European Council conclusions: The ESM will have an effective lending capacity of €500 billion
28 March 2011
EU leaders adopted a comprehensive package of measures which will strengthen the economic governance of the European Union, and ensure the lasting stability of the euro area as a whole.
Restoring the health of the banking sector
13. The European Banking Authority and relevant authorities are carrying out stress tests. The European Council underlines the importance of the peer review process to be conducted in close cooperation with national supervisors, the European Systemic Risk Board, the Commission and the European Central Bank in order to increase the consistency and quality of the results. A high level of disclosure for banks will be ensured, including on sovereign debt holdings.
14. Member States will prepare, ahead of the publication of the results, specific and ambitious strategies for the restructuring of vulnerable institutions, including private sector solutions (direct financing from the market or asset sales) but also a solid framework in line with State aid rules for the provision of government support in case of need.
15. As agreed by the European Council in June 2010, the introduction of a global financial transaction tax should be explored and developed further. The European Council notes the intention of the Commission to make a report on taxation of the financial sector by autumn 2011 at the latest.
Strengthening the stability mechanisms of the euro area
16. Recalling the importance of ensuring financial stability in the euro area, the European Council adopted the decision amending the TFEU with regard to the setting up of the European Stability Mechanism. It calls for the rapid launch of national approval procedures, with a view to its entry into force on 1 January 2013.
17. The European Council welcomes the decisions taken by the euro area Heads of State or government on 11 March and endorses the features of the ESM (see annex II). The preparation of the ESM treaty and the amendments to the EFSF agreement, to ensure its €440 billion effective lending capacity, will be finalised so as to allow signature of both agreements at the same time before the end of June 2011.
Full conclusions
© European Council
