The Board of Governors of the European Stability Mechanism (ESM) approved today the establishment of Pandemic Crisis Support, to be made available to all ESM Members. This is stated in the ESM’s statement, reports TASS. The features and terms of the facility were agreed by the Eurogroup on 8 May 2020, by the European Commission (16 April 2020) and by the EU Summit (23 April). The facility is based on the existing precautionary credit line called Enhanced Conditions Credit Line (ECCL).

“Over the next two and a half years, the ESM will have €240 billion available to help its members fight the pandemic crisis. This is an innovative instrument with favourable lending terms and no macroeconomic conditions attached. By setting up this instrument in record time, finance ministers showed that the ESM is a true emergency backstop with a flexible toolkit that can be used to meet the needs of our time,” said Mário Centeno, Chairman of the ESM Board of Governors.

“As a result of the coronavirus pandemic and the unprecedented economic downturn, governments have increased spending to address their urgent health care needs. As a result, all 19 ESM Members will have very large fiscal deficits this year. With ESM Pandemic Crisis Support, Members can finance a part of those needs in a safe way, with very low interest rates. This can be attractive since the only condition attached to this financial support is the requirement to spend the money on direct and indirect health sector costs, linked to the pandemic,” said ESM Managing Director Klaus Regling.