Economics Atlas

How Wealth Is Ordered
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European Stability Mechanism

International Monetary and Trade Organizations

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The European Stability Mechanism is an intergovernmental organization established on September 27, 2012 by the member states of the eurozone to provide financial assistance to countries in the currency union facing severe financing difficulties. Created in the aftermath of the 2008 financial crisis and the European sovereign debt crisis that followed it, the ESM functions as a permanent crisis resolution mechanism, operating under a dedicated treaty that amended the Treaty on the Functioning of the European Union. It is headquartered in Luxembourg City and is owned collectively by all eurozone member states, which subscribe to its capital and can call on its lending instruments when a member faces a genuine risk to its own financial stability.

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