The ratification process of the reform of the European Stability Mechanism (ESM), the euro area’s bailout fund, should be completed by the end of 2021 as planned (see EUROPE 12613/4).
We expect the ESM reform to come into force “by January next year”, said Eurogroup President Paschal Donohoe, who chairs the ESM board, whose annual meeting was held on the sidelines of the Eurogroup on Thursday 17 June.
If this is the case, the ESM will become the backstop of the Single Resolution Fund (SRF), the financial arm of the resolution component of the banking union, at the beginning of 2022, two years earlier than originally planned.
At this stage, “Slovakia” has finalised its ratification process, Germany will take a decisive step next week, while procedures in Austria and the Netherlands are progressing rapidly, noted ESM executive director Klaus Regling.
In its 2020 report, the ESM, which manages the repayment of the Cypriot, Greek, Irish, Portuguese and Spanish bailouts, shows a net income of €392.9 million, a sum allocated to its reserve fund.
Mr Donohoe noted that the permanent rescue fund had invested around “ €4.5 billion” of its paid-in capital in ‘green’ or socially responsible bonds.
See the 2020 MoES report: https://bit.ly/3wv8S4N (Original version in French by Mathieu Bion)