BETA


2022/0370(COD) Establishment of a diversified funding strategy as a general borrowing method

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead BUDG
Committee Opinion CONT
Lead committee dossier:
Legal Basis:
Euratom Treaty A 106a-pa, RoP 163, TFEU 322-p1

Events

2022/12/13
   Final act published in Official Journal
2022/12/06
   CSL - Draft final act
Documents
2022/12/06
   EP/CSL - Act adopted by Council after Parliament's 1st reading
2022/12/06
   CSL - Final act signed
2022/11/24
   EP - Decision by Parliament, 1st reading
Details

The European Parliament adopted by 500 votes to 41, with 27 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU, Euratom) 2018/1046 as regards the establishment of a diversified funding strategy as a general borrowing method.

Parliament adopted its position at first reading under the ordinary legislative procedure by taking over the Commission proposal.

Financing individual programmes of financial assistance through separate funding methods creates cost and complexity as different programmes of financial assistance compete for a limited number of funding opportunities.

The proposal inserts a new Article 220a in the Financial Regulation to establish the diversified funding strategy as a single funding method. The implementation of the diversified financing strategy will require the application of a single set of rules for all borrowing and lending programmes under it.

The need for a single financing approach is of particular importance in the context of financial support to Ukraine due to its urgent financing needs. Recent experience with the funding needs for Ukraine has highlighted the disadvantages of a fragmented approach to the organisation of the Union’s debt. In order to strengthen the Union’s position as an issuer of euro-denominated debt, it is of paramount importance that all new issuance be organised through a single funding method.

The diversified funding strategy should be implemented through all necessary transactions aiming at a regular capital market presence. It should be based on pooling of funding instruments and shall make use of a common liquidity pool.

Documents
2022/11/23
   EP - Debate in Parliament
2022/11/22
   CofA - Court of Auditors: opinion, report
2022/11/21
   EP - Committee referral announced in Parliament, 1st reading
2022/11/15
   EP - Decision by committee, without report
2022/11/09
   EC - Legislative proposal published
Details

PURPOSE: to establish the diversified funding strategy as a general borrowing method.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: Article 220 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (Financial Regulation) currently provides that the Commission borrows on behalf of the Union or Euratom to on-lend the corresponding amounts to beneficiary Member States or third countries under the conditions applicable to the borrowings. In this regard, the cash flows between the borrowed funds and the loans are matched one-to-one. This means that the Union must carry out market operations based on disbursement needs for each specific case of lending, which limits the possibility to plan coherently various borrowing operations and structure maturities to achieve the best costs.

The funding needs for Ukraine require mobilisation and disbursement in a cost-effective flexible and financially sound manner, integrating all funding needs including for NextGenerationEU.

The diversified financing strategy has successfully mobilised funds for grants and loans under Regulation (EU) 2021/241 of the European Parliament and of the Council establishing the Recovery and Resilience Facility and a range of other EU programmes. In view of the expected complexity of operations needed to satisfy the urgent financial needs of Ukraine, and to anticipate possible future borrowing and lending operations, it is appropriate to establish a diversified funding strategy as the single funding method for implementation of borrowing operations.

CONTENT: the proposal inserts a new Article 220a in the Financial Regulation to establish the diversified funding strategy as a single financing method . The implementation of the diversified funding strategy would require the application of a single set of rules for all borrowing and lending programmes under it.

The diversified funding strategy will be implemented through all necessary transactions aiming at a regular capital market presence, and will be based on pooling of funding instruments and shall make use of a common liquidity pool.

The Commission will make the necessary arrangements for the implementation of the diversified funding strategy. It will inform the European Parliament and the Council regularly and comprehensively on all aspects of its debt issuance and management strategy.

The regulation will only apply to the new financial assistance for which the basic acts enter into force on or after 9 November 2022.

Documents

History

(these mark the time of scraping, not the official date of the change)

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2022-12-13T00:00:00
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Final act published in Official Journal
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Regulation 2022/2434
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2022-11-09T00:00:00
docs
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Legislative proposal
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EC
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date
2022-11-09T00:00:00
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EC
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date
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type
Final act signed
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European Court of Auditors
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date
2022-12-06T00:00:00
docs
title: 00062/2022/LEX
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body
CSL
docs/0
date
2022-11-22T00:00:00
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type
Court of Auditors: opinion, report
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CofA
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date
2022-11-22T00:00:00
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type
Text adopted by Parliament, 1st reading/single reading
body
EP
events/3/summary
  • The European Parliament adopted by 500 votes to 41, with 27 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU, Euratom) 2018/1046 as regards the establishment of a diversified funding strategy as a general borrowing method.
  • Parliament adopted its position at first reading under the ordinary legislative procedure by taking over the Commission proposal.
  • Financing individual programmes of financial assistance through separate funding methods creates cost and complexity as different programmes of financial assistance compete for a limited number of funding opportunities.
  • The proposal inserts a new Article 220a in the Financial Regulation to establish the diversified funding strategy as a single funding method. The implementation of the diversified financing strategy will require the application of a single set of rules for all borrowing and lending programmes under it.
  • The need for a single financing approach is of particular importance in the context of financial support to Ukraine due to its urgent financing needs. Recent experience with the funding needs for Ukraine has highlighted the disadvantages of a fragmented approach to the organisation of the Union’s debt. In order to strengthen the Union’s position as an issuer of euro-denominated debt, it is of paramount importance that all new issuance be organised through a single funding method.
  • The diversified funding strategy should be implemented through all necessary transactions aiming at a regular capital market presence. It should be based on pooling of funding instruments and shall make use of a common liquidity pool.
docs/0
date
2022-11-22T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/TA-9-2022-0411_EN.html title: T9-0411/2022
type
Text adopted by Parliament, 1st reading/single reading
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EP
docs/0
date
2022-11-09T00:00:00
docs
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Legislative proposal
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EC
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2022-11-22T00:00:00
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Decision by Parliament, 1st reading
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EP
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url: https://www.europarl.europa.eu/doceo/document/TA-9-2022-0411_EN.html title: T9-0411/2022
events/4
date
2022-11-23T00:00:00
type
Debate in Parliament
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EP
docs
url: https://www.europarl.europa.eu/doceo/document/CRE-9-2022-11-23-TOC_EN.html title: Debate in Parliament
forecasts
  • date: 2022-11-24T00:00:00 title: Vote in plenary scheduled
procedure/stage_reached
Old
Awaiting Parliament's position in 1st reading
New
Awaiting Council's 1st reading position
events/0/summary
  • PURPOSE: to establish the diversified funding strategy as a general borrowing method.
  • PROPOSED ACT: Regulation of the European Parliament and of the Council.
  • ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.
  • BACKGROUND: Article 220 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (Financial Regulation) currently provides that the Commission borrows on behalf of the Union or Euratom to on-lend the corresponding amounts to beneficiary Member States or third countries under the conditions applicable to the borrowings. In this regard, the cash flows between the borrowed funds and the loans are matched one-to-one. This means that the Union must carry out market operations based on disbursement needs for each specific case of lending, which limits the possibility to plan coherently various borrowing operations and structure maturities to achieve the best costs.
  • The funding needs for Ukraine require mobilisation and disbursement in a cost-effective flexible and financially sound manner, integrating all funding needs including for NextGenerationEU.
  • The diversified financing strategy has successfully mobilised funds for grants and loans under Regulation (EU) 2021/241 of the European Parliament and of the Council establishing the Recovery and Resilience Facility and a range of other EU programmes. In view of the expected complexity of operations needed to satisfy the urgent financial needs of Ukraine, and to anticipate possible future borrowing and lending operations, it is appropriate to establish a diversified funding strategy as the single funding method for implementation of borrowing operations.
  • CONTENT: the proposal inserts a new Article 220a in the Financial Regulation to establish the diversified funding strategy as a single financing method . The implementation of the diversified funding strategy would require the application of a single set of rules for all borrowing and lending programmes under it.
  • The diversified funding strategy will be implemented through all necessary transactions aiming at a regular capital market presence, and will be based on pooling of funding instruments and shall make use of a common liquidity pool.
  • The Commission will make the necessary arrangements for the implementation of the diversified funding strategy. It will inform the European Parliament and the Council regularly and comprehensively on all aspects of its debt issuance and management strategy.
  • The regulation will only apply to the new financial assistance for which the basic acts enter into force on or after 9 November 2022.
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