Foreign investors are increasingly turning toward European Union debt as Donald Trump’s trade tariffs and a foreign policy punctuated by conflict drive nervous markets to seek stability in EU bonds.

According to a report by POLITICO, this shift represents welcome news for the European Commission, which has been scaling up bond issuances to fund new mandates, including increased defense spending and support for Ukraine’s war efforts.

Brussels is framing its “sales pitch” around a distinct narrative: the EU’s slow, consensus-driven decision-making process serves as a bastion of stability in a world upended by Trump. By investing in Eurobonds, the Commission argues, investors can secure a stake in that stability.

Data obtained by POLITICO reveals that fund managers from the United Kingdom, Asia, the Middle East, Africa, and Oceania have purchased 43% of the Eurobonds auctioned by the Commission since the start of 2026. This marks an 8% increase over the average of the last six years. The trend places EU Budget Commissioner Piotr Serafin in a strong position ahead of a scheduled promotional tour in mid-April, where he will pitch Eurobonds to investors in Hong Kong, Malaysia, and Singapore.

Since the beginning of 2026, the Commission has issued €52 billion in bonds, up from €44 billion during the same period in 2025.

“Demand for Europe is rising due to its alignment with the rules-based international order and values,” a senior EU official told POLITICO. “Consequently, demand for EU bonds is also on the rise.”

The eurozone’s rescue fund and its predecessors—the European Stability Mechanism (ESM) and the European Financial Stability Facility—have observed a similar trend. According to ESM data presented in January, these institutions have issued a total of €566 billion in bonds since 2010 and sold a record amount 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 a net total of more than $80 billion in US Treasuries. On this side of the Atlantic, the EU is leveraging these developments to solidify its reputation as a safe haven for anxious foreign investors.

“EU leaders are emphasizing that Europe is predictable in terms of policy, and in today’s global geopolitical environment, this will be noticed by many investors and market participants,” said Ken Egan of the KBRA credit rating agency.

The sell-off in the US does not yet constitute a mass exodus. While the US Treasury market stands at approximately $31 trillion, the market for bonds issued by the European Commission barely reaches €1 trillion. However, the rising demand for Eurobonds, coupled with a robust credit rating, allows the Commission to borrow at lower costs than many indebted EU governments.

In a sign of growing market confidence, the yield spread on Commission bonds over German government bonds—long considered the safest in the eurozone—has narrowed to approximately 40 basis points. This is down significantly from 70 basis points in 2022. One basis point is equal to one-hundredth of one percent. Meanwhile, US Treasuries offer investors a premium of over 130 basis points compared to German Bunds.

Factors beyond concerns over Trump’s policies are also at play. Some investors purchase EU bonds specifically for their very low risk profile, while increased issuance volumes have improved market liquidity, making it easier for investors to trade these securities.

Without common debt, governments would have struggled to manage consecutive crises independently. EU debt has funded a €650 billion post-pandemic recovery fund, €150 billion in low-cost loans to bolster military spending across the bloc, and a €90 billion package to assist Ukraine’s defense against Russia—the latter of which is currently blocked by Hungary.

The burgeoning interest in Eurobonds is also encouraging the EU’s ambition to challenge the dollar as the world’s primary reserve currency. The US has held this status for decades, formalized by the 1944 Bretton Woods agreement, which positioned the dollar as the anchor of the global financial system and facilitated cheap borrowing for Washington. The dollar accounts for approximately 56% of global reserves, while the euro remains steady in second place at around 20%.

However, the Commission is seizing this opportunity to attract foreign investors and expand its global influence.

“When investors seek to gradually decouple their economies from the dollar due to economic stability, they look to the euro,” the senior EU official noted.

The long-standing taboo surrounding the EU’s joint debt issuance was broken following the pandemic, ending years of resistance from Northern European governments during the euro crisis. As countries like France and Italy realized they were too indebted to manage recent crises alone, Eurobond issuances continued to grow in subsequent years.

For a bloc grappling with the economic fallout of the war in Iran and Trump’s repeated threats to withdraw the US security umbrella from Europe, these fiscal pressures are unlikely to ease. EU leaders are also determined to accelerate the economy to keep pace with the US and China. According to former European Central Bank President Mario Draghi, this is a costly undertaking requiring approximately €800 billion annually.

While investment on that scale remains distant, the Commission—which has become the world’s third-largest AAA-rated bond issuer after Canada and Germany, according to various rating agencies—has indicated it will continue to issue debt in the coming years. The rating for US Treasuries varies by agency between AAA and the slightly lower AA.

Brussels has stated that in its new seven-year budget proposal, effective from 2028, it will utilize Eurobonds to fund the reconstruction of Ukraine, respond to crises, and provide loans for member states to invest in EU priorities.

Nevertheless, frugal Northern nations such as Germany and the Netherlands, which pay lower interest rates by borrowing on their own behalf than through the Commission, oppose further EU common debt in ongoing negotiations. Until a new budget is agreed upon, investors expect the EU executive to maintain its current trajectory. The EU plans to sell €160 billion in Eurobonds this year, a €10 billion increase over 2025.