European Financial Stability Mechanism


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European Financial Stability Mechanism

A lending facility established by the European Union to bail out member states in danger of default and other fiscal stress. The EFSM is permitted to borrow up to 60 billion euros to finance its objectives. Its debt is collateralized by the EU budget. It began operations in 2011 with a bond issue to assist the Irish government.
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Another alternative described in the paper was using 12 billion euros left over from the European Financial Stability Mechanism (EFSM) - after bailing out Greece, Ireland and Portugal - as leverage to raise up to 200 billion euros from the private sector.
Under the terms of a deal signed by Mr Osborne's predecessor Alistair Darling in the dying days of the Labour government, Britain is committed to contributing a share of any bail-out provided before 2013 under the European Financial Stability Mechanism (EFSM).
There were strong objections from both Britain and the Czech Republic -- EU countries that do not use the euro -- to proposals to provide a e1/47bn loan from the European Financial Stability Mechanism (EFSM), an EU-wide fund not intended for euro zone funding needs.
Spain is the first country to tap the special credit line for banks provided for under the existing European Financial Stability Mechanism (EFSF), as well as under Article 15 of the ESM treaty.
5billion of the loans which we will receive from the European Financial Stability Mechanism.
The options include bilateral loans to Greece, the disbursement of profits made by the ECB on Greek bonds it bought during the crisis, and making use of the funds still available in a mini-bailout fund set up in 2010 -- the European Financial Stability Mechanism (EFSM).
Two funds: the eurozone government-backed European Financial Stability Facility (440 billion euro) and the European Financial Stability Mechanism (60 billion euro), backed by the EU budget.
5billion, while the remaining EUR45billion is split equally between the European Financial Stability Fund and European Financial Stability Mechanism - within this is are loans from the UK, Sweden and Denmark.
The EU currently has two temporary rescue funds - the EU-budget backed European Financial Stability Mechanism (EFSM), with 12 billion out of 60 billion remaining after Ireland's and Portugal's bailouts, and the European Financial Stability Facility (EFSF), backed by eurozone guarantees and with an estimated 250 billion left (the EFSF is also contributing to the second Greek bailout).
Finance ministers agreed on Tuesday night on detailed plans to leverage the European Financial Stability Mechanism (EFSF), but could not say by how much because of rapidly worsening market conditions, prompting them to look to the IMF.
It requires eurozone states to contribute up-front capital reserves before it can operate - until then, the temporary European Financial Stability Mechanism will finance bailouts for Ireland and Portugal, as well as a second Greek aid package.
The bond will be raised under the European Financial Stability Mechanism, the 60 billion fund guaranteed by the EU budget and funding a third of the Portuguese bailout.
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