How will the PCCL work under the revised ESM Treaty?

Access to a PCCL will be based on eligibility criteria and limited to ESM Members where the economic and financial situation is fundamentally strong. As a rule, ESM Members need to meet quantitative benchmarks and comply with qualitative conditions related to EU surveillance. The eligibility criteria include a track record of two years preceding the request for a PCCL with a general government deficit not exceeding 3% of GDP, a general government structural budget balance at or above the country specific minimum benchmark, a debt/GDP ratio below 60% or a reduction in the differential with respect to 60% over the previous two years at an average rate of 1/20 per year. In addition, the requesting country should have access to international capital markets on reasonable terms and a sustainable external position. It should also not be experiencing excessive imbalances or severe financial sector vulnerabilities.

In the case of PCCL, there will be no need for the requesting country to sign a Memorandum of Understanding (MoU). Instead, the country will specify its policy intentions in a Letter of Intent (LoI), committing to continuous compliance with the eligibility criteria. Continuous respect of the eligibility criteria will be assessed at least every six months. The ESM Member has the right to request funds at any time during the availability period according to the agreed terms.