MNI BRIEF: Single Issuer Name Best For EU, ESM, EIB Bonds

Bank of France Governor Francois Villeroy has called for the bond issues of the EU Commission, ESM and EIB to be issued under the single name of ‘EU bonds’ in an effort to boost efforts to create a Capital Markets Union.

In a speech in Frankfurt Tuesday, in which he calls for a gear change in Europe’s Capital Markets Union drive to boost investment in the green and digital transitions, Villeroy noted that the Commission has already started a unified approach to its own borrowing for NGEU and its other programmes, so helping to avoid market fragmentation and boosting liquidity. In the interest of increasing the supply of safe euro-denominated assets, Villeroy says the EU should go further and create a “genuine European resource and benchmark”.

“… we need to go much further, by aiming to combine the bond issues of the Commission, the European Stability Mechanism and possibly the European Investment Bank: the pool would amount to 1,100 billion euros, and we would then create a genuine European resource and benchmark," he said.