The European Stability Mechanism (ESM) has finally been ratified by the requisite number of euro area member states needed for the fund to commence operations.The ESM is Europe’s permanent bailout fund.
The German Constitutional Court’s September 12 decision to approve the ESM was seen as clearing the final hurdle.
There were reports earlier in the week that the ESM would try to leverage up its existing lending capacity, which currently stands at 700 billion euros, up to 2 trillion euros by seeking funds from private investors.
Here are the responsibilities of the eurozone finance ministers who will make up the Board of Governors
The ESM will try to mitigate the liquidity risk its borrowers face while offering highly liquid investment opportunities to its investors
This is the bailout plan where the ESM buys bonds issued directly from government treasuries on the primary market
This is the bailout plan where the ESM intervenes and buys government bonds in the secondary market to influence interest rates
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