Non-technical summary of ESM Working Paper 71: 
The Unilateral Issuance Framework for the European Stability Mechanism and the European Commission

Under Luxembourg law, issuing debt securities traditionally requires an exchange with a third-party subscriber. For practices such as retaining debt securities in the issuer’s own treasury (with a view, for example, to support secondary market activity), this implies a quite complex process which results in the issuer exchanging the debt securities with a counterparty against payment, for subsequent/immediate repurchase by the issuer itself (such process being referred to as “issuance and repurchase process”). 

This Working Paper discusses the recent introduction of the possibility for the ESM and the European Commission to create debt securities without any exchange with a third party at the time of the creation (referred to as “Unilateral Issuance”), thereby avoiding an issuance and repurchase process. 
Departing from the general legal framework, the paper considers exceptions to the issuance and repurchase process in other jurisdictions, with a focus on sovereign issuers and the relevant market practices.

It then analyses the content of the Unilateral Issuance provision and the relevant effects, putting such new development in the context of the funding activities of both the ESM and the European Commission. 

Finally, the paper describes potential use cases out of the Unilateral Issuance, some of which are already implemented, highlighting also the operational benefits that derive from this new issuance method.