European Stability Mechanism

About the ESM

The European Stability Mechanism is a permanent crisis resolution mechanism for the countries of the euro area. The ESM issues debt instruments in order to finance loans and other forms of financial assistance to euro area Members States.

The decision leading to the creation of the ESM was taken by the European Council in December 2010. The euro area Member States signed an intergovernmental treaty establishing the ESM on 2 February 2012. The ESM was inaugurated on 8 October 2012.

Scope of activity

The ESM is authorised to make use of the following lending instruments for the benefit of its Members, subject to appropriate conditionality:

Provide loans in the framework of a macroeconomic adjustment programme;
Purchase debt in the primary and secondary debt markets;
Provide precautionary financial assistance in the form of credit lines;
Finance recapitalisations of financial institutions through loans to the governments of ESM Members. The ESM will be empowered to directly recapitalise banks in the euro area once an effective single supervisory mechanism for euro area banks is established.

Key ESM facts and figures

intergovernmental organisation under public international law, based in Luxembourg
total subscribed capital of €700 billion, with paid-in capital (€80 billion) and committed callable capital (€620 billion)
effective lending capacity of €500 billion
shareholders are the 17 euro area Member States
Managing Director: Klaus Regling
approximately 80 staff members

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