Brussels, 03/02/2015 (Agence Europe) - On Tuesday 3 February, Lithuania became the 19th member country of the European Stability Mechanism (ESM), the permanent bailout fund of the eurozone.
Joining the ESM is “an insurance policy against financial turmoil in the future” and reflects Lithuania's commitment of solidarity to its partners sharing the single currency in the event of necessity, said the Lithuanian finance minister, Rimantas Sadzius.
If required, the Baltic Sate can itself appeal for assistance under the bailout fund, of a total financial weight of €500 billion. This conditional protection brings with it an obligation upon Vilnius to feed into it at the level of the relative size of the Lithuanian Central Bank within the European central bank system.
Lithuania's subscription to the ESM is €2.86 billion, including €327.2 million in paid-in capital (see EUROPE 11240). This sum will be paid in five annual tranches of €65.4 million. As a country with GDP below 75% of the EU average, Lithuania will benefit from the temporary correction for new members of the ESM until 2027. By this date, another paid-in capital contribution of €159.4 million will be required.
Lithuania will not join the European Financial Stability Facility (EFSF), the temporary crisis resolution fund which preceded the ESM. The EFSF, which will no longer take part in any further financial bailouts of the eurozone countries, will remain active until Greece, Portugal and Ireland have paid back all of the loans granted to them in the framework of their respective bailout plans. (MB)