The European Financial Stabilisation Mechanism (EFSM) is an emergency funding programme reliant upon funds raised on the financial markets and guaranteed by the

European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...

using the

budget of the European Union The Budget of the European Union (EU budget) is used to finance EU funding programmes (such as the European Regional Development Fund, the Cohesion Fund, Horizon Europe, or Erasmus+) and other expenditure at the European level. The EU budget ...

as collateral. It runs under the supervision of the Commission and aims at preserving financial stability in Europe by providing financial assistance to member states of the European Union in economic difficulty. The Commission fund, backed by all 27

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

member states, has the authority to raise up to €60 billion. The EFSM is rated AAA by Fitch,

Moody's Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides internationa ...

and

Standard & Poor's S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities. S&P is con ...

. The EFSM has been operational since 10 May 2010.

Programmes

Irish programme

Under the programme agreed between the Eurozone and the government of Ireland, the EFSM wil provide loans of 22.4 billion euros between 2010 and 2013. As of January 2012 the EFSM had provided 15.4 bn. Further funds have also been provided through the EFSF

Portuguese programme

Under the programme agreed between the Eurozone and the government of Portugal, the EFSM will provide loans of 26 billion euros between 2011 and 2014. As of January 2012 the EFSM had provided 15.6 bn. Further funds have also been provided through the EFSF

Greece

In July 2015 the European Commission proposed to re-activate the EFSM to provide financing for a bridging loan to the government of Greece, in order to meet its immediate commitments including loan repayments to the IMF and ECB. In August, the loan of around €7 billion was fully repaid by Greece.

Operations

2011 inaugural issuance

On 5 January 2011, the

, under the European Financial Stabilization Mechanism, successfully placed in the capital markets a €5 billion issue of bonds as part of the financial support package agreed for Ireland. The issuance spread was fixed at mid swap plus 12 basis points. This implies borrowing costs for EFSM of 2.59%.

Subsequent issuances

* €4.75 bn 10 yr bond issued on 24 May 2011 * €4.75 bn 5 yr bond issued on 25 May 2011 * €5.0 bn 10yr bond issued on 14 Sept. 2011 * €4.0 bn 15yr bond issued on 22 Sept. 2011 * €1.1 bn 7yr bond issued on 29 Sept. 2011 * €3.0 bn 30 yr bond issued on 9 Jan. 2012

Bailout programs for EU members (since 2008)

References

{{European Union topics, state=collapsed Eurozone Policy and political reactions to the Eurozone crisis de:Europäischer Stabilisierungsmechanismus