The EU institutions provide four types of financial assistance:
- To help an EU member country keep stable the sum of its financial transactions with the rest of the world (balance of payments)
- As part of the European Financial Stabilisation Mechanism (EFSM)
- To support countries preparing to join the EU
The "Balance of Payment Regulation" empowers the European Commission to offer financial assistance to EU countries that do not use the euro. The Commission can raise up to €50 billion on behalf of the EU and on-lend it to the beneficiary countries.
The balance of payments (BoP) facility implements the mechanism foreseen by Article 143 TFEU (ex Article 119 TEC), whereby the EU can assist Member States outside the euro area that are having difficulties linked to their balance of payments or their currency.
As of 2011, Romania, Latvia and Hungary have benefitted from the BoP facility.
Regulation 407/2010 empowers the Commission to borrow on behalf of the EU in order to fund loans made under the European Financial Stabilisation Mechanism.
The EFSM is an Article 122 TFEU based mechanism, covering all EU Member States. Under the EFSM, the EU can borrow up to €60 billion to on-lend to a Member State "experiencing a severe economic or financial disturbance caused by exceptional occurrences beyond its control".
The EFSM is part of a wider safety net. Its funds are combined with loans from the European Financial Stability Facility (EFSF) and the International Monetary Fund.
To be eligible, beneficiary countries must implement certain policy measures and are subjected to quarterly reviews by the EU, IMF and ECB.
As of 2011, the EFSM has been activated for Ireland and Portugal.
The instrument for pre-accession assistance provides EU financial aid for projects that require collaboration between several beneficiaries – such as regional structures, networks of experts or civil servants – or that tackle issues of a cross-border nature.
- cooperation with international financial institutions (e.g. EBRD, EIB, ECB) to jointly implement finance facilities
- civil society dialogue and development
- education actions (student mobility programmes etc.)
- actions to help beneficiaries meet the requirements for EU membership and align their standards with the EU (on statistics, customs procedures etc).