And Mechanism it is. The representatives of the European Union and of the states of the Eurozone have signed the new treaty on the permanent state-saving fund, the European Stability Mechanism (ESM). The fund will be used to bail out countries in trouble on the markets and will replace, starting next July - one year earlier than initially planned - the current temporary fund to save states, known as the EFSF (European Financial Stability Fund).
This was made official yesterday evening by the president of the EU, Herman Van Rompuy, declaring that the fund will have initial resources of 500 billion euros, thanks to 700 billion of capital subscribed by the 17 states of the euro area. But, he added, "we will reassess the adequacy of the resources of the EFSF and ESM" in the first days of March, when the summit of EU heads of state and government is on the agenda.
The permanent bailout fund “it will help restore confidence and ensure solidarity and financial stability in the Eurozone”, said Van Rompuy. As established in Budget pact signed on Monday in Brussels, recourse to the ESM will be conditional, starting from 2013 March XNUMX, on the ratification of the "Fiscal compact" by the member state of the euro area which requests to make use of it.
This permanent anti-crisis mechanism should succeed in pulling the eurozone out of the debt crisis. And great help could come from the East. Yesterday, following the meeting with German Chancellor Angela Merkel, Chinese premier Wen Jiabao declared that the China he is hypothesizing "a strengthened participation between the EFSF and the ESM to solve the European debt crisis".
