European Stability Mechanism
Logo of the ESM
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ESM member states
Other EU member states
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| Formation | 27 September 2012 |
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| Type | IGO |
| Legal status | Treaty Establishing the European Stability Mechanism |
| Headquarters |
Luxembourg City, Luxembourg 49°38′07″N 6°10′06″E / 49.63529°N 6.1684°ECoordinates: 49°38′07″N 6°10′06″E / 49.63529°N 6.1684°E |
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Membership
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19 (all Member States of the eurozone) |
| Klaus Regling | |
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President of the Board of Governors
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Jeroen Dijsselbloem |
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Organs
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Board of Governors Board of Directors |
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Staff
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122 by 31 December 2014 |
| Website | esm.europa.eu |
The European Stability Mechanism (ESM) is an intergovernmental organization located in Luxembourg City, which operates under public international law for all eurozone Member States having ratified a special ESM intergovernmental treaty. It was established on 27 September 2012 as a permanent firewall for the eurozone, to safeguard and provide instant access to financial assistance programmes for member states of the eurozone in financial difficulty, with a maximum lending capacity of €500 billion.
It replaces two earlier temporary EU funding programmes: the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM). All new bailouts for any eurozone member state will now be covered by ESM, while the EFSF and EFSM will continue to handle money transfers and programme monitoring for the previously approved bailout loans to Ireland, Portugal and Greece.
The Treaty Establishing the European Stability Mechanism stipulated that the organization would be established if member states representing 90% of its capital requirements ratified the founding treaty. This threshold was surpassed with Germany's completion of the ratification process on 27 September 2012, which brought the treaty into force on that date for sixteen of the seventeen members of the eurozone. The remaining state, Estonia, which had only committed 0.19% of the capital, completed its ratification on 4 October 2012. A separate treaty, amending Article 136 of the Treaty on the Functioning of the European Union (TFEU) to authorize the establishment of the ESM under EU law, was planned to enter into force on 1 January 2013. However, the last of the then-27 European Union member states to complete their ratification of this amendment, the Czech Republic, did not do so until 23 April 2013, postponing its entry into force until 1 May 2013.
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