European Financial Stability Facility
(EFSF). The European Financial Stability Facility was established in 2010 as a temporary rescue mechanism.
The EFSF’s mandate is to safeguard financial stability in Europe by providing financial assistance to Euro zone Member States.
The EFSF is authorised to use instruments and techniques including:
1. Lending to countries in financial difficulties.
2. Intervening in the debt primary and secondary markets.
3. Financing recapitalisations of banks and other financial institutions through loans to governments.
To fulfill its mission, the EFSF issues bonds or other debt instruments on the capital markets.
The EFSF is backed by guarantee commitments from the Euro zone Member States.
This Facility was replaced by the European Stability Mechanism (ESM) in 2012 which finances new programmes. However, it continues to be used for the ongoing programmes in Greece, Portugal and Ireland.
