Friday, April 5, 2013

Breakdown of Individual EU Member Guarantee Exposure to Cyprus

Below are the European Stability Mechanism loan guarantees that individual EU members are committed for.



Open Europe Blog provided the above chart and has an explainer on what it all means:
ESM loans do not require direct cash from countries but are based off loan guarantees which the eurozone countries give to the ESM. The ESM then issues debt on the market to raise the actual cash to provide the bailout loans. So, not extra cash contribution on the back of this bailout. That said, the ESM does require paid-in capital (€80bn), the payouts of which should have been factored into eurozone government budgets and certainly has been included in the bailed out countries. Also due to a eurostat ruling, each eurozone member's share of ESM bailouts will not count towards its national debt.

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