European Stability Mechanism

The European Stability Mechanism (ESM) provides financial assistance to euro area countries in crisis, acting as a lender of last resort to ensure the financial stability and prosperity of the euro area. It was set up on 8 October 2012 as a successor to the temporary European Financial Stability Facility (EFSF), which had been established in June 2010. The ESM has 21 shareholders, a total lending capacity of €500 bn, and €81.1 bn of paid-in capital. Its membership grew from 17 to 19, with Latvia and Lithuania joining in 2014 and 2015 respectively, and Croatia joining in March 2023. Pierre Gramegna is Managing Director.

The euro zone debt crisis hit in 2010, when markets began to mistrust a number of countries and countries began to lose market access; Greece was first to ask for help. The European Financial Stability Facility (EFSF) was set up as a temporary solution in June 2010. The European Stability Mechanism (ESM) was set up on 8 October 2012 as a successor to the EFSF. Ten years ago, on 8 October 2012, the ESM formally began operating when the finance ministers of the euro area countries took part in the inaugural meeting of the ESM Board of Governors. The ESM was created to safeguard financial stability of the euro area as a whole and of its Members, and it replaced the temporary EFSF. During the euro crisis, the EFSF and ESM provided financial assistance to Ireland, Portugal, Spain, Cyprus and Greece. During the Covid-19 pandemic, the ESM created the Pandemic Crisis Support instrument. Since the ESM's inception, its membership has grown from 17 to 19; Latvia and Lithuania joined in 2014 and 2015 respectively, and the number of members increased to 20 when Croatia joined in March 2023.

Lender of last resort for the euro area

• Pandemic Crisis Support

  A credit line available to support member countries in financing direct and indirect healthcare costs related to the pandemic.

1. 1Home | European Stability Mechanismesm.europa.eu
2. 2History | European Stability Mechanismesm.europa.eu
3. 3ESM marks 10th anniversary | European Stability Mechanismesm.europa.eu
4. 4The ESM Book | European Stability Mechanismesm.europa.eu