European Stability Mechanism

This is an EU agency that provides Eurozone member states with financial assistance in the form of loans. The ESM was created in the aftermath of the 2008 Financial Crisis to safeguard Eurozone economies if such a crisis were to happen in the future. It has a maximum lending capacity of €500 billion and raises money by selling bonds. The ESM has also set aside €700 billion as capital (although only €80 billion has been raised) to absorb any losses due to the non-repayment of loans by any member states.

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