Foreword
Following two large evaluation exercises conducted in 2016–2017 and 2019–2020 led by High-Level Independent Evaluators on European Financial Stability Facility (EFSF)- and European Stability Mechanism (ESM)-supported financial assistance programmes, the ESM Evaluation function was formally established in December 2022. It operates under the ESM Secretary General, reporting to the Management Board, and enjoys a high level of independence with quality assurance provided by external advisors in the Evaluation Reference Group. This evaluation aspires to be transformational, supporting significant and durable change in the approach to Members’ challenges. While the previous programme evaluations were commissioned by the Board of Governors, this evaluation was more internally focused and obtained its mandate from the Managing Director, following resource commitments from the Management Board. Through this closer relationship with management, the exercise set out to serve the managerial team by assessing the ESM’s existing analytical capabilities against business plans, peer standards, and external expectations, and by offering advice to foster continued incremental change.
Executive summary
Despite commendable progress made under the 2019 Management Plan, the ESM must do much more to meet its responsibilities in full. The evaluation finds that the analytical toolkit is insufficiently codified and consolidated and that the integration of market intelligence with financial and macroeconomic monitoring is incomplete, hindering effective crisis management and the ability to provide actionable policy advice. To make the ESM’s capabilities effective, greater focus is required on proposing policy solutions to mitigate the impacts of economic shocks. This requires stronger internal coordination and independent analytical capabilities. The ESM should also share its assessments, including most importantly with the ESM Members concerned. Moreover, it needs to build up capacity to assume fully the greater role envisaged for it in programme negotiation and design. This also requires further contingency planning.