Eurobonds for Europe? European Debt Instruments, Their Uses and Prospects

Proposals to establish “Eurobonds” have gained significant attention as part of ongoing negotiations on the EU’s upcoming Multiannual Financial Framework (MFF). However, the Eurobond discussion frequently overlooks that the EU already has a wide range of debt instruments at its disposal. At the end of 2024, joint European debt stood at just over 800 billion euros. Existing agreements alone will cause this figure to rise to some 1.15 trillion euros by 2030. As part of MFF deliberations, Eurobond advocates cite the extensive financing needs for common European tasks as a justification for new debt instruments. Against this backdrop, it is revealing to consider how existing debt instruments are actually used; one can identify four discrete uses of joint European debt:

•  Loans to Member States (MSL): Loans to Member States to fund national expenditures (share of all EU debt by the end of 2030: 57%).
• Grants to Member States (MSG): Non-repayable grants to Member States financed through European borrowing (24% share).
• Financial aid to third countries (TCA): Loans given to third countries (primarily Ukraine at present) (14% share).
• EU programmes in the EU budget (EUP): Joint debt used to finance EU programmes (5% share).

Heinemann, Friedrich and Fabian Moormann (2026), Eurobonds for Europe? European Debt Instruments, Their Uses and Prospects , ZEW policy brief No. 26-11, Mannheim