For 2025, we are planning a total refinancing of 28.5 billion euros, of which 21.5 billion euros is for the European Financial Stability Facility, and 7 billion euros for the European Stability Mechanism. This volume is slightly higher than last year's 26 billion euros due to the higher refinancing requirements. In addition to the long-term bond programme, we also have our bill programme, with which we issue three- and six-month maturities which amounted to 24.6 billion euros last year. We also introduced a new financing instrument in 2024: Euro Commercial Paper – ECP – to cover short-term liquidity requirements even better. In 2024, we issued ECPs totalling around 3.5 billion euros with an average term of three weeks. We also plan to utilise the full range of our financing instruments in 2025 and ensure our presence on the market from very short-term to long-term bonds.

We currently have a total of 271.1 billion euros in outstanding bonds, 192.7 billion from the EFSF and 78.4 billion from the ESM, including 6 billion worth of bonds denominated in US dollars. In addition, we have 8.7 billion euros in outstanding Bills. This puts us on a similar scale to Austria on the bond market.

I believe we have a healthy market. We have moved from the fastest phase of interest rate hikes to interest rate cuts in 2024. Investors are now looking for higher rates. The highly rated bonds from the ESM and EFSF, the EU Commission, and the European Investment Bank (EIB) offer good yields and are very safe and reliable instruments.

The first bonds of this year were successfully issued with large order books. It should also be borne in mind that many issuers completed their issuing activities early last year – we already completed our funding programme in September 2024. Therefore, there are now a significant number of investors waiting for issuers to come to the market soon.

Europe is facing challenges. However, I do not currently see a crisis due to excessive government debt. The markets expect a slight decline in the gross issuance volume in 2025, though a further increase in the net bond issuance volume by the eurozone countries compared to 2024 and 2023. However, such developments will vary from country to country within the eurozone.

We are monitoring this development closely. The fall in the price of German government bonds – and more broadly EFSF and ESM bonds compared to swaps, albeit to a lesser extent – can be explained by the steady increase in the free float of German government bonds due to increased bond issuance by governments, and the expiry of bond purchases by the central bank. We see this as less of a concern for European supranational issuers such as EFSF and ESM, but it is a warning signal for member states with large funding needs. ESM/EFSF have remained favourable versus swaps.

The negative swap spread can be attributed to several factors. In 2022, when monetary policy was tightened, the Eurosystem's bond holdings were still at their peak, which led to a divergence between the higher swap rates and the lower bond yields. By 2024, this has reversed: Monetary policy is in easing mode, which lowers swap rates, while the increasing bond supply pushes bond yields higher. Higher swap spreads can sometimes reflect systemic risk, but that does not seem to be the case this time. We also see no signs of rising redenomination risk.

We were active in the Euro SSA market on the day of Trump's inauguration. It turned out to be one of the largest order books in the history of the EFSF. Investor support for Europe and the euro is strong. For the bond markets, the EU's strategic agenda for the next five years is to strengthen European security and defence, competitiveness and the deepening of the single market. Investors need to keep an eye on the new direction of the EU and the new financial opportunities. We have also seen some interesting shifts in the investor base: In 2024, Asian investors acquired almost a quarter of ESM/EFSF bonds, marking their largest participation since 2011. Interest in EFSF/ESM bonds from central banks around the world has also increased.

Electronic trading in EFSF/ESM bonds has increased over the past ten years: From 40% to 60% of the volume and from 55% to 80% in the number of transactions. This trend emphasises the increasing reliance on electronic platforms for bond trading. I expect artificial intelligence (AI) to play an increasingly important role in bond issuance and investment decisions this year. At the ESM, we are also looking at how AI can be integrated into different areas.

We have gone from billions to trillions in the issuance of European safe assets by the EU Commission, the EIB and both the EFSF and the ESM. One should bear in mind that the ESM is borrowing on the market at more favourable interest rates than 16 of the 20 euro area countries, with financing costs below the GDP-weighted average of euro area financing costs. At the same time, the ESM has a lending capacity of almost 430 billion euros, which continues to grow as the countries that received assistance from the EFSF and ESM during the euro debt crisis continue to repay their loans. Financing via European institutions can help countries consolidate their public finances, create space for investment, and protect themselves from future shocks. Given Europe's strategic agenda, and the analysis in Mario Draghi's and Enrico Letta's reports, European institutions have the potential to do much more. The money is there if the political will is there.