Next Generation EU — an €800bn debt programme designed to finance the bloc’s economic recovery from the coronavirus pandemic. Political hurdles remain but from a funding perspective the EU is raring to go. However, market participants warn that even with its colossal funding need, it may not fulfil ambitions of becoming a true eurozone safe asset, writes Lewis McLellan.

Johannes Hahn, the commissioner for budget and administration said this week that it is “no exaggeration to call Next Generation EU a capital markets game changer”,  claiming that market participants had told him that it could be considered “a euro-denominated safe asset”.

The closest thing to that is ...

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