‘European Stability Mechanism’, sometimes seen in the news, is an
✓ Correct answer: b) Agency of EU that provides financial assistance to eurozone countries
ExplanationThe European Stability Mechanism (ESM) is a per- manent crisis resolution mechanism for the eurozone.It was established in 2012 to provide financial assistance to euro- zone countries experiencing severe economic difficulties.The ESM offers loans, purchases bonds, and provides credit lines to stabilize member economies and prevent financial conta- gion within the euro area.The European Stability Mechanism (ESM), headquartered in Luxembourg, was established to re- place the European Financial Stability Facility (EFSF) and is funded by eurozone member states.It acts as a ‘lender of last resort’ for eurozone countries, offering loans and other types of support under strict conditions, such as implementing economic reforms.64
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