Donald Trump has become Brussels’ unwitting face for EU-issued bonds, Politico reports. Not because the U.S. president is a fan of the EU, but because his trade tariffs and chaotic foreign policy, ranging from threats to annex Greenland to waging war in the Middle East, are making scared investors buy more EU debt.
This is good news for the European Commission, as it ramps up its planned debt issuance to take on new tasks such as defense spending and supporting Ukraine’s resistance to a Russian invasion. Brussels’s marketing slogan is this: Slow, consensus-based EU decision-making is a bastion of stability in a Trumpian world that is upending the global order. You can take advantage of that stability by investing in Eurobonds.
The idea works. POLITICO notes that money managers from the UK, Asia, the Middle East, Africa and Oceania have snapped up 43% of the Eurobonds the Commission has auctioned since the start of 2026. That’s an 8% increase on the average over the past six years, putting EU Budget Commissioner Piotr Serafin in a favorable position ahead of the sale of Eurobonds to investors based in Hong Kong, Malaysia and Singapore this month. The European Commission has issued €52 billion worth of bonds since the start of 2026, compared with €44 billion in the same period in 2025.
"There is a growing demand for "Europe" to align itself with the international order and rules-based values. And hence the demand for EU bonds," a senior EU official said. The eurozone bailout fund and its predecessors, the European Stability Mechanism and the European Financial Stabilisation Mechanism, are facing a similar trend. They have jointly issued €566 billion since 2010 and are selling record levels of debt to non-EU countries in 2025.
Since the US and Israel began bombing Iran in late February, central banks, governments and international investors have sold more than $80 billion worth of US government securities net. Across the Atlantic, the EU is using the events to bolster its reputation as a safe haven for worried foreign investors. "EU leaders are insisting that Europe is predictable in its policies, and in today's global geopolitical environment, that's something that many investors and market participants will notice," said Ken Egan of credit ratings agency KBRA.
The U.S. bond sell-off is far from a mass exodus. The market for U.S. government bonds is worth about $31 trillion, while the market for bonds issued by the European Commission is barely €1 trillion. But the growing demand for these Eurobonds, combined with a solid credit rating, allows the EC to borrow at a lower cost than many indebted EU governments. In a sign of growing market confidence, the additional yield on the Commission’s bonds over German government bonds – long considered the safest in the eurozone – has narrowed to around 40 basis points. That’s significantly less than the 70 basis points it would have in 2022. A basis point is one hundredth of a percentage point.
Meanwhile, US government bonds offer investors a premium of more than 130 basis points. Of course, there are more factors at play than concerns about Trump’s policies. Some investors buy EU bonds because they are associated with very low risk, while the larger issuance has increased liquidity in the market, meaning investors find them easier to buy and sell.
Without joint debt, governments would have struggled to deal with crises that have spiraled out of control. The EU debt is financing a €650 billion post-pandemic recovery fund, €150 billion in cheap loans to boost military spending across the bloc, and a €90 billion bailout to help Ukraine defend itself against Russian forces - currently blocked by Hungary.
The growing appetite for Eurobonds also fuels the EU's ambitions to rival the dollar as the world's reserve currency. The US has held that status for decades, formalised by the Bretton Woods agreement in 1944, which made the dollar the anchor of the global financial system and helped Washington borrow cheaply.
The US dollar still accounts for about 56% of all global reserves, compared with the euro, which is stable at around 20%. But the Commission is seizing the moment to attract foreign investors and expand its global influence. "When investors are trying to gradually wean their economies off the dollar in order to move towards economic stability, they are looking to the euro," the senior EU official said.
The EU's long-standing taboo on issuing joint debt has broken down since the pandemic, after years of resistance during the euro crisis by northern European governments. Eurobond issuance has continued to increase in the years since, as countries such as France and Italy have found themselves too indebted to deal with recent crises on their own. These money woes are unlikely to abate as the bloc grapples with the economic fallout from the Iran war and Trump’s repeated threats to withdraw the US umbrella from Europe.
EU leaders are determined to speed up the economy to keep pace with the US and China, a costly undertaking that requires around 800 billion euros a year, according to former European Central Bank President Mario Draghi. While that scale of investment remains a long way off, the Commission, which has become the world’s third-largest issuer of AAA-rated bonds according to several ratings agencies, after Canada and Germany, suggests it will continue issuing debt in the coming years. The rating of US government bonds ranges from AAA to the slightly lower AA, depending on the agency.
In its new seven-year budget proposal for 2028, Brussels has signaled that it will resort to Eurobonds to finance Ukraine’s recovery, respond to crises and lend to countries to invest in EU priorities. However, frugal northern countries such as Germany and the Netherlands, which pay lower interest rates to the Commission by borrowing in their own names, are opposed to more joint EU debt in the ongoing negotiations.
Until the new budget is agreed, investors are waiting for the EU executive to continue its travels, with plans to sell 160 billion euros worth of Eurobonds this year - an increase of 10 billion euros compared to 2025.
"The global market is increasingly afraid of the US dollar. It is looking for alternatives. "Let's offer him European debt," French President Emmanuel Macron said in February.