Treaty Establishing the European Stability Mechanism (TESM)

To ensure the continued existence of the EMU against the ever-present threat of an economic and financial crisis, as well as to secure the long-term stability of the common currency, the European Council on 28–29 October 2010 agreed to establish a robust framework for crisis management within the euro area (EA) in the medium term. The agreement was based on the task force report on ‘Strengthening Economic Governance in the EU’ and was intended to help overcome financial difficulties as well as prevent them from spreading. At the Brussels Summit on 17 December 2010, the Heads of State and Government agreed to establish a permanent crisis mechanism that would replace the EFSF and the EFSM, aiming to safeguard the financial stability of the EA as a whole.