European Commission proposes changes to the European Financial Stabilisation Mechanism (EFSM)

Just a few days after providing €7.16 billion in bridge-financing to Greece under the European Financial Stabilisation Mechanism (EFSM) in order for the country to cover its urgent financing needs and pay its obligations to the IMF and the ECB, the European Commission has proposed changes to the EFSM Regulation. The amendments to the Regulation follow the joint Declaration of 17 July by the European Commission and the Council to provide a permanent safeguard for non-euro Member States making sure they will be protected via a system of collaterals in case of possible future uses of the EFSM. The amendments serve to indemnify Member States whose currency is not the euro in case they would incur a financial loss. The joint Declaration also states that the EFSM would not be used again before the proposed changes are in force. Therefore the Commission’s proposal should now be adopted swiftly by the Council. Please find the amended Regulation here.