The European Financial Stabilisation Mechanism (EFSM) was created for the European Commission to provide financial assistance in the form of back-to-back loans to any EU countries experiencing or threatened by severe financial difficulties.
The EFSM was used to provide financial assistance conditional on the implementation of reforms to Ireland and Portugal between 2011 and 2014, and to provide short-term bridge loans to Greece in July 2015. At the end of 2023, the European Commission had €42.8 billion in EFSM debt outstanding.
Today, euro area countries in need of financial assistance are expected to turn to the European Stability Mechanism (ESM), a permanent intergovernmental institution. However, the EFSM remains in place and can be used if the need arises.