By Yoruk Bahceli

(Reuters) – The European Union has raised more than 12 billion euro ($13.24 trillion) through a bond sale Tuesday. Investors wait to find out if it will announce a new plan for joint borrowing to address funding requirements of member states following the invasion in Ukraine.

According to the European Commission, it was able to raise more than 59 billion euro in order for a 10-year bond that would support its coronavirus recovery program. It raised 10 billion Euros.

Despite it being the lowest level outright demand since the EU launched debt sales last summer to fund its recovery funds, the EU increased the size the issue from 8 billion euros earlier Tuesday. This memo was seen by Reuters.

According to the Commission, it was also in demand for 35 billion Euros in a 15 year bond supporting its SURE unemployment plan. The first fund jointly funded by both the EU and the EU in early stages of the pandemic.

It is the EU’s first major bond sale since a Bloomberg report earlier in March suggested the bloc could soon unveil a new plan for further joint bond issuance to finance energy and defence spending in the face of Russia’s invasion of Ukraine.

An additional fund could be created to supplement the SURE unemployment fund, which is worth up to 100 Billion Euros and the Recovery Fund of 800 Billion Euros launched by the EU during the Pandemic. This fund was established in extraordinary acts of fiscal solidarity.

France, Germany, and other richer member states are leading the call for EU debt. Germany is opposed to further joint borrowing.

Paolo Gentiloni, European Economic Commissioner, stated Tuesday that there will be a serious discussion about joint borrowing within the next few days once the bloc is more clear on the economic consequences of the crisis.

Jens Peter Sorensen is the chief analyst of Danske Bank. He noted that the SURE Bond, classified as a Social bond (one type ESG debt), received higher demand than the available amount.

He said that if you could put an ESG stamp to any fund you begin to make, there will be a lot of demand for bonds. This refers to potential new borrowing.

The yields of the 10 year bond and 15-year bonds are 1.02%, respectively.

The possibility of a new borrowing program helped reduce risk premiums on Italian government bonds and those from other countries in Southern Europe, even though the Ukraine war. This was at a moment when the European Central Bank intends to decrease the stimulus. It is the key support mechanism for southern Europe.

This news also helped boost the stock market for single currency and euro area stocks.

($1 = 0.9065 euros)