European Stability Mechanism (ESM)

The European Stability Mechanism (ESM) is a financial institution established by eurozone countries to provide support to member states facing economic difficulties. It offers loans to nations in crisis to help stabilize their economies and maintain financial stability in the euro area. Funded by contributions from eurozone countries, the ESM can also buy government bonds and provide financial assistance under strict conditions, ensuring that countries implement necessary reforms. The goal is to prevent crises from spreading and to protect the euro currency and its member states from severe economic disruptions.