Since 2008, the budget situation in many EU member states has sharply deteriorated as a consequence of the financial crisis. In 2010, an untenable situation emerged in Greece, presenting potentially serious consequences for the entire euro area.
From June 2010 onward, a number of emergency funds were established on the initiative of the EU member states that have the euro as their currency. The funds are intended for financial support for euro-area countries as Greece, Spain and Ireland.
The countries contributing to the emergency funds have a considerable financial interest. As a member of the euro area, the Netherlands acts as guarantor for many billions of euros in the emergency funds set up by the euro-area countries, and also has billions of euros in loans outstanding to Greece.
The evaluations in 2017 and 2020 of how certain parts of the emergency funds were functioning concluded that the emergency support had helped countries to survive the crisis.
The emergency support provided to euro-area countries since 2010 has been in the form of loans, repayable between now and 2070.
The European emergency funds
From June 2010 onward, a number of emergency funds were established on the initiative of the EU member states that have the euro as their currency. The funds are intended specifically for euro-area countries at risk of finding themselves in the same financial situation as Greece.
- Greek loan facility (GLF, 2010): a package of bilateral loans from euro-area countries, coordinated by the European Commission, combined with support from the IMF;
- European Financial Stabilisation Mechanism (EFSM, 2011): a temporary fund on a community basis (supported by all EU member states together);
- European Financial Stability Facility (EFSF, 2011): a temporary fund for and by euro-area countries on an intergovernmental basis (supported by the countries of the euro area);
- European Stability Mechanism (ESM, 2012): a permanent fund on an intergovernmental basis between the euro-area countries, replacing the temporary EFSF.
We published a report on the use of EU emergency funds in 2015.These emergency funds were used as part of the financial assistance programmes for Greece, Ireland, Portugal, Spain and Cyprus.
The various assistance programmes were largely devised in consultation with the IMF, see table below.
|
Country/programme |
Duration |
Emergency fund used |
Parallel IMF support |
|
Greece 1 |
2010-2012 |
GLF |
Yes |
|
Greece 2 |
2012-2015 |
EFSF |
Yes |
|
Greece bridge financing |
2015 |
EFSM |
No |
|
Greece 3 |
2015-2018 |
ESM |
No |
|
Ireland |
2010-2014 |
EFSF, EFSM |
Yes |
|
Portugal |
2011-2014 |
EFSF, EFSM |
Yes |
|
Spain |
2011-2014 |
ESM |
No |
|
Cyprus |
2013-2016 |
ESM |
Yes |
More information
- Emergency assistance for eurozone countries during the crisis, Netherlands Court of Audit (10-09-2015)
The countries contributing to the emergency funds have a considerable financial interest. As a member of the euro area, the Netherlands acts as guarantor for many billions of euros in the emergency funds set up by the euro-area countries, and also has billions of euros in loans outstanding.
|
Financial interest emergency funds for the Netherlands | ||||
|
Emergency Fund |
Form of financing |
Total financial interest (bn) |
Maximum lending capacity (bn) |
Financial interest of the Netherlands (bn) |
|
EFSM |
Guarantee based on EU budget |
€60 |
€60 |
€2.8 (4.7%) |
|
EFSF |
Guarantees from euro-area countries |
€780 |
Initially €440, later €240 |
€49.6 (6.1%) |
|
ESM |
Capital contributed by euro-area countries |
€80,5 |
€500 |
€4.6 (5.7%) |
|
Callable capital from and to euro-area countries |
€624 |
€35.4 (5.7%) | ||
|
GLF |
Direct loans from euro-area countries |
€52.9 |
€52.9 |
€3.2 (6%) |
The total maximum lending capacity of all four emergency funds together was approximately €850 billion. To give a complete picture of the Netherlands’ financial stake, the following amounts should be added:
- €2.4 billion guarantee for a 4.7% share of the Balance of Payments Programme (comparable to the EFSM, but only for non-euro area EU countries);
- €1.8 billion for 2.2% (Dutch share) of IMF emergency assistance for euro-area countries. The IMF support was granted in addition to the EU emergency assistance.
The Netherlands has guaranteed a total of approximately €90 billion of the emergency assistance funds (including support through the IMF). In addition it has contributed almost €8 billion in the form of direct loans to Greece and capital paid into the ESM.
The assistance programmes have now been concluded and the loans will be repaid in the future.
Repayment of emergency assistance
The emergency assistance received by euro-area countries since 2010 consists of loans that the recipient countries are required to repay.
The ESM website provides an overview of the loans involving a large financial interest and that were granted through the main emergency funds (the EFSF and ESM) and the dates on which Cyprus, Greece, Ireland, Portugal and Spain ultimately have to repay these loans.
The ESM loans to Spain have the earliest repayment date, in 2027. The longest period for repayment is for the EFSF loans to Greece, with the final repayment date being in 2070.