MNI BRIEF: Higher Rates Raise Estimated NextGenEU Costs

European Commission estimates for the additional cost of financing its NextGenerationEU programme are now between EUR17 billion and EUR27 billion, though it is using EUR18.9 billion as a working assumption based on interest rates as of June, Budget Commissioner Johannes Hahn has told a briefing.
The estimated cost of financing NGEU has jumped from an original EUR14.9 billion, which had been based on a European Central Bank benchmark rate of no higher than 1.15% by 2027.
The Commission proposed in its long-term budget review a new ‘EURI’ instrument to cover additional rate costs, aiming to address concerns that it might have to cut other spending. While the Commission hopes to agree on EURI by the autumn with member states and the European Parliament, Hahn said other options are available if necessary
Possibilities including tapping existing programmes, such as cohesion and agricultural spending have been mooted by others in the past.
NGEU disbursements have slowed, Hahn noted, as states like Italy struggle to meet milestones and targets required in order to release funds, while rule of law issues have blocked Hungary from receiving anything under the programme. To date payments are still on course, due to large pre-financing amounts paid out during 2021. (See MNI: Italy To Delay ESM Vote Until After Summer – Sources)