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Capital call

A legal right of the ESM to require euro area countries to pay authorised unpaid capital. The ESM Treaty specifies three types of capital calls: (i) general capital calls to accelerate or increase the payment of paid-in capital, which may be enacted at any time by the Board of Governors; (ii) capital calls to restore the level of paid-in capital, which may be made by the Board of Directors; and (iii) emergency capital calls to avoid a default of any payment obligation due to ESM creditors, which may be made by the Managing Director.

Capital contribution key (ESM)

A key specifying the percentage of total capital subscription and of total paid-in capital attributed to each ESM Member. The ESM capital contribution key is calculated to reflect the respective country’s share in the total population and GDP of the euro area. 

Capital controls

Measures introduced by a government or central bank to limit the flow of capital in and out of the domestic economy. These measures may include strict limits on daily cash withdrawals by bank account holders and overseas transfers of cash. It can also impose other measures such as limiting foreign exchange transactions.

Clean exit (from financial assistance programme)

Clean exit (from financial assistance programme) – the conclusion of an EFSF or ESM financial assistance programme by a country without any type of follow-up assistance (e.g. precautionary credit line). A clean exit indicates that the former programme country is fully capable of financing its debt on financial markets.

Commitment fee (ESM loans)

A fee the ESM charges to a programme country, to cover any cost from investing funds in the liquidity buffer, should they be higher than its cost of funding. The commitment fee is applied ex-post when costs are actually incurred by the ESM.


Policy conditions that countries receiving financial assistance from the ESM are required to meet before receiving support. These conditions can, for instance, relate to policy measures to be implemented by the country aimed at lowering tax evasion. The policy conditions are concluded in a Memorandum of Understanding, which is approved by the Board of Governors of the ESM. 

Country-specific recommendations

Documents prepared by the European Commission for each EU Member State, analysing their economic situation and providing recommendations on measures they should adopt over the coming 12 months. 

The annual interest rate paid on a bond, expressed as a percentage of the face value. 
Credit line

Precautionary financial support made available by the ESM to a country, by establishing a balance that the country is allowed to draw (subject to certain conditions). The ESM offers two types of credit lines: the Precautionary Conditioned Credit Line (PCCL) and the Enhanced Conditions Credit Line (ECCL).

Current account (balance)

The sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers. A positive current account balance shows that a country is a net lender to the rest of the world, while a negative current account balance indicates that it is a net borrower from the rest of the world.