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A decade of the euro rescue funds EFSF and ESM

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In June 2010, the temporary EFSF was established, followed by the permanent ESM in October 2012. ESM Board of Governors Chairperson Paschal Donohoe and ESM Managing Director Klaus Regling reflect on the past decade and the future of the euro area rescue funds.

Scroll further down to take a ride in the ESM car and discover some of the most memorable road stops of the past 10 years.


Message from the Chairperson of the ESM Board of Governors


The past decade has proven to be a defining phase in the history of European integration; from 2010, with the establishment of the European Financial Stability Facility (EFSF) to address the euro crisis, to 2020, when the coronavirus pandemic struck Europe.

The temporary EFSF and its successor, the permanent European Stability Mechanism (ESM), filled a gap in the European institutional architecture that was not foreseen at the inception of the European Economic and Monetary Union (EMU). In 2010, policymakers moved swiftly to fill that gap in order to reassure markets and mitigate the effects of the crisis. Together with fiscal and structural reforms at both European and national level, the European Central Bank’s (ECB) accommodative monetary policy, and the creation of a banking union, they overcame the crisis and made monetary union more resilient.

The EFSF and ESM are dedicated to safeguarding the stability of the euro area and its members by providing financial assistance to those experiencing or threatened by a crisis. The previous crisis underscored the ESM’s value as a crisis-fighting institution and its importance in the euro area landscape.

We are now facing another challenge, one that no country can overcome alone. Again, the ESM is playing an important role in the European response and stands ready to activate the Pandemic Crisis Support credit line should it be required.

European Union (EU) and national action to tackle the coronavirus pandemic and its economic fallout have been vital and unprecedented. The EU economic policy response represents almost €2 trillion. As part of this, the ESM, the European Commission, and the European Investment Bank will issue more common debt on the capital market – an expression of European solidarity and another significant step forward in European integration.

Strengthening the mandate of the ESM will be central to enhancing the resilience of our monetary union. As we begin to recover from the coronavirus crisis, it is perhaps even more essential now that our institutions and structures are capable of meeting the challenges that lie ahead. Therefore, I consider it necessary that we implement the new tasks and responsibilities of the ESM in order to help it develop to its full potential as a crisis resolution mechanism. I am certain that the ESM will continue to play its role in safeguarding the euro for many years to come.

Paschal Donohoe
Chairperson of the ESM Board of Governors
President of the Eurogroup
Minister for Finance, Ireland



Message from the Managing Director


Ten years ago, the temporary EFSF was created to address a crisis where the survival of the currency union was at stake. Some member states faced the loss of market access, while others began to feel spillover effects. As that crisis gathered steam, it became clear that a permanent response was needed. The ESM was created with the mandate to safeguard financial stability for the euro area as a whole and its member states.

With a solid financial base of €80 billion in paid-in capital, €620 billion in callable capital, €500 billion in lending capacity, and the ability to raise money cheaply on the markets, the ESM provided a convincing answer to the crisis that markets had been looking for. Together with its temporary predecessor, the ESM financed six assistance programmes in five countries: Ireland, Greece, Spain, Cyprus, and Portugal. Today, the ESM and its partners look upon the five programme countries as five success stories.

The mandate of safeguarding financial stability does not mention programme countries’ social welfare, but by granting loans to troubled countries when no one else will the ESM allows a country to spread the adjustment burden over several years, thereby easing the pain for citizens.

After a successful first 10 years, we now turn to the future. The ESM is part of the €540 billion European Covid-19 crisis response. The ESM is evolving; like any crisis fund or institution, it is adapting to the circumstances. Our Pandemic Crisis Support credit line demonstrates yet again our commitment to the mandate of safeguarding the euro.

Klaus Regling
Managing Director, European Stability Mechanism



Drive through history in our ESM car


Click on the blue stops along the winding road to explore some of the most memorable moments in the ESM and EFSF’s journey. Enjoy the drive!

A decade of the euro rescue funds EFSF and ESM

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