REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Half-yearly report on the implementation of borrowing, debt management and related lending operations pursuant to Article 13 of Commission Implementing Decision C(2023)8010 1 January 2025 to 30 June 2025
Date: 2025-09-24
Institutions: Directorate-General for Budget, European Commission
Subjects: EU aid, EU borrowing, EU financing arrangements, EU strategy, bond, debt, financial aid, financial management, issue of securities

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.9.2025  COM(2025) 588 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Half-yearly report on the implementation of borrowing, debt management and related lending operations pursuant to Article 13 of Commission Implementing Decision C(2023)8010                                                              1 January 2025 to 30 June 2025                                        
 
 
Table of Contents 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Summary ................................................................................................................................................................................. 3 

Introduction............................................................................................................................................................................ 4 

Implementation of borrowing operations in the first half of 2025 ...................................................... 5 

Cost of funding and liquidity management costs ........................................................................................... 9 

Steps to further develop the EU-Bond market ............................................................................................... 12 

Other milestones in the first half of 2025 ....................................................................................................... 12 

Issuance outlook for the second half of 2025 ............................................................................................... 13 

EN 

  EN 

 
 
 
 
 
FUNDING RAISED IN THE FIRST HALF OF 2025 

USE OF PROCEEDS 

Total NextGenerationEU 
 12.8 billion 

H1 2025 

Total NextGenerationEU 
 378.6 billion 

Since the start of the programme 

All amounts in billion EUR 

1 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
 
 
 
 
 
 
 
 
 
 
 
OUTSTANDING EU-BONDS  
at 30/06/2025  

  45.4 bn back-to-back 

 516.2 bn total bonds under the unified funding approach 

         €441.1 bn conventional EU-Bonds 

         €75.1 bn NextGenerationEU Green Bonds 

KEY FACTS about H1 2025 

- Six syndications and seven auctions raised EUR 85.8 billion, with an average maturity of 

around 12 years. 

- Most of the funds were used for NextGenerationEU (EUR 12.8 billion) and to support Ukraine 
(EUR 10.1 billion), with additional disbursements under the Western Balkans Reform and 
Growth Facility (EUR 118 million) and the Reform and Growth Facility for Moldova (EUR 270 
million). 

- The cost of funding was 3.17% for NextGenerationEU (compared with 2.99% in the second 

half of 2024), 2.72% for the Ukraine Facility, 2.53% for the macro-financial assistance (MFA) 
loan under the G7 Extraordinary Revenue Acceleration (ERA) loans initiative, 2.77% for the 
Western Balkans Reform and Growth Facility, and 2.89% for the Reform and Growth Facility 
for Moldova. 

2 

                                   
 
 
 
 
 
 
 
1. Summary 

In  the  first  half  of  2025,  the  EU  raised  EUR  85.8  billion  in  long-term  funding  through  six 
syndications  and  seven  auctions.  EUR  6.9  billion  of  that  amount  was  raised  through 
NextGenerationEU Green Bonds. At the end of June 2025, the EU had EUR 661.6 billion in EU-Bonds 
outstanding (with an average remaining maturity of about 12 years), of which EUR 75.1 billion was 
in the form of NextGenerationEU Green Bonds. EU-Bills outstanding at the end of June 2025 stood 
at EUR 33.3 billion. 

The  EUR  85.8  billion  raised  in  H1  2025  forms                 C         ’    otal  planned  bond 
issuances  for  2025  of  around  EUR  160  billion,  with  a  EUR  70  billion  issuance announced  for  the 
second half of 2025. This would represent the highest annual EU issuance to date, building on the 
steady increase in previous years (from EUR 120 billion in 2023 to EUR 140 billion in 2024).  

The proceeds from these issuances meant that the Commission was able to continue to meet in a 
timely manner disbursement needs linked to the different programmes financed by borrowing. Of 
these  programmes,  NextGenerationEU  is  the  largest,  where  EUR 378.6  billion  of  funds  raised 
through  EU  borrowing  have  already  been  disbursed.  However,  significant  support  under  the 
Recovery and Resilience Facility (RRF) still needs to be disbursed in 2025 and 2026.1 

In the first half of 2025, EUR 12.8 billion of the issuance proceeds were disbursed to implement 
NextGenerationEU investments and reforms. Ukraine received a total of EUR 10.1 billion under the 
                                                           x              ’    x                     
Acceleration  (ERA)  loans  initiative.  A  further  EUR  270  million  in  proceeds  were  used  to  finance  a 
loan  under  the  Reform  and  Growth  Facility  for  Moldova  and  EUR  118  million to  provide  loans  to 
North Macedonia, Albania, Montenegro and Serbia under the Western Balkans Reform and Growth 
Facility.  

There  was  an  increase  in  liquidity  holdings  during  the  first  half  of  2025,  as  NextGenerationEU 
disbursements  fell below the amounts forecast based on indications by Member States. Unlike in 
previous reporting periods when cash balances generated revenues, this six-month period has seen 
these cash balances give rise to indicative costs of around EUR 195 million due to their long-term 
funding  profile.  The  Commission  actively  manages  these  temporary  cash  balances  to  minimise 
these holding costs. The accumulation of cash balances is temporary, resulting from issuance on a 
regular and predictable schedule to ensure the best market conditions, while disbursements follow 
the  implementation  specificities  of  each  supported  programme,  and  in  particular  the  RRF.  As  we 
approach  the  2026  end-date  for  NextGenerationEU  disbursements,  funding  inflows  and  outflows 
will converge. 

During the first half of 2025, EU issuance continued to benefit from strong investor demand, while 
yields on EU-Bonds tightened versus most European government bonds. The 10-year interest rate 
spread  between  EU-Bonds  and  a  50/50  basket  of  German/French  sovereign  bonds  declined  from 
13  basis  points  at  the  start  of  2025  to  5  basis  points  by  the  end  of  June  2025.  Nevertheless, 

1  In  its  Communication  of  4  June  2025  titled  ‘NextGenerationEU:  The  road  to  2026’  (COM(2025)310  final), 
the Commission describes the progress made with the implementation of the national recovery and resilience 
plans and calls on Member States to speed up implementation as almost EUR 335 billion still needed to be 
disbursed  under  the  RRF  at  the  time  of  the  Communication.  This  amount  will  mainly  be  financed  through 
borrowing, but also in part through other resources (i.e. the Emissions Trading System (ETS) and the Brexit 
adjustment  reserve  (BAR)).  A  further  EUR  700  million  in  RRF  disbursements  took  place  in  June  after  the 
Communication was adopted. 

3 

 
 
 
driven  by  market  conditions  affecting  all  issuers,  t      ’                    2  increased  during  this 
period to 3.17% compared to 2.99% for the previous funding period.  

As part of its sustained efforts to consolidate and  improve its issuance programme for EU-Bonds 
and EU-Bills, in April 2025 the Commission introduced three-leg bond auctions (auctions for three 
different maturities), allowing it to increase the amounts raised at each auction. This step will be 
complemented by  the  introduction  of  non-competitive  auction  allocations  in  autumn  2025,  which 
should  bolster  demand  for  bonds  sold  via  auction.  In  January  2025,  the  Commission  also 
introduced three-leg bill auctions, with the launch of new 12-month EU-Bill lines in addition to the 
3-month  and  6-month  maturities.  Independently  of  the  Commission,  market  stakeholders 
continued  their  initiatives.  Following  the  launch  of  an  index-based  future  in  December  2024,  the 
launch of  a physically-settled EU-Bond futures contract from September 2025  was announced in 
the first half of 2025.  

At the end of May 2025, the Council adopted the new Security Action for Europe (SAFE) instrument. 
This allows the EU to raise  up to EUR 150 billion through capital markets by  the end of 2030 to 
finance  loans  to  Member  States  that  can  be  used  to  accelerate  the  procurement  of  defence 
capabilities. This new mandate, together with the sizeable refinancing needs of already outstanding 
bonds, implies a steady EU market presence beyond 2027. Since the launch of NextGenerationEU in 
June 2021, the Commission has received mandates to finance other policies for a combined total 
of EUR 240 billion, with time frames for new debt issuance extending to 2030. All funding needs 
are  pooled  and  funded  via  the  issuance  of  EU-Bonds  and  EU-Bills  under  a  single  funding 
programme, thereby supporting the market presence of the EU as an issuer.  

2. Introduction 

The  Commission  has  been  borrowing  funds  on  behalf  of  the  EU  for  over  40  years.  The  past  five 
                                                   ’                   as  it  relies  on  capital  markets  to 
finance  large  programmes  such  as  SURE3,  NextGenerationEU,  and  financial  assistance  to  Ukraine 
(MFA+, the Ukraine Facility, and the MFA loan as part of the G7 ERA initiative). On 30 June 2025, 
the EU’s total outstanding debt was EUR 694.9 billion, of which EUR 33.3 billion was in the form of 
EU-Bills. 

This  half-yearly  report4  reviews  the  implementation  of  borrowing  operations  between  1  January 
2025 and 30 June 2025. The report also provides an outlook for EU-Bond issuance in the second 
half of 2025. It does not evaluate how the proceeds from EU-Bond issuances are used, including 
for  green  expenditure,  as  this  is  covered  in  separate  reports  under  the  regulations  for  each 
instrument5. 

Further to the recommendation of the European Court of Auditors in June 20236, the annex to this 
report presents indicators that can be used to monitor the implementation of the overarching debt 
management strategy guiding7 the Commiss   ’                          8.   

2  In  accordance  with  the  cost  allocation  methodology  set  out  in  Commission  Implementing  Decision  (EU) 
2024/1974. 
3 The European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE). 
4  Prepared  in  accordance  with  Article  13  of  Commission  Implementing  Decision  C(2023)8010,  which  lays 
down the arrangements for implementing the unified funding approach for borrowing and debt management 
operations. 
5 See, for example, the annual reports for the Recovery and Resilience Facility and Macro-Financial Assistance 
and the NextGenerationEU Green Bonds Allocation and Impact report.   
6 Special report 16/2023: NGEU debt management at the Commission and Replies of the Commission 

4 

 
 
 
3. Implementation  of  borrowing  operations  in  the  first  half 

of 2025 

In the first half of 2025, the Commission continued to raise funds in the markets using its unified 
funding approach. In addition to meeting all disbursement commitments on time, the amounts and 
maturities  of  the  bonds  issued  remained  within  the  pre-set  parameters,  and  the  financing  terms 
                                              ’    z  and rating. The sections below present some of 
                               C         ’                                                 first  half  of 
2025.                                                              C         ’                   
are discussed in the annex to this report. 

EXECUTION OF FUNDING OPERATIONS IN THE FIRST HALF OF 2025 

The  Commission  raised  a  total  of  EUR  85.8  billion  in  EU-Bonds9,  with  an  average  maturity  of 
around 12 years (which is similar to the average maturity for the funding raised in the second half 
of 2024). During the first half of 2025, NextGenerationEU Green Bond issuance was EUR 6.9 billion.  

The  Commission  used  a  mix  of  six  syndications  (59%  of  the  amount  raised)  and  seven  auctions 
(41% of the amount raised), in keeping with the announced target. In March 2025, the Commission 
introduced the use of three-leg bond auctions (two-leg bond auctions had been used previously) in 
order to allow a slight increase in volumes per auction. EU-Bonds were issued at regular intervals 
over the six-month period, taking market liquidity conditions into account while ensuring a regular 
presence in the market.  

The transactions in the first half of 2025 brought the total amount of outstanding EU-Bonds on 30 
June  2025  to  EUR  661.6  billion,  of  which  EUR  516.2  billion  was                          ’           
funding  approach.  The  total  value  of  outstanding  NextGenerationEU  Green  Bonds  was  EUR  75.1 
billion. 

In  January  2025,  the  Commission  also  introduced  three-leg  bill  auctions,  with the  launch  of  new 
12-month  EU-Bill  lines  in  addition  to  the  3-month  and  6-month  maturities.  At  the  end  of  June 
2025, the EU had EUR 33.3 billion in credit outstanding through EU-Bills. 

7 The half-yearly report on the execution of the EU borrowing and lending operations from 1 January 2023 to 
30  June  2023  contains  a  description  of  the  overarching  debt  management  strategy,  see  the  fourth  Half-
yearly report on the execution of the EU borrowing and lending operations. 
8 For all of the pre-NextGenerationEU programmes the Commission used a  back-to-back funding approach, 
issuing bonds and transferring the proceeds directly to beneficiary countries on the same terms (i.e. interest 
rate and maturity) that it received. When the Commission set up NextGenerationEU in 2021, it established a 
diversified  funding  strategy  of  the  type  implemented  by  the  largest  euro-area  sovereign  issuers,  using 
different funding instruments (EU-Bonds and EU-Bills) and funding techniques (syndications and auctions) to 
cover  long-term  and  short-term  funding  needs.  In  December  2022,  the  Parliament  and  Council  amended 
Article 220a of the Financial Regulation to allow the Commission to broaden the diversified funding strategy 
to  other  EU  borrowing  programmes,  creating  a  unified  funding  approach  for  all  EU  borrowing  and  lending 
programmes  under  which  the  EU  issues  single-         ‘  -B    ’,  rather  than  separately  denominated 
bonds for individual programmes such as NextGenerationEU, SURE, and MFA. 
9 In line with previous semesters, the difference compared to the funding plan target (EUR 90  billion in H1 
2025) reflects     C         ’  under-allocation in the final amounts raised through bond auctions in order 
to secure the most attractive financing conditions in these transactions given prevailing bidding. 

5 

 
 
 
 
 
 
Chart 1: Funding raised under the unified funding approach 

47

31

24

14

42

32

37

27

51

35

66

5

35

35

15

15

H2 2021*

H1 2022

H2 2022

H1 2023

H2 2023

H1 2024

H2 2024

H1 2025

Through auctions

Through syndications

* The first  two NextGenerationEU transactions took place in June 2021. These have been included in the  figure for H2 
2021 as they were part of the same funding plan as the transactions that took place in H2 2021. 

All amounts in billion EUR 

DISBURSEMENTS 

On  the  back  of  these  transactions,  the  Commission  continued  to  fund                ’  national 
recovery  and  resilience  plans  by  disbursing  the  proceeds  quickly  (within  nine  working  days  on 
average). 

Overall,  in  the  first  half  of  2025,  the  Commission  disbursed  a  total  of  EUR  23.3  billion  for  all 
policies  combined.  EUR  12.8  billion  was  disbursed  to  finance  NextGenerationEU.  Of  that  amount, 
EUR  8.2  billion  was  used to  finance  Member  State ’  national  recovery  and  resilience  plans  under 
the RRF. This can be broken down into EUR 5.7 billion in the form of grants to 11 Member States 
and  EUR  2.5  billion  in  the  form  of  loans  to  3  Member  States.  The  remaining  EUR  4.6  billion  was 
used to finance EU-managed programmes supported by NextGenerationEU10. 

Overall,  since  the  summer  of  2021,  the  Commission  has  disbursed  EUR  391  billion  to  support 
NextGenerationEU.  This  comprises,  EUR  205.9  billion  in  grants  and  EUR  111.2  billion  in  loans  to 
Member  States  under  the  RRF,  and  EUR  73.9  billion  for  EU-managed  NextGenerationEU 
programmes. Of the total EUR 391 billion in support for NextGenerationEU, EUR 378.6 billion has 
been financed by issuing debt11. 

In  addition  to  NextGenerationEU  disbursements,  the  Commission  disbursed  EUR  10.1  billion  to 
Ukraine during the first half of 2025, of which EUR 3.1 billion under the Ukraine Facility and EUR 7 
billion under the MFA programme for Ukraine as part of the G7 ERA initiative.  

10 These include the Strategic  Technologies for Europe Platform (STEP),  Horizon Europe, the InvestEU Fund, 
ReactEU, the EU Civil Protection Mechanism (RescEU), the European Agricultural Fund for Rural Development 
(EAFRD), and the Just Transition Fund. 

11  An  additional  EUR  12.4  billion  in  NextGenerationEU  expenditures  was  financed  by  other sources  (i.e.  ETS 

and BAR). 

6 

 
 
 
 
During the  first  half  of  2025,  EU-Bond issuance  also  financed  EUR  118 million  in  loans to  North 
Macedonia, Albania, Montenegro and Serbia under the Western Balkans Reform and Growth Facility 
and EUR 270 million in loans under the Reform and Growth Facility for Moldova. 

INVESTOR DEMAND AND SECONDARY MARKET LIQUIDITY 

EU-Bond  issuances  continued  to  enjoy  demand  from  a  balanced  and  diversified  global  investor 
base. 

Chart 2: Investors in syndicated transactions executed in H1 2025 by investor type 

33%

24%

17%

17%

Bank treasuries

Fund managers

8%

Central banks / official institutions

Insurance and pension funds

2%

Banks

Hedge funds

During  H1  2025,  over  40%  of  the  EU-Bonds  issued  through  syndication  were  purchased  by 
investors  with  typically  longer  investment  horizons  (i.e.  fund managers, insurance  companies  and 
pension  funds).  Central  banks/official  institutions  that  usually  prefer  to  invest  in  bonds  with 
maturities  of  up  to  10  years  accounted  for  about  17%  of  syndicated  EU-Bond  issuances,  while 
bank  treasuries  were the single  largest  source  of  demand, making  up  33%  of  syndication  order-
books. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chart 3: Investors in syndicated transactions executed in H1 2025 by country / region 

22%

12%

11%

10%

9%

9%

8%

7%

5%

UK

Iberia

Nordics

France

Italy

Benelux

Germany

Other EU

APAC

2%

2%

Other Europe, non-EU

1%

Middle-East and Africa

Americas

EU-Bonds issued via syndications have attracted more than 1,900 different investors from over 70 
different countries since the start of NextGenerationEU in 2021. In the first half of 2025, over 66% 
of investment in EU-Bond syndications has come from investors located in the EU, and over 22% 
has  come  from  international  investors  operating  from  the  UK.  The  remainder  has  come  from 
international investors in Asia or other non-EU European countries like Norway and Switzerland. 

Despite  the  turbulent  market  environment  caused  by  uncertainty  in  global  trade  policy,  the  new 
issue premium (NIPs)12, demanded by investors as a concession when the EU issues bonds through 
syndication, remained subdued in the first half of 2025 with an average of around 1.6 basis points. 
This was in line with the average new issue premium of 1.65 basis points in 2024 and with those 
of other issuers on comparable transactions (measured by size and maturity).  

At the same time, the secondary market liquidity of EU-Bonds remained strong, supported by the 
quoting  arrangements  in  place  since  November  2023.  Under  those  arrangements,  EU  primary 
dealers  are  encouraged  to  post  reliable  EU-Bond  prices  on  the  leading  electronic  bond  trading 
platforms.  Since  those  quoting  arrangements  were  introduced,  the  daily  trading  volumes  of  EU-
Bonds  on  the  main  electronic  trading  platform  have  averaged  about  EUR  767  million  with  daily 
peaks in excess of EUR 2 billion. In H1 2025, this average was slightly lower with a daily average 
turnover of EUR 643 million reflecting the more volatile investment backdrop. 

The Commission also supported the liquidity of the EU-Bond curve by tapping existing lines, while 
also creating new ones to meet programme needs and investor demand. As a result, the average 
amount outstanding per EU-Bond stood at around EUR 16 billion at the end of H1 2025, up from 
EUR 14.8 billion at the end of 2024. New 3, 10 and 7-year lines were also launched in the first half 
of 2025. 

12 The NIP is a premium that the issuer pays in order to persuade investors to buy its bonds in the primary 

market rather than in the secondary market.  

8 

 
 
 
 
 
Chart  4:  Quarterly  secondary  market  turnover  of  EU-Bonds  and  European  government 
bonds (% of outstanding volume) 

Source: European Commission, based on  data from the Economic and Financial C        ’  Subcommittee 
on EU Sovereign Debt Markets (ESDM).  
Note:  In  this  chart  the  European  government  bond  (EGB)  market  comprises  bonds  issued  by  euro-area 
sovereigns,  the  European  Financial  Stability  Fund  and  the  European  Stability  Mechanism.  Data  are  not  yet 
available for Q1 2025 and Q2 2025. 

4. Cost of funding and liquidity management costs 

COST OF FUNDING 

The cost allocation methodology under the diversified funding strategy allows the Commission to 
link  the  costs  of  funding  charged  to  beneficiaries  (the  EU  budget  or  loan  beneficiaries)  to  the 
conditions  obtained  in  the  market  when  the  disbursements  were  financed13.  In  addition,  this 
methodology  allows  borrowing  costs  to  be  allocated  on  a  programme-related  basis.  This  reflects 
the increased number of policy programmes funded by the diversified funding strategy under the 
unified funding approach.   

In line with this methodology, the cost of funding for NextGenerationEU payments in the January to 
June  2025  time  compartment  (‘TC8’                       )  is  estimated  at  3.17%,  compared  with 

13 For NextGenerationEU, the interest costs incurred are allocated to the EU budget and to the Member States 
receiving  loans  in  accordance  with  the  methodology  set  out  in  Commission  Implementing  Decision  (EU) 
2021/1095  and  its  successors  Commission  Implementing  Decision  (EU)  2022/9701  and  Commission 
Implementing  Decision  (EU)  2024/1974.  This  methodology  distinguishes  between  three  different  cost 
categories: (i) the cost of funding to finance non-reimbursable support and loan disbursements calculated 
for six-monthly time compartments, (ii) the cost of holding and managing liquidity, and (iii) administrative 
costs.  Compartmentalisation  per  programme  has  been  possible  since  Commission  Implementing  Decision 
(EU,  Euratom)  2024/1974  entered  into  force  in  the  second  half  of  2024.  To  avoid  any  retroactive  effect, 
programmes  that  were  funded  and  disbursed  before  this  methodology  was  implemented  (such  as  MFA+ 
loans  to  Ukraine  and  exceptional  bridge-financing  under  the  Ukraine  Facility)  remain  pooled  with 
NextGenerationEU borrowing and lending operations under the unified funding approach. 

9 

0%10%20%30%40%50%60%70%80%90%100%12341234123412341234120202021202220232024EU marketEGB market* (average) 
 
 
 
2.99%  for  the  previous  six-monthly  time  compartment.  The  cost  of  funding  for  disbursements 
under the Ukraine Facility, the MFA Egypt programme and the Western Balkans Reform and Growth 
Facility was between 2.70% and 2.80% at the end of June 2025. The cost of funding for the MFA 
loan to Ukraine as part of the G7 ERA initiative stood at 2.53%.  

Differences  in  the  funding  costs  between  programme  compartments  reflect  the  programme 
characteristics, such as differences in the average maturities of borrowing instruments14.  

Chart 5: Cost of funding 

NextGenerationEU 

TC1 

TC2 

TC3 

TC4 

TC5 

TC6 

TC7 

TC8 

0.15%  1.38%  2.61%  3.22%  3.53%  3.19%  2.99%  3.17% 

Ukraine Facility 

2.72% 

MFA+ 

3.16% 

MFA Ukraine (G7 ERA) 

2.53% 

MFA Egypt 

Western Balkans (CP1) 

Reform and Growth Facility for Moldova 

2.70% 

2.77% 

2.89% 

Changes in the cost of funding also reflect the prevailing market conditions, which impact the cost 
of  borrowing  for  EU  issuances.  Over  the  course  of  the  first  six  months  of  2025,  interest  rates 
exhibited  significant  volatility  as  a  result  of  economic  and  financial  uncertainties  affecting  all 
issuers. As a result, the interest rate on 10-year EU-Bonds varied between 2.8% and 3.3% during 
the  semester,  before  ending  the  semester  at  2.95%,  compared  to  2.93%  at the  start  of  January 
2025.  At  the  same  time,  yield  spreads  between  the  EU  and  most  EGB  issuers  tightened  slightly, 
with  the  10-year  interest  rate  spread  between  EU-Bonds  and  a  50/50  basket  of  German/French 
sovereign bonds  falling  from around 13 basis points at the start  of the year to  5 basis points in 
June 2025.  

14  For  instance,  NextGenerationEU  currently  has  a  longer  average  maturity  of  funding  compared  to  other 
programmes,                                                          ‘              ’           that  covers 
NextGenerationEU’   repayment  profile.  In  order  to  allow  budgetary  assets  that  will  be  used  to  repay 
NextGenerationEU grants to be spread smoothly over time, the bonds issued to finance  NextGenerationEU 
grants typically have a longer maturity. 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chart 6: Yields on 10-year EU-Bonds 

3,40

3,30

3,20

3,10

3,00

2,90

2,80

2,70

2,60

2,50

02-01-25

02-02-25

02-03-25

02-04-25

02-05-25

02-06-25

LIQUIDITY MANAGEMENT COSTS 

Over  the  first  half  of  2025,  the  average  level  of  liquidity  holdings  stood  at  EUR  71.1  billion, 
compared  to  EUR 50.7  billion  in  the  second  half  of  2024.  This  was  primarily  due  to  delays  in 
NextGenerationEU  disbursements  compared  to  forecasts.  In  particular,  disbursement  outflows  of 
close to EUR 45 billion forecast for the end of the first half of 2025 were delayed to later in the 
summer. Other programmes also saw some slight delays compared to forecasts.  

The  substantial  increase  in  liquidity  holdings  is  explained  by  the  need  to  maintain  high  overall 
borrowing  given  the  large  amount  of  funds  still  to  be  disbursed  under  the  NextGenerationEU 
programme  between  now and  the  end  of  202615. Given  the  sizeable  amounts of  funding  needed 
over  the  final  year  of  NextGenerationEU  implementation,  it  is  essential  that  the  Commission 
continues its borrowing operations on a regular and predictable schedule to ensure the best market 
conditions and safeguard predictability for investors. 

Whereas in previous years these cash balances generated a profit, the change in the interest rate 
environment has meant that these cash balances have started to generate a net cost. Indeed, the 
rapid changes in monetary policy rates and the  steepening of the yield curves across the market 
have increased the costs of these liquidity holdings.  

In  order  to  maximise  the  return  from  investing  these  cash  balances  in  the  short-term,  the 
Commission undertook extensive liquidity management operations, using term deposits and reverse 
repurchase (repo) transactions to invest around 50-60% of the cash balances on average over the 
first  six  months  of  2025.  These  short-term  investments  helped  reduce  the  negative  carry 
associated with the cash balance invested by up to 20 to 25 basis points. Overall, the net indicative 
liquidity  management  cost  for  first  half  of  2025  is  estimated  at  around  EUR  195  million16 
compared to an income of EUR 140 million on liquidity holdings in 2024. 

15 See COM(2025) 310 final. 
16 Parts of the short-term investment operations are maturing in H2 2025. In accordance with standards, the 
around EUR 195 million is presented without taking into consideration remuneration that would have been 

11 

 
 
 
 
 
5. Steps to further develop the EU-Bond market 

The implementation of quoting arrangements at the end of 2023 and the launch of a repo facility 
in October 2024 improved the resilience, depth and liquidity of the  EU Bond market. In H1 2025, 
the  Commission  continued  to  invest  in  the  deepening  of  the  EU  bond  market.  Following  the 
reinforcement of the EU-Bill programme with a 12-month line added in January 2025 (in addition 
to  the  existing  3-  and  6-month  maturities)  and  the  new  format  of  three-leg  EU-Bond  auctions 
introduced  in  March  2025,  work  has  turned  to  the  introduction  of  non-competitive  auction 
allocations. 

The  introduction  of  non-competitive  auction  allocations  will  allow  the  Commission  to  offer  its 
primary  dealers,  additional  amounts  of  auctioned  bonds  (20%  of  the  initially  allocated  auction 
volume)  on  the  day  after  the  bond  auction.  This  new  feature  is  used  by  many  sovereign  auction 
programmes to give their primary dealers an incentive to  participate in auctions and attract more 
investor interest. Preparatory work with relevant stakeholders is currently underway with the aim of 
launching the non-competitive offers as of autumn 2025.  

At the same time, independent initiatives from market stakeholders continued. Following the launch 
of  the  ICE  index-based  futures  contract  in  December  2024,  EUREX  announced  the  launch  of 
physically  delivered  EU-Bond  futures  contracts  in  September  2025.  A  well-functioning  futures 
market can help market participants to price EU-Bonds and hedge open positions. It is therefore a 
further  potentially  valuable  support  to  the  functioning  of  the  EU-Bond  market  and  to  the  role  of 
EU-Bonds as liquid safe assets. While the Commission has no direct role in or responsibility for the 
operation  of  futures  contracts,  it  welcomes  these  independent  initiatives  as  recognition  of  the 
importance to investors of the rapidly maturing market for EU-Bonds. 

6. Other milestones in the first half of 2025 

SECURITY  ACTION  FOR  EUROPE  (SAFE):  A  NEW  EU  FINANCIAL  INSTRUMENT  TO  BE 
FINANCED BY EU BORROWING  

On  27  May  2025,  the  Council  adopted  a  Regulation17  establishing  a  new  financial  instrument  to 
help  Member  States  accelerate  the  procurement  of  defence  capabilities  -  the  Security  Action  for 
Europe (SAFE). Under this instrument the Commission is mandated to issue up to EUR 150 billion of 
additional  funding  until  the  end  of  2030.  The  proceeds  will  be  transferred  to  Member  States  as 
loans to finance the procurement of important defence capabilities. 

Member States have until the end of November 2025 to submit their loan requests. The size of the 
loans and any pre-financing (which can be up to 15% of the loan) will be set out in implementing 
decisions, on the basis of which disbursements under the new instrument will be made. 

The  extended  time  frame  of  SAFE  (to  the  end  of  2030)  and  the  demand-driven  nature  of 
disbursements  mean  that  the  Commission  will  be  able  to  mobilise  the  funds  smoothly  and  as 
needed  with  short-term  and  long-term  funding  across  the  yield  curve.  As  the  funding  will  be 
integrated                ’   unified  funding  approach,  disbursements  will  be  financed  by 
competitively priced long-maturity EU-Bonds and will be repaid by the beneficiary Member States.  

earned  on  these  holdings.  On  an  accrual  basis,  the  net  liquidity  management  cost  for  H1  2025  would  be 
reduced to approximately EUR 160 million. 

17  Council  Regulation  (EU)  2025/1106  of  27  May  2025  establishing  the  Security  Action  for  Europe  (SAFE) 

through the Reinforcement of the European Defence Industry Instrument. 

12 

 
 
 
Funding  of  the  SAFE  loans  is  expected  to  start  in  2026,  once  Member  State ’  plans  and  loan 
agreements have been approved. All issuances for the financing of SAFE loans will take place under 
the single branded ‘EU-Bonds’. 

7. Issuance outlook for the second half of 2025 

The  Commission  continued  to  implement  a  regular,  predictable  and  large-volume  funding  plan 
throughout the first half of 2025 against a backdrop of volatile markets. Having raised EUR 85.8 
billion  of  long-term  funding  in  the  form  of  EU-Bonds  since  January  2025,  the  Commission  has 
completed  its  funding  plan  for  H1  2025  in  line  with  its  published  timetable  and  market 
expectations.  The  proceeds  have  been  used  to  finance  a  diverse  range  of  EU  policies,  including 
NextGenerationEU,  financial  assistance  to  Ukraine,  and  programmes  for  enlargement  candidates 
and non-EU countries. 

EU  issuance  continued  to  meet  with  strong  investor  demand  as  reflected  in  the  order  books  for 
syndications and steady, consistent support for EU-Bill and EU-Bond auctions. This is testament to 
the  security  and  liquidity  that  EU-Bonds  offer  to  European  and  global  investors  seeking  good 
investment opportunities in highly-rated euro denominated securities.  

On  23  June  2025,  the  Commission  announced  its  intention  to  issue  up  to  EUR  70  billion  in  EU-
Bonds in the second half of 2025. The funding plan builds on the funding plan of EUR 90 billion for 
the  first  half  of  2025  and  is in  line  with  the previously  communicated  expected  annual  issuance 
volumes of around EUR 160 billion for 2025. 

This  target  would  constitute  an  annual  issuance  record  for  the  EU-Bond  programme,  building  on 
previous years (from EUR 120 billion in 2023 to EUR 140 billion in 2024) and reflecting the funding 
needs over the next two years, including almost EUR 335 billion of RRF funds over the remaining 
lifetime of that programme. In its Communication of 4 June 202518, the Commission describes the 
progress  made  with  the  implementation  of  national  recovery  and  resilience  plans  and  calls  on 
Member States to speed up their implementation. In addition, the proceeds will be used to provide 
financial  assistance  to  Ukraine,  enlargement  candidates  and  non-EU  countries,  and  to  roll  over 
maturing bonds.  

Amounts  raised  by  EU-Bonds  will  be  supplemented  by  short-term  funding  through  EU-Bills. 
NextGenerationEU Green Bond issuances (currently standing at EUR 75.1 billion) will remain closely 
calibrated to  reported  green  expenditure  from  Member  States,  financing  the green  component  of 
the RRF. Further NextGenerationEU Green Bond issuance will be conditional on the notification and 
validation  of  additional  climate-relevant  expenditure  by  Member  States  under  their  national 
recovery and resilience plans.  

18 See NextGenerationEU - The road to 2026 

13 

 
 
 
 
 
Annex: Implementation indicators on the use of the means for delivering against the C mm      ’   ver rch     e  -management strategy’  
efficiency and effectiveness objectives 

Implementation 
of the EU-Bond 
programme 

Means 

Indicator 

Value in H1 2025 (unless 
indicated otherwise) 

Commentary on execution in H2 2024 

a)  Regular issuances across the curve 
Regular EU-Bond (and NextGenerationEU 
Green Bond) issuances in all maturities 
across the curve (up to 30 years) to 
provide different types of investors with 
investment opportunities as a way of 
maintaining strong investor demand and 
with it the flexibility to determine 
issuance volumes and maturities for 
individual transactions based on market 
conditions. 

i.  Maturity split of 

issuance programme 

1-4 years: 21% 
4-8 years: 21%  
8-12 years: 19% 
12-17 years: 10% 
17-23 years: 12% 
23-31 years: 17% 

ii.  Timely distribution of 

issuances 

iii.  Green issuances19 

Six syndications and seven 
bond auctions, resulting in at 
least two issuances per month. 

EUR 6.9 billion, by tapping EU 
2033 and EU 2050 bonds. 

In  H1  2025,  the  Commission  pursued  its  objective  through 
regular  bond  issuances  across  different  tenors  to  provide 
the  EU  curve  with  liquidity  on  all  segments.  Funding 
transactions  were  spread  over  the  six-month  period  to 
ensure  a regular  presence  in  the  market.  There  were  more 
transactions  than  in  H2  2024,  as  the  H1  2025  funding 
target of up to EUR 90 billion was higher than the H2 2024 
funding target of EUR 65 billion. 

Green bond issuance was slightly lower than in the second 
half  of  2024,  reflecting  the  cumulative  reported  green 
expenditures  by  Member  States,  and  the  appropriate 
calibration of green bond issuances to these expenditures.  

b)  Achieving a proper balance of 
auctions and syndications 

i.  Auction / syndication 

split as %  

41% of bond issuances via 
auction.  

In  H1  2025,  the  Commission  issued  41%  of  the  EU-Bonds 
via auction, slightly below the proportion in H2 2024 (42%). 

Use of different funding techniques with 
a proper balance, depending on total 
issuance volumes and market conditions, 
in order to manage execution risks, 
improve secondary market liquidity and 
improve borrowing costs. 
c)  Establishment of large and liquid 

benchmark bonds 

Tapping of EU-Bonds to bring the 
outstanding volume of different lines to 
levels commensurate with large and 
liquid benchmark lines. 

i.  Issuances via new 

bonds vs volume issued 
via taps 

• 

• 

EUR 22 billion via new 
bonds  
EUR 64 billion via taps 

ii.  Speed of tapping of new 

Approximately three months 

In  order  to  support  the  liquidity  of  EU  securities,  the 
Commission used its transactions to tap existing funding lines, 
with approximately 75% of  the funding volume mobilised via 
taps. 

bonds20 

iii.  Average size of 

outstanding bonds21 

Around EUR 16 billion 

New funding lines were launched to provide the market with 
new benchmark lines where needed on the curve and based 
on  the  recommendations  of  EU  primary  dealers.  New  3-

19 Additional information on NextGenerationEU Green Bonds: NextGenerationEU Green Bond Dashboard 
20 Based on the average number of months between new issuance and first tap when considering the new lines tapped during H1 2025. 

14 

 
 
 
 
 
 
Means 

Indicator 

iv.  Turnover relative to 
issuance volume 

v.  Absolute turnover 

Value in H1 2025 (unless 
indicated otherwise) 

Commentary on execution in H2 2024 

Approximately 174% in H1 
2025 vs 155% in H2 2024 

year, 10-year, and 20-year bonds were launched in the first 
half of 2025.  

EUR 1154 billion in H1 2025 vs 
EUR 894 billion in H2 2024 

d)  Management of the maturity profile 

i.  Average maturity of 

Around 12 years  

of EU-Bond issuances with due regard 
to: 

•  the temporary additional headroom 

(for NextGenerationEU-related 
borrowing) and permanent 
headroom (for MFA+) under the EU 
budget 

•  the future redemption of 

disbursements in any given year  

•  stable future roll-over needs 
•                            ’         

to ensure low borrowing costs in the 
long run and strong demand from 
its core investor base. 

issuance  

ii.  Average time to 

Around 11 years 

maturity of outstanding 
debt 

iii.  Refinancing in the short 
term, i.e. percentage of 
outstanding stock of 
bonds and bills 
maturing in the next 12 
months 

iv.  Refinancing in the medium 
term, i.e. percentage of 
outstanding stock of 
bonds and bills maturing 
in the next five years 

Less than 10% 

Less than 37%. 

Implementation 
of the EU-Bill- 
programme 

Liquidity 
management 

Regular issuance of EU-Bills with 
maturities of up to 1 year via auction to 
attract additional investors (or additional 
portfolios of existing investors) and 
support liquidity management. 

Management of a liquidity pool based on 
payment obligations, disbursement 
needs and the costs of cash holding, 
with due regard to prevailing market 
conditions. 

i.  Outstanding volume of 

Around EUR 30 billion 

EU-Bills 

ii.  Number of EU-Bill 

12 

auctions 

i.  Number of payment 

None 

failures due to lack of 
liquidity 

As  a  result,  the  average  outstanding  amount  per  bond 
increased to around EUR 16 billion by the end of June 2025, 
ensuring consistent liquidity of the bonds. 

In H1 2025, EU-Bond issuances had an average maturity of 
12  years.  This  reflects  the  need  to  spread  the  redemption 
profile  over  time  while,  at  the  same  time,  attracting 
investors  to  EU  primary  market  transactions.  The  average 
maturity  remained  below  the  maximum  average  maturity 
of  17  years  set  out  in  the  annual  borrowing  decision  for 
2025. 

The weighted average time to maturity of outstanding debt 
declined  slightly  (to  around  11  years  after  moving  below 
the 11.5 years mark) driven by the issuance profile and roll 
down of existing debt. 

Refinancing  also  remained  stable,  reflecting  the  past 
issuances and the redemption profile. 

Outstanding  debt  under  the  EU-Bill  programme  increased 
from  around  EUR  25  billion  to  around  EUR  30  billion  over 
the period as part of the development of the programme to 
provide additional liquidity when needed. This also included 
the introduction of a new 12-month EU-Bill line.  

The  Commission  met  all  disbursement  needs  and  there 
were no settlement failures during the second half of 2024. 

Primary dealer 

Attracting  a  wide  range  of  financial 

i.  Number of institutions 

19 (compared with 18 in 

EU  primary  dealers  continued  to  support  the  Commission 

21 Outstanding bonds over number of bonds as at the end of H2 2024, based on bonds issued under the diversified funding strategy. 

15 

 
 
 
 
 
 
 
Commentary on execution in H2 2024 

and rotation at the syndications helped the Commission to 
make the best use of all the banks eligible to be part of a 
syndicate. 

The  Commission  maintained 
regular  and  predictable 
communication  with  the  markets,  in  line  with  previous 
announcements.  

During the first half of 2025 a reduced allocation of around 
EUR  4  billion  occurred  due  to  the  securing  of  attractive 
financing conditions in the bond auctions. 

The Commission regularly published investor  statistics, and 
its diversified investor base continued to increase. 

Means 

Indicator 

network 

institutions with a strong commitment to 
supporting EU issuances. 

Communication 
with diverse 
market 
stakeholders and 
peer issuers  

Maintaining and building the trust of the 
investor base, market participants and 
peer issuers to support demand for EU 
                       ’  
understanding of market dynamics and 
investor needs. 

that signed underwriting 
commitments for 
transactions over the 
past six months 

i.  Deviations from the pre-
announced timings for 
the publication of 
funding plans  

Value in H1 2025 (unless 
indicated otherwise) 

H2 2024) 

None 

ii.  Deviation from the 

volumes announced in 
the funding plan  

Around EUR 4 billion or less 
than 5% (compared with less 
than 2% in H2 2024). 

iii.  Investor distribution 

statistics 

Per type:  
central banks/official 
institutions 17%, fund 
managers 24%, bank 
treasuries 33%, insurance and 
pension funds 17%, banks 8%, 
hedge funds 2%  
Per country / region: UK 22%, 
Nordics 11%, France 10%, 
Benelux 9%, Italy 9%, Asia-
Pacific 5%, Germany 8%, Iberia 
12%, other EU 7%, other 
Europe, non-EU 2%, Americas 
1%, Middle East and Africa 2% 

16