EU countries have continued to funnel billions of euros from the bloc’s post-Covid recovery fund to finance new sovereign investment funds, according to new research published on Friday (10 July).
Europe now accounts for 16 percent of global sovereign assets, with funds increasingly focused on bolstering strategic autonomy and industrial competitiveness, according to the Sovereign Wealth Funds Report 2026.
The recent surge in sovereign funds across the EU has, in large part, been driven by “a new generation of European funds” based on “seed capital” from the Covid recovery funds, added the report, which was developed by IE University’s Center for the Governance of Change and ICEX-Invest in Spain.
The recovery fund was launched in 2022 to help EU economies recover from the gigantic hit caused by the Covid-19 pandemic. Composed of loans and grants, it offered a total of €648bn to the EU-27 who submitted national recovery plans to the EU Commission in order to access the cash.
In January, Spanish prime minister Pedro Sánchez set out plans to set up a ‘Spain Grows’ fund based on using €10.5bn from the EU’s recovery funds programme to drive €120bn in private debt to finance investments in housing and national security. The EU funding programme is set to expire at the end of this year.
