National Bank to play a key role in funding NextGenerationEU
The National Bank is to support the European Commission in funding the important NextGenerationEU recovery plan. The Commission has decided to call on the NBB’s market infrastructure and expertise for issuance of the massive package of bonds worth over € 800 billion.
During the coronavirus crisis the European Commission decided to support the Member States with an extensive recovery package to make the Union greener, healthier, more digital and more resilient. The package is called NextGenerationEU and will be funded by resources made available by the issuance of debt securities with a maturity of three months to thirty years. Altogether the investment programme amounts to over € 800 billion.
The European Commission decided to call on the European Central Bank and the National Bank of Belgium for the issuance of these bonds. While the ECB will act as the payment bank the NBB will arrange the issuance of the bonds through its securities settlement system.
The NBB is one of the few Eurosystem central banks to have developed a securities issuance and settlement system. The NBB Payments and Securities Service has many years of experience in this activity, plus extensive human and technological expertise. For example, since as long ago as 1991 the Service has processed the securities of the Belgian Debt Agency and of many Belgian and foreign issuers. This collaboration was preceded by a formal selection procedure in which the NBB was nominated as the chosen partner.
The partnership with the Commission is a great boost for an important National Bank activity which the general public knows little about. We have a very efficient Financial Markets Department and today offers further proof of that.
The declaration of intent which will lead to the partnership agreement was signed this morning by EU Commissioner Johannes Hahn (Budget & Administration), ECB Executive Board member Fabio Panetta, and the NBB Governor Pierre Wunsch.
Following the necessary technical and legal preparations, the intention is to launch the partnership by the summer of 2023.
In the future, the Commission may also call on the NBB for the issuance of other financial plans, such as the RePowerEU programme intended to make Europe less dependent on Russian oil and gas.
NBB Governor Pierre Wunsch: “The partnership with the Commission is a great boost for an important National Bank activity which the general public knows little about. We have a very efficient Financial Markets Department and today offers further proof of that.”
