The European Commission has confirmed plans to tap the capital markets for a further €70 billion in the latter half of 2025, pushing ahead with one of the most ambitious borrowing operations in the EU’s history.
This follows €86 billion already raised since January, keeping the bloc on track to hit its full-year borrowing target of €160 billion.
The fresh funds will bankroll a range of programmes including the flagship NextGenerationEU recovery plan, financial assistance for Ukraine, development funding for the Western Balkans, and macro-financial loans to countries on the EU’s periphery. In doing so, the Commission is further entrenching its position as a centralised borrowing authority — a role that would have been unthinkable just a few years ago.
Borrowing will continue to follow the Commission’s so-called “unified funding approach”, where issuances are conducted according to six-month funding strategies. These provide a degree of predictability to markets, while offering the Commission flexibility to adjust to shifting political and financial demands.
A sizeable portion of the funds will come in the form of NextGenerationEU Green Bonds, with €75 billion already raised through this instrument since 2021. These green-labelled bonds are intended to finance climate-related investment under the Recovery and Resilience Facility (RRF), the centrepiece of the EU’s post-pandemic economic revival plan. Future green bond issuance will hinge on whether national governments continue to certify additional spending as eligible under the bloc’s green bond framework.
All this is backed by the EU budget, with Member States on the hook to guarantee repayments. Under the Treaties, contributions to the EU’s budget are a binding legal obligation, meaning Brussels has little difficulty convincing investors of its creditworthiness.
Since mid-2021, the Commission has disbursed over €304 billion in loans and grants to EU Member States through the RRF alone. A further €74 billion has been deployed across other EU initiatives. Meanwhile, Ukraine has so far received more than €16 billion through the newly launched Ukraine Facility, part of a wider plan to provide Kyiv with up to €33 billion in loans through 2027.
That’s in addition to the €18 billion disbursed in 2023 via the EU’s Macro-Financial Assistance+ programme — emergency funding designed to stabilise Ukraine’s battered economy amid the ongoing war. Most recently, Brussels issued €7 billion more in loans to Kyiv under a separate €18 billion package that is to be repaid with revenues derived from frozen Russian state assets, as part of the G7-led Extraordinary Revenue Acceleration scheme.
Yet Ukraine is just one part of a broader strategic realignment. At the end of May, EU Member States signed off on a new Security Action for Europe (SAFE) instrument, greenlighting the Commission to raise up to €150 billion in defence-related loans by the end of the decade. These funds, to be funnelled towards joint procurement of military capabilities, represent a historic step toward collective European defence financing. Borrowing for SAFE is expected to begin in 2026, pending the finalisation of national loan plans.
Behind the scenes, the Commission has been steadily refining its approach to debt management. Since January 2023, it has streamlined its operations under a single EU-Bond label, abandoning the previous patchwork of programme-specific bonds. Debt issuance is now handled through twice-yearly funding plans and pre-scheduled issuance “windows” — moves designed to give investors more certainty and improve secondary market liquidity.
In a further bid to attract buyers and enhance pricing efficiency, Brussels unveiled a market-making framework in late 2023. Under the scheme, EU Primary Dealers are encouraged to post regular price quotes for EU securities on electronic platforms, thereby boosting visibility and trading activity. A repurchase facility — essentially allowing the Commission to buy back its own bonds — was also introduced in autumn 2024, adding another layer of flexibility to its market operations.
This year has seen the launch of a new three-leg auction format, offering a mix of maturities in a single sale — an innovation aimed at broadening appeal among institutional buyers. Now, the Commission is preparing to roll out non-competitive auction allocations, enabling dealers and their clients to place orders without having to bid against others — another incentive to deepen participation in the EU’s rapidly expanding capital market footprint.
Alongside its bond programme, the Commission continues to run short-term liquidity operations to ensure it can meet funding needs on schedule, especially as disbursement demands fluctuate across various schemes.
Brussels’ expanding financial machinery signals not just a response to short-term crises, but a long-term shift in how the EU conceives its role — no longer merely as a rule-setting bureaucracy, but increasingly as a sovereign-like issuer operating at scale in global debt markets. For the first time, Europe is borrowing with a unified voice, and the markets — for now — are listening.
