EUROZONE ISSUANCE: EGB Supply - W/C 21 April

European Commission President Ursula von der Leyen has stated in a speech at the Royal Danish Military Academy in Copenhagen that Europe “must get ready for war,” following a period of “underinvestment” and “complacency” in defence policy. 

• Von der Leyen says: “By 2030, Europe must have strong defence posture," says the EU's 'Readiness 2030' means "to have re-armed and developed capabilities to have credible deterrence.”
• Says that tomorrow the EU will unveil a ‘roadmap’ for ‘Readiness 2023’ which will cover four key priorities and detail 800 billion euros of spending. VDL says the roadmap will cover joint procurement that will allow the EU to “buy faster and buy more European.”
• Von der Leyen says that the first priority for Europe is a “surge in defence spending”. Says the EU must develop “large-scale projects” and “step up collaborative procurement”.
• Von der Leyen adds that the EU will set up a joint task force with Ukraine to “coordinate military support”, and the bloc is working to break new ground on security with the UK.”
• Von der Leyen says that decisions to ramp up defence spending taken by Denmark and Germany (today) are “both historic and necessary.”

• US TSY 52W AUCTION: NON-COMP BIDS $1.218 BLN FROM $48.000 BLN TOTAL

The Bundestag has approved a constitutional amendment to loosen the federal debt brake to allow for greater defence spending, to create an E500B infrastructure fund, and allow the federal states to rack up a structural deficit of 0.35% of GDP. The measures passed with 517 votes in favour and 207 opposed, crossing the two-thirds majority threshold of 489. Following the deal reached late last week, the vote totals would indicate that only a handful of lawmakers from the conservative Christian Democratic Union/Christian Social Union, the centre-left Social Democrats, and the environmentalist Greens did not vote in favour of the landmark reforms. 

• As noted earlier (see 'GERMANY: Bundesrat Should Not Prove Obstacle To Debt Brake Reform', 1129GMT), the measures will now go to the Bundesrat, which holds its next plenary session on 21 March. It is largely seen as a formality that the chamber will pass the measures, allowing them to go onto the statute books before the new Bundestag convenes on 25 March. With the passage of the reforms, the 'old' Bundestag has been formally closed.