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The ESM is the crisis resolution mechanism for countries of the euro area.It is based in Luxembourg and has been operating since 8 October 2012. Its purpose is to provide stability support through a number of financial assistance instruments to ESM Member States which are experiencing, or are threatened by severe financing problems. For this purpose, the ESM raises funds by issuing capital market instruments and engagingin money market transactions. ESM financial assistance is therefore not funded with tax payer money.

Since 1 July 2013, the ESM is the sole mechanism for responding to new requests for financial assistance by euro area Member States.
The initial rescue fund for the euro area – the EFSF – provided loans to Ireland, Portugal and Greece.The EFSF will not provide any further financial assistance.

To learn key facts about the ESM, including its capital structure, financial assistance, governance, read our Factsheet.