Micheál Martin (Cork South Central, Fianna Fail)
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Question 114: To ask the Minister for Finance if there has been progress made at EU level in relation to extending the size of the European Stability Mechanism; and if he will make a statement on the matter. [16215/12]

Michael Noonan (Limerick City, Fine Gael)
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The European Stability Mechanism (ESM) Treaty, was signed by Euro Area Member States on 2 February 2012. The original version of the treaty was signed on 11 July 2011, but it has been modified to incorporate decisions taken by the Heads of State and Government (HoSG) of the Euro Area on 21 July, 9 December 2011 and 2 March aimed at improving the effectiveness of the mechanism. In order to further improve market confidence and in accordance with the agreement reached at the Euro Summit on 9 December 2011 and reiterated on 2 March 2012, the HoSG have reassessed the adequacy of the overall EFSF/ESM lending ceiling of EUR 500 billion. The Eurogroup concluded its review of the ESM capacity on 30 March and agreed in principle the following:

That the ESM will be the main instrument to finance new programmes as from July 2012. The EFSF will, as a rule, only remain active in financing programmes that have started before that date. For a transitional period until mid-2013, it may engage in new programmes in order to ensure a full fresh lending capacity of EUR 500 billion.

The current overall ceiling for ESM/EFSF lending, as defined in the ESM Treaty, will be raised to EUR 700 billion such that the ESM and the EFSF will be able to operate, if needed, as described above. As of mid-2013, the maximum lending volume of ESM will be EUR 500 billion. The combined lending ceiling of the ESM and the EFSF will continue to be set at EUR 700 billion.

In addition EUR 49 billion out of the EFSM and EUR 53 billion out of the bilateral Greek loan facility have already been paid out to support current programme countries. All together the euro area is mobilising an overall firewall of approximately EUR 800 billion, equivalent to over USD 1 trillion.