Debt dynamics: Exploring EU borrowing in changing times

In recent years, European Commission borrowing on behalf of the
European Union has changed significantly in both scale and
nature. This is mainly due to the financing of the Support to
mitigate Unemployment Risks in an Emergency (SURE) and
NextGeneration EU (NGEU) instruments introduced in response to
Covid-19.

For the first time, the EU is now faced with its own debt, which
will have to be paid for through the EU budget. When these
programmes were launched, interest rates were at historic lows.
However, they have since risen rapidly, both in absolute terms
and as compared to sovereign borrowers like Germany and
France.

In this episode of The Sound of Economics, Maria Demertzis
invites Grégory Claeys and Conor McCaffrey to discuss the causes
of this rise in EU borrowing costs, as well as its wider
implications on the EU budget, indicated in their latest
paper.

Relevant piece: Claeys, G., C. McCaffrey and L. Welslau (2023)
‘The rising cost of European Union borrowing and what to do about
it’ Policy Brief 12/2023, Bruegel