(Bloomberg) -- Germany’s Finance Agency supports the European Union’s attempt to reclassify the bloc’s debt as that of a sovereign issuer in order to gain access to important indexes.
“We have an interest in the EU financing itself as cheaply as possible, because the EU’s costs are also the costs of the member states. So we support and approve of what our colleagues in Luxembourg do,” Tammo Diemer, co-director of the German Finance Agency, said at a press conference on Tuesday. The agency manages the debt of Europe’s largest economy.
However, Diemer added, it is ultimately up to markets to decide whether a bond segment is considered a government bond or not. The Finance Agency chief hopes that the EU continues to establish requirements so that its bonds can take the steps necessary to qualify for that classification.
The EU is pushing for its bonds to be regarded as government debt in order to access a wider pool of investors. The bloc is currently treated as a supranational issuer by index companies, which the EU cites as a key reason why its borrowing costs are higher than those of European governments with similar ratings.
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