On 4 December 2019, the Eurogroup agreed in principle, subject to national procedures, on the elements related to the ESM Reform.
The scope of new tasks for the ESM was agreed by the euro area finance ministers in their report to the Euro Summit in December 2018. This includes the further development of ESM instruments, enhancing the ESM’s role and setting up a common backstop for the Single Resolution Fund (SRF).
The heads of state or government of euro area countries had endorsed a package of reforms to strengthen Economic and Monetary Union (EMU) and the ESM at the Euro Summit on 14 December 2018, which also included work on completing banking union and the introduction of a new budgetary instrument for the euro area, to make it more robust.
Enhancing the role of the ESM will further strengthen the crisis prevention and resolution capabilities of the euro area and its resilience. The extended mandate will come into force when the revised ESM Treaty is amended. That requires ratification by all 19 ESM Members.
ESM Reform Documents
ExplainerWill the ESM’s Direct Recapitalisation Instrument for banks remain part of the ESM’s financial assistance toolkit?The revised ESM Treaty envisages the introduction of single-limb Collective Action Clauses (CACs). What are they?
Latest Developments13/12/2019 Statement of the Euro Summit21/06/2019 Statement of the Euro Summit14/12/2018 Statement of the Euro Summit29/06/2018 Statement of the Euro Summit