EU raises first 20bn euros on markets for Covid recovery fund

The EU on Tuesday said it had raised its first 20 billion euros ($24 billion) on the markets for its mammoth recovery fund to help the bloc bounce back from the Covid pandemic. 

"Today we have successfully conducted the first issuance operation for Next Generation EU. The (European) Commission has just raised 20 billion euros on the capital markets by issuing a 10-year bond," Commission President Ursula von der Leyen said.

"This is the largest ever institutional bond issuance in Europe."

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Von der Leyen is set to travel to Portugal this week to start giving the commission's approval to plans submitted by each member state to secure their share of the cash. 

"By the end of this year we expect to have issued around 100 billion in bonds and bills," von der Leyen said, adding that interest on the first issue would be paid at 0.1 percent. 

"This will enable to fund all planned grants and loans for member states this year."

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In the face of the pandemic last year the EU took the historic decision to pool debt to fund the nearly 700-billion-euro recovery package.

The hope is that as European output picks up after a year of Covid and lockdown woes, the fund will herald a rash of spending in insulating buildings, railway transport, electric vehicle charging points and high-speed internet.

Each national plan has had to assign at least 37 percent of funds to measures that better the environment or fight climate change.

Another 20 percent is supposed to finance the transition to a more digital economy.