EUROPEAN FINANCIAL STABILITY FACILITY (EFSF)
The European Financial Stability Facility (EFSF) is a company, set up on 9 May 2010 within the framework of the Ecofin Council to safeguard financial stability in Europe, and incorporated in Luxembourg on 7 June 2010. The company is owned by the sixteen euro area Member States, and it is headed by Klaus Regling, former Director-General for economic and financial affairs of the European Commission. As part of a comprehensive package of measures to preserve financial stability within Europe1, the EFSF is responsible for providing temporary financial assistance to euro area Member States in difficulty. The EFSF, with the support of the German Debt Management Office (DMO), issues bonds, notes, commercial paper, debt securities or other financing arrangements on the market, which are backed by irrevocable and unconditional guarantees of the euro area Member States. The guarantees amount to € 440 billion on a pro rata basis, in accordance with the Member State share in the paid-up capital of the European Central Bank (ECB). The lending is subject to the conditions negotiated with the European Commission in liaison with the European Central Bank and International Monetary Fund and approved by the Eurogroup. The total resources of the EFSF are combined with loans of up to € 60 billion coming from the European Financial Stabilisation Mechanism (EFSM).
THE EFSF has been replaced by the EUROPEAN STABILITY MECHANISM (ESM) in 2013.
1On 9 May 2010, the Council Regulation establishing the European Financial Stabilisation Mechanism ("EFSM") has also been approved.
Editor: Bianca GIANNINI
© 2010 ASSONEB