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The ESM. It came into force the 1st July 2013. It is a bailout fund program that followed the temporary European Financial Stability Facility (EFSF) for all member countries of the eurozone. This mechanism will only be activated if it is deemed necessary to safeguard the financial stability of the eurozone.

The preceding mechanism European Financial Stability Facility (EFSF) had available 60 billion euros to lend countries that needed it, later on it joined the European Financial Stabilization Mechanism (EFSM) who controlled up to 440 billion euros.

The 11th July 2011, ministers of finance from the single currency countries created the European Stability Mechanism (ESM), which started to function the 1st of July 2013 with momentary headquarters in Luxembourg; it has 700 billion euros available. The money that the ESM disposes is contributed, proportionally, by the countries from the eurozone: one part is paid-in-capital and the remaining will be lent through the issuance of some special ESM obligations at the capital markets. The major contributors are Germany (almost 190 billion euros), France (142.7 billion euros) and Italy (125.4 billion euros).

Spain will have to contribute with a total of 83.328 billion euros, from which 9.523 will be paid-in-capital, half of which in the year 2013. Different from early mechanisms, the ESM has a permanent character apart from being able to directly bail out banks in trouble under strict conditions, this way the help would be activated when it´s essential to safeguard the stability of the eurozone and avoid the risk of infection from one “sick” (economically troubled) country to the other.

The people in from of ESM are the same as in the euro group; economic ministers of all the euro countries, the president of the ECB (European central bank) and the commissioner for the economic affairs. This mechanism is similar to the international monetary fund (IMF), with the difference that it will only function inside Europe.

The ESM acquires the condition of preferential creditor, which means that it would be one of the first to collect the money lent in case the affected countries have problems returning it; it would be the second one In the return list, while the IMF is the first preferential creditor.