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

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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