Euro area Member States agreed on May 10 to set up a special purpose vehicle (SPV) to raise up to EUR 440 bn in support of euro zone Member States, should the need arise. At a meeting on May 17, the SPV was named the “European Financial Stability Facility (EFSF)”. The Eurogroup decided it would be set up under Luxembourg law and that the EFSF shareholders would be the 16 euro area Member States.

In this framework, the EIB’s role is limited to providing technical assistance, for example on legal matters (creation of such an entity under Luxembourg law), to the Commission and euro area Member States. Such services will be provided on a full cost-coverage basis.

The EIB will not be a shareholder in the EFSF; it will not be managing the EFSF and it will not be involved in borrowing front office but it could provide back office services. This role would be similar to the back office support provided already to a number of trust and other funds set up by the Commission and Member States. The EFSF will operate its own funding and lending, risk management, relationships with the rating agencies and have its own executive management.

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