The European Commission is considering proposing a new joint debt mechanism that would allow it to access capital markets during crises and establish a permanent framework for issuing bonds denominated in euros, the Financial Times reported on Thursday, citing three people familiar with the matter.
According to the report, the proposal is still in draft stage, and it introduces an emergency mechanism that would allow debt to be raised to fund grants or loans to European Union member states in a crisis. The proposed mechanism will reportedly be included in the EU's 2028 multiannual budget plan, which is set to be presented later this month.
The report also stated that most countries that are net contributors, investing more into the budget than they draw from it, are resistant to increasing their investments, especially after the NATO leaders recently decided to raise defense-related spending to 5% of GDP.
