Navigation path
- European Commission
- Economic and Financial Affairs
- Focus on
- EU Response to the economic and financial crisis
QUESTIONS AND ANSWERS on financial assistance to euro-area member states
The current crisis calls for concerted action at both the European and the international level. The EU has taken a series of bold measures to restore confidence, stability and sustainability in the financial markets.
1. General questions on financial assistance to euro-area Member States
- Will taxpayers in one Member State pay for problems in other Member States?
- Won’t the availability of assistance enable some countries to free-ride on the efforts of others (the “moral hazard” problem)?
2. How assistance to Member States works
- What instruments are available to provide financial assistance to EU Member States?
- How does the European Financial Stabilisation Mechanism (EFSM) work?
- Is the ESFM open to all EU countries?
- What is the European Financial Stabilisation Facility (EFSF) and what will it do?
- Are the European Financial Stabilisation Mechanism (EFSM) and European Financial Stability Facility (EFSF) and euro-area assistance to Greece and Ireland not just bail-outs, which are ruled out by the Lisbon Treaty?
3. The Economic Adjustment Programme for Greece
- What are the key elements of the Economic Adjustment Programme for Greece?
- Will the Economic Adjustment Programme for Greece be enough to stabilise Greece's debt?
- What about the social costs of the Economic Adjustment Programme in Greece?
4. The Economic Adjustment Programme for Ireland
- Why does Ireland need an Economic Adjustment Programme?
- How much is it?
- What are the key elements of the programme?
- How big is the Irish programme, and will it be enough to stabilise debt?
5. The Economic Adjustment Programme for Portugal
- Why is Portugal asking for a support programme?
- What are the key elements of the Economic Adjustment Programme for Portugal?
- How much financing will Portugal receive and over what time period?
- What entities are involved?
- What are the conditions for receiving aid?
- Is Portugal still involved in assistance programs to other countries?
- What interest rate is Portugal charged?
- When will the loan tranches be paid?
- What are the reimbursement terms?
- How does the EFSF work?
6. Other issues related to the crisis response
7. Strengthening Economic and Monetary Union (EMU)
- What can we learn from the crisis about how to improve the functioning of EMU?
- What institutional changes are necessary?
- How can we make sure that countries regain lost ground in terms of competitiveness?
- Wasn’t it a mistake to create EMU without a fiscal union?
- How will compliance with the fiscal rules be ensured in the future?
- What is the European Semester?
- Doesn’t earlier EU scrutiny of Member State budgets undermine the sovereignty of national parliaments?
Still have questions? Contact the Commission at: ecfin-info@ec.europa.eu
[563 KB]