Lima, September 26, 2024.- Johannes Hahn, Commissioner for Budget and Administration of the European Commission, was on a working visit to Latin America to reaffirm the European Union's (EU) commitment to the region in a context of deepening the relationship, following the agreements of the EU-CELAC summit agreed in July 2023.

The main purpose of this first official visit by Commissioner Hahn, which included Peru, Chile and Brazil, was to present Eurobonds (EU public debt financial instruments), as a suitable and safe investment alternative for Peru, as well as to promote the internationalization of the Euro as a global currency.

In this framework, the Commissioner held meetings today with the President of the Council of Ministers, Mr. Gustavo Adrianzen, the President of the Central Reserve Bank, Mr. Julio Velarde, and with relevant actors from the financial market along with, banking and private sector institutions and associations.

BACKGROUND

The European Union has become a major player in the financial market, issuing highly rated bonds to crowdfund EU policies such as the green and digital economy for the EU's recovery and resilience, as well as externally, providing liquidity support to Ukraine. To this end, the EU issues on average approximately EUR 150 billion per year, which will make the EU one of the largest issuers of euro-denominated financial instruments. With more than 20 years of existence, the euro has become a global, safe, profitable and liquid currency. These advantages make the euro an ideal currency for diversifying a financial portfolio or as a reserve currency.

EU issues benefit from the high credit rating of the European Union.

The European Commission is empowered by EU Treaties to borrow from international capital markets on behalf of the European Union. It is a well-established name in the debt securities markets, with a strong track record of successful bond issues. All EU bond issues executed by the European Commission are denominated exclusively in euro.

The European Commission uses the profits from Eurobond issues to fund EU policy programs. A landmark policy program currently funded by EU-Bonds is the green and digital recovery instrument, NextGenerationEU, under which the EU is expected to raise up to €712 billion (out of a maximum program envelope of €806.9 billion) by 2026.

By issuing up to 30% of all NextGenerationEU funds in the form of green bonds, the Commission expects to become the largest green bond issuer in the world.

The EU also issues EU bonds to finance loans to Ukraine. Under the Ukraine Facility, the EU will raise up to €33 billion in EU bonds between 2024 and 2027 to finance these loans.

The Commission communicates its planned financing volumes to the market through semi-annual financing plans covering the next six months of operations.