European Stability Mechanism

European Stability Mechanism (or ESM) is an international organisation which will provide financial assistance to members of the eurozone in financial difficulty. The ESM is intended to replace existing temporary funding programmes the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM).

It is proposed to locate the ESM in Luxembourg.

The ESM Treaty entered into force on 27 September 2012 and was inaugurated on 8 October 2012.

The shareholders of the ESM are the 17 euro area Member States. It has a total subscribed capital of €700 billion which comprises €80 billion in paid-in capital and €620 billion in committed callable capital. The ESM’s effective lending capacity is €500 billion.

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