Tag Archives: Euro bailouts

On 16 December, the European Council agreed that the Treaty should be amended. The EU leaders agreed, therefore, on the text of a draft decision amending Article 136 TFEU, which covers measures that solely apply to eurozone member states, so that “Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole.” The treaty amendment entails adding two sentences to the abovementioned Article to allow the creation of a permanent crisis mechanism. If there is a risk to the stability of the euro area as a whole, the euro area Member States may activate such a mechanism by mutual agreement, but it is specified, “The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.” The permanent European StabilityMechanism will replace the European Financial Stability Facility (worth €440bn) and the European Financial Stabilisation Mechanism (worth €60 billion), which will remain in force until June 2013.

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