The European Stability Mechanism (ESM) – What is this bail-out fund? pdf

The European Stability Mechanism is a crisis fund that comes
at the price of €11 billion for Ireland, that EU countries will be able
to gain access to should they ratify the Fiscal Treaty. But will it be
a handy insurance policy for Ireland – or an economic straitjacket?
The European Stability Mechanism (ESM), also known as “the secret treaty”, is part of an overwhelming bunch of initiatives designed by the EU to stabilise the euro.
Essentially, the ESM is a new bail-out fund designed to supply loans to countries in two situations:
(1) where they find themselves in danger of a default, or
(2) where they are found to be in an economic situation that threatens the stability of the euro zone as a whole.
The ESM will be a permanent replacement for an existing temporary fund, the European Financial Stability Fund. The EFSF, which will expire by June 2013, holds €500 billion. The ESM will initially hold €700 billion.

http://www.people.ie/austerity/tabloid.pdf.

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