EU credit strength

The EU is rated AAA/Aaa/AAA/AAA (outlook stable) by Fitch, Moody's, Scope and DBRS and AA+ (outlook stable) by Standard & Poor's.

The EU's ratings are a reflection of the fact that:

• EU borrowing is direct and unconditional obligation of the EU. The EU is legally bound by the Treaty on the Functioning of the EU (Article 323) to service the EU debt.
• The service of EU debt is secured thanks to multiple layers of debt-service protection.
• While different programmes can entail different safeguards, the headroom of the EU budget provides the ultimate guarantee to investors that borrowing will always be repaid.
• Headroom is the difference between the own resources ceiling (i.e. the maximum amount of resources that the Commission can ask Member States to contribute in a given year) and the funds that the Commission actually needs to cover the expenses foreseen by the budget.
• Under NextGenerationEU, the EU has increased the Own Resources Ceiling of its budget by 0.6 percentage points of the EU's Gross National Income (GNI). This provides a sufficiently high ceiling to allow the Union to cover all of its financial obligations and contingent liabilities falling due under this programme in a given year. The increase is limited in time, until 2058, and will expire when all funds will have been repaid and all liabilities will have ceased to exist. The additional headroom will only be used in the context of the recovery from the coronavirus pandemic.
• Repayment of the €18 billion in Macro-Financial Assistance + programme loans to Ukraine and the loans under the Ukraine Facility is guaranteed under the permanent own resources ceiling of the EU budget, which was increased to 1.4% in 2020.
• Programme specific guarantees can include additional Member State guarantees, such as those for the now closed SURE programme.

Further details about the EU as an issuer are available in the Investor Presentation.