Brussels, 02/05/2014 (Agence Europe) - The European stability mechanism (ESM), the eurozone's backstop, is now fully capitalised at €80 billion, more than for any other international financial body, explained the ESM in a press release on Thursday 1 May.
The ESM has now reached its target level of €80 billion in paid-in capital, as ESM members transferred the final tranche of €15.7 billion. The payments were carried out in five tranches, starting in October 2012 when the ESM was inaugurated. The ESM explains in a press release that this will enable “the ESM to issue bills and bonds at favourable rates in order to finance loans provided to beneficiary member states” in the eurozone.
“Paid-in capital is invested in high quality liquid assets with capital preservation as a key objective”, says the Luxembourg-based ESM. Its managing director, Klaus Regling, commented: “Today is an important day for the ESM. The completion of payments of paid-in capital by our members means that we have now achieved our full lending capacity of €500 billion. Nearly €450 billion of that amount is still available if necessary”.
Regling explained: “Our paid-in capital of €80 billion is the highest among all international financial institutions worldwide. That is a major factor why investors regard the ESM as a highly reputable and trusted issuer.” (LC)