MNI BRIEF: Very Heavy NGEU Issuance Pipeline For '24 -EU Bohan

European Commission issuance for its EUR750bn NGEU programme is “back on track” following the slowdown in the second half of 2023 as states revised their National Recovery Plans to reflect the new priority on energy independence and security, a senior EU Commission budget official said Wednesday.

Inflation, higher interest rates and skills shortages in labour markets had also helped slow down the implementation of projects at the national level, but this temporary hiatus is over, and the programme is back on track,” Niall Bohan, director of asset management and financial risk at the Commission’s DG Budget told the AFME European Government Bond forum in Brussels.

The official said that EUR140 to 150bn of NGEU disbursements to states is now in the queue for final approval by the EU and there was a “very heavy pipeline” of NGEU issuances for 2024. This would leave the EU would end this year as the bloc's fifth largest issuer, after Spain with a trillion euros of outstanding bonds, he said.

The EU’s planned launch of a repo facility for EU bonds in the summer '24 and efforts to include the bonds in market indices would help bed the bonds into debt investors thinking, he said.