Why are precautionary credit lines needed?

Precautionary credit lines are available for euro area Member States with sound economic fundamentals, which could be affected by an adverse shock beyond their control. In other words, precautionary credit lines intend to prevent potential small crises from turning into more serious ones that may make it necessary for the Member State to request an ESM loan with a full economic adjustment programme. The International Monetary Fund (IMF) also has precautionary credit lines and several countries have used them successfully in recent years.