The European Union will unveil a plan as soon as this week to jointly issue bonds on a potentially massive scale to finance energy and defense spending in the 27 member states as the bloc copes with the fallout from Russia’s invasion of Ukraine, according to Bloomberg.
The proposal may be presented after the bloc’s leaders hold an emergency summit in Versailles, France, March 10-11, according to officials familiar with the preparations. Officials are still working out the details on how the debt sales would work and how much money they intend to raise.
The extraordinary move comes just a year after the EU launched a 1.8 trillion-euro emergency package backed by joint debt to finance member states’ efforts to deal with the pandemic. Now, the bloc faces massive financing needs as it begins to reform its military and energy infrastructure following Russia’s invasion of Ukraine.
“We have to find new tools to address new issues this crisis raises in front of us,” the EU’s commissioner for the economy, Paolo Gentiloni, said Monday evening to lawmakers in Strasbourg, France. He added that he thought EU leaders would give political guidance on further moves at the summit.
A commission spokesperson declined to comment on the specifics but said officials continue to monitor the situation and are ready to react to the changing circumstances.
The plan would involve the European Commission, the bloc’s executive arm, issuing bonds and then channeling the proceeds to member states in the form of concessionary loans to finance spending in the areas, according to the officials who asked not to be identified because the plans are private.
One option is to structure it like the bloc’s SURE program, some of the officials said, referring to a scheme that was used to finance employment support initiatives in the aftermath of the pandemic.