UBS forecasts EU funding to reach €170-180bn in 2026

UBS expects the EU’s 2026 funding needs to total €170-180bn when the bloc updates its borrowing plans, and says the announcement is unlikely to have a lasting impact on sovereign spreads. The bank points to high EU cash balances (average €77.4bn in H2 2025), negative carry on those balances, and slow disbursements under Next Generation EU and the Recovery and Resilience Facility as reasons for limited market reaction. The Council finalised a €90bn support loan to Ukraine (to be financed by EU bond issuance), with €45bn earmarked for 2026. UBS also expects total RRF disbursements not to exceed €100bn in 2026, implying muted near-term financing pressure.