ESM Pandemic Crisis Support

On 9 April 2020, the euro area finance ministers (Eurogroup) decided on a comprehensive economic policy response to the COVID-19 crisis. Concretely, three important safety nets for workers, businesses and sovereigns were established, amounting to a package worth €540 billion. The ESM created a safety net for sovereigns in the form of the Pandemic Crisis Support instrument, which became operational on 15 May 2020.

Pandemic Crisis Support was a credit line designed to support ESM Members in the financing of healthcare costs related to the Covid-19 crisis. The ESM could provide loans amounting to 2% a country’s GDP at very low interest rates. Although no Member applied for the facility (which was available until the end of 2022), Pandemic Crisis Support played a useful role during the pandemic crisis by calming and reassuring financial markets that euro area countries could quickly gain access to emergency financing if needed.