ESM safeguards the euro in times of crisis

Photo: EU Valdis Dombrovskis (L) and Klaus Regling (R).

A phone, a laptop and an espresso machine in an empty office, this was the start of the euro area's crisis-fighting institution - the Luxembourg-based European Stability Mechanism (ESM). Now it has a staff of 180 experts and has provided €295bn in rescue loans to five countries.

In the Commission's Berlaymont Building in Brussels was presented the book that tells the story of the creation 10 years ago of the ESM and its temporary predecessor, the European Financial Stability Facility (EFSF), founded during the European sovereign debt crisis. The title of the book is “Safeguarding the Euro in Times of Crisis - The Inside Story of the European Stability Mechanism”.

Since its origins, the European Stability Mechanism has played an important role in providing financial assistance to Cyprus and Greece. One can say that the ESM 'came of age' during the 2015 Greek crisis, said VP Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, at the presentation of the book.

Talking about the ESM future, VP Valdis Dombrovskis mentioned that it will also take up the new vital task of serving as a backstop to the Single Resolution Fund. This will reinforce our capacity to manage crises originating in the banking sector, he added, asserting that he hopes Member States in the not-so distant future will agree that the European Stability Mechanism becomes a community body.

When you read the book, you will see that one person played a particularly important role in the history of the ESM - this was Jean-Claude Juncker. “Without him, the ESM would not exist in its current form and I would probably not be its Managing Director,” Klaus Regling, ESM Managing Director, underlined.

 

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