Reform of the European Stability Mechanism (ESM)


On 4 December 2018, the Eurogroup agreed on a reform of the European Stability Mechanism (ESM). In the run-up to forthcoming changes to the ESM Treaty, cep analyses the Eurogroup’s political agreements.


The Eurogroup agreed on changes regarding the criteria for Euro States to apply for ESM credit lines. Also, in case of unsustainable public debt of a Euro State, single limb collective action clause should enable creditor participation. Finally, the ESM is to serve as a common backstop for the Single Resolution Fund (SRF).