A “control file” is a private record that contains secret information or pictures that are the basis of threatening and blackmailing a person. Perhaps the most famous historical example of control files were the “dirty pictures” that J. Edgar Hoover, former head of the FBI, was said to maintain.
A control file is an important tool of gathering and exercising power. Control files are often used to command loyalty and obedience from the people who manage government, sit in the courts, lead enterprises and direct financial transactions. Control files supercede both law and economics. They are an essential building block of “managed markets” – whether it is the bubbling of the mortgage markets, trillions in collateral fraud, or interest rates that fall to zero.
If “Mr. Global” (my nickname for the powers that be) has a control file chock full of dirty pictures and criminal liabilities then the subject of that file is likely to do whatever Mr. Global says. You and I can lobby a politician, file endless case law in support of our motion before a judge, or explain the prudent man rule and fiduciary principles to a pension manager until we are blue in the face. It will be to no avail. They will follow the direction of the person or organization that controls them through their control files.
From Mr. Global’s point of view, control files are economic. For example, take the $4 trillion that disappeared from the US government from fiscal 1998-2002. Let’s say you need 100 people in the payment and systems areas in the US government senior service and their accounting, systems and banking firms to engineer this move and the related agency securities fraud. Which is cheaper? Arranging control files and a few “accidents” or cutting them in for a % of the profits?
If you want to use your time and money effectively in this world, you are well served to understand the existence and power of control files. This includes understanding one of the primary methods used to create control files – sexual entrapment and addiction. Which means, understanding the most powerful and profitable dirty picture of all – pedophilia.
If you have pictures of family men having sex with a child, they are yours for life. Such people can and will help you engineer the theft of trillions for modest compensation. You control them. They are slaves who are all the more effective as their slavery is invisible. It is secret. No one – not even their closest friends and family – can see who their real bosses are and where their true loyalties lie. No one can fathom that a bank CEO or a senator is, in fact, a slave.
We are dealing in a world increasingly run by databanks of control files. As satellites and drones fan out over our skies, traffic and security cameras go up on streets and buildings and telephone calls are recorded and mined with artificial intelligence, we are well served to appreciate the increasing power and importance of the control file system.
Mmmm, I have come to the realisation that anything could happen but, what won’t happen is collapse, they have too much to lose themselves, unfortunately we, the taxpayer are going to have to fund this. Shame.
Now, if, as I believe the EU does implode things could get very nasty very quickly.
One wonders whether a run on the banks or a run on the supermarkets would be the bet of choice, for me, I wouldn’t put my money on either one! But, fortunately you don’t have to!
Each time you shop buy a little extra, in fact as much as you can, pasta, rice, all tinned goods. Buy the cheapest on offer, don’t worry about you won’t like it, believe me when you are hungry you will eat anything!
Put cash away, not in a bank! Under the mattress! Get lots of cheap candles, night lights things that. If you look carefully you will find a portable camping burner that will burn wood, coal, in fact almost anything, and this will enable you to cook and be warm. And remember burning wood keeps you warm three times, chopping it, carrying it and burning it!
If you need help finding one, ask and I’ll point you in the right direction.
Find a good (or make one) storage place for potatoes then, go directly to a farm shop and buy a huge sack of them.
You need to consider family as well and possibly either doing it as a unit or being prepared to feed the younger ones who won’t be doing any of this.
Also, get some water purification tablets, Boots do them.
Make sure you have enough medication if you need medication, you can stock up from the internet if necessary. Don’t believe what they tell about buying medications off the internet, it’s tosh! Internet medication retailers are canny folk they want your business there are huge profits to be made, it’s in their interest to provide the highest quality available, they want you coming back time and time again, if they bump you off with the first delivery, they only profit from you once and that is NOT in their interest! It’s all a game, look how far pharmacies go to get your business, going to the surgery for getting your script, filling it, it’s big money for them, they don’t want you going elsewhere and giving others your business that’s why the spread nasty little rumours about so and so who bought such and such and it did this and that, it’s all, to quote my learned friend “bollocks”
Think about being able to survive without going to the shops for about a month, the things should have settled down a bit.
For me, I wouldn’t worry too much about spending a little more on the credit card as, I believe that all “debts “apart from mortgages, will be “off “when this fiasco comes crashing down, but think carefully and make that decision for yourselves, it’s just my opinion.
In times to come, we will look back at this period in time, and I think it will be known as “The Great Correction.
The powers that be must, in their own minds and private conversations know just exactly how bad things are going to get, they obviously cannot make that knowledge public for fear of what that might bring about.
As the European Union continues to decline and implosion stares everybody in the face, there will a number of changes that will happen quite quickly, firstly there will be a rush to sell property, so much so that prices will drop in unimaginable amounts, in some cases as much as £100,000 in one go, people will be desperate to leave the country if they possibly can.
Next, jobs will be shed at alarming rates, there will be runs on banks, and food will disappear from supermarket shelves. Petrol, well you can imagine, prices will go through the roof, and I could easily see £10, maybe £15 or more a litre.
Social unrest will make life very difficult and make common theft commonplace with the authorities being helpless to act to prevent it.
There is however an upside to all this but, it is going to take a leap of faith for some people to take this on board.
Firstly: The Elite and Powerful will lose everything, some possibly their lives, I could well imagine somebody stringing up Barosso or Van Rumpuy or any of the others involved!
Their “gold plated” pensions will be worthless, as unfortunately so will everybody else’s.. but, we will as nation start to function again, we will build communities again, we will barter, learn how to get along with each other, something that we have forgotten how to.
Work will change unimaginably too, people will no longer be able to get in their cars, hop on a train and travel great distances to work, they will either work from home or work locally, this will bring immense benefits to the communities, hard to see now, but they will. Pollution will drop dramatically, the air will be cleaner, and it will be much quieter.
Stress level will drop dramatically as will depression and other mentally related illnesses.
Gone will be all the greed and avarice that has blighted our lives for a long time now. Banks, as we know them will be a thing of the past.
We need to start growing our own food again and re-establish manufacturing and restore the education system. Completely overhaul the NHS and the welfare state benefits systems, the police need the backup of the courts who, in turn need the backup of the prison service. The guilty need to know they are guilty and the innocent need to know that the guilty will be punished. People need to be aware that there are consequences to their actions
The dead wood in the civil service needs pruning as do all the quangos. Pensions for the public sector need to be in line with the salaries earnt.
We need to re-educate the feckless and profligate and reward the prudent, allow those who work and save all their lives to enjoy the fruits of their labours.
A complete overhaul of the tax system, we could all pay less tax if our Government didn’t give away our money to other countries.
And one thing we desperately need, a written constitution to make sure incompetent and self-serving greedy politicians can NEVER abuse their electorate in the same way again.
Local communities will elect those that they know and trust to rule over them on matters that affect the community as a whole.
Hopefully, but again I am not holding my breath; people will begin to live by a different code, perhaps on the lines of “Do unto others as you would be done by”?
This is a new beginning, and one we should all embrace heartily.
ESTABLISHING THE EUROPEAN STABILITY MECHANISM (ESM)
BETWEEN THE KINGDOM OF BELGIUM, THE FEDERAL REPUBLIC OF GERMANY,
THE REPUBLIC OF ESTONIA, IRELAND, THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC,
THE ITALIAN REPUBLIC, THE REPUBLIC OF CYPRUS,
THE GRAND DUCHY OF LUXEMBOURG, MALTA,
THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA,
THE PORTUGUESE REPUBLIC, THE REPUBLIC OF SLOVENIA,
THE SLOVAK REPUBLIC, THE REPUBLIC OF FINLAND
THE CONTRACTING PARTIES, the Kingdom of Belgium, the Federal Republic of Germany,
the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French
Republic, the Italian Republic, the Republic of Cyprus, the Grand Duchy of Luxembourg, Malta,
the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of
Slovenia, the Slovak Republic and the Republic of Finland (the “euro area Member States” or
COMMITTED TO ensuring the financial stability of the euro area;
RECALLING the Conclusions of the European Council adopted on 25 March 2011 on the
establishment of a European stability mechanism;
(1) The European Council agreed on 17 December 2010 on the need for euro area Member States
to establish a permanent stability mechanism. This European Stability Mechanism will
assume the tasks currently fulfilled by the European Financial Stability Facility (“EFSF”) and
the European Financial Stabilisation Mechanism (“EFSM”) in providing, where needed,
financial assistance to euro area Member States after June 2013.
(2) On 25 March 2011, the European Council adopted Decision 2011/199/EU amending
Article 136 of the Treaty on the Functioning of the European Union with regard to a stability
mechanism for Member States whose currency is the euro1 adding the following paragraph to
Article 136: “The Member States whose currency is the euro may establish a stability
mechanism to be activated if indispensable to safeguard the stability of the euro area as a
whole. The granting of any required financial assistance under the mechanism will be made
subject to strict conditionality”.
(3) Strict observance of the European Union framework, the integrated macro-economic
surveillance, in particular the Stability and Growth Pact, the macroeconomic imbalances
framework and the economic governance rules of the European Union, should remain the first
line of defence against confidence crises affecting the stability of the euro area as a whole.
1 OJ L 91, 6.4.2011, p. 1.
(4) If indispensable to safeguard the financial stability of the euro area as a whole, access to ESM
financial assistance will be provided on the basis of strict economic policy conditionality
under a macro-economic adjustment programme and a rigorous analysis of public-debt
sustainability. The initial maximum lending volume of the ESM, after the complete run down
of the EFSF, is set at EUR 500 000 million.
(5) All euro area Member States will become ESM Members. As a consequence of joining the
euro area, a Member State of the European Union should become an ESM Member with full
rights and obligations, in line with those of the Contracting Parties.
(6) The ESM will cooperate very closely with the International Monetary Fund (“IMF”) in
providing financial assistance. In all circumstances, active participation of the IMF will be
sought, both at technical and financial level. A euro area Member State requesting financial
assistance from the ESM is expected to address a similar request to the IMF.
(7) Member States of the European Union whose currency is not the euro (“non euro area
Member States”) participating on an ad hoc basis alongside the ESM in a financial assistance
operation for euro area Member States will be invited to participate, as observers, in the ESM
meetings when this financial assistance and its monitoring will be discussed. They will have
access to all information in a timely manner and be properly consulted.
(8) On 20 June 2011, the representatives of the Governments of the Member States of
the European Union authorised the Contracting Parties of this Treaty to request the
European Commission and the European Central Bank (“ECB”) to perform the tasks provided
for in this Treaty.
(9) In its statement of 28 November 2010, the Euro Group stated that standardised and identical
Collective Action Clauses (“CACs”) will be included, in such a way as to preserve market
liquidity, in the terms and conditions of all new euro area government bonds starting in
July 2013. Moreover, the term sheet on the ESM, as endorsed by the European Council
on 25 March 2011, stated that the detailed legal arrangements for including CACs in euro area
government securities will be finalised by the end of 2011.
(10) Like the IMF, the ESM will provide financial assistance to an ESM Member when its regular
access to market financing is impaired. Reflecting this, Heads of State or Government have
stated that the ESM will enjoy preferred creditor status in a similar fashion to IMF, while
accepting preferred creditor status of the IMF over the ESM. This status shall be effective as
of 1 July 2013. In the unlikely event of ESM financial assistance following a European
financial assistance programme existing at the time of the signature of this Treaty, ESM will
enjoy the same seniority as all other loans and obligations of the beneficiary ESM Member,
with the exception of the IMF loans.
(11) The euro area Member States will support equivalent creditor status of the ESM and that of
other Member States of the European Union lending bilaterally alongside the ESM.
(12) Disputes concerning the interpretation and application of this Treaty arising between the
Contracting Parties or between the Contracting Parties and the ESM should be submitted to
the jurisdiction of the Court of Justice of the European Union, in accordance with Article 273
of the Treaty on the Functioning of the European Union (“TFEU”).
(13) Post-programme surveillance will be carried out by the European Commission and by
the Council of the European Union within the framework laid down in Articles 121
and 136 TFEU,
HAVE AGREED AS FOLLOWS:
MEMBERSHIP AND PURPOSE
Establishment and members
1. By this Treaty, the Contracting Parties establish among themselves an international financial
institution, to be named the “European Stability Mechanism” (“ESM”).
2. The Contracting Parties are ESM Members.
1. Membership in the ESM shall be open to the other Member States of the European Union as
from the entry into force of the decision of the Council of the European Union taken in accordance
with Article 140(2) TFEU to abrogate their derogation from adopting the euro.
2. New ESM Members shall be admitted on the same terms and conditions as existing
ESM Members, in accordance with Article 39.
3. A new member acceding to the ESM after its establishment shall receive shares in the ESM in
exchange for its capital contribution, calculated in accordance with the contribution key provided
for in Article 11.
The purpose of the ESM shall be to mobilise funding and provide financial assistance, under strict
economic policy conditionality, to the benefit of ESM Members which are experiencing or are
threatened by severe financing problems, if indispensable to safeguard the financial stability of the
euro area as a whole. For this purpose, the ESM shall be entitled to raise funds by issuing financial
instruments or by entering into financial or other agreements or arrangements with ESM Members,
financial institutions or other third parties.
Structure and voting rules
1. The ESM shall have a Board of Governors and a Board of Directors, as well as a
Managing Director and other dedicated staff as may be considered necessary.
2. The decisions of the Board of Governors and the Board of Directors shall be taken by mutual
agreement, qualified majority or simple majority as specified in this Treaty. In respect of all
decisions, a quorum of 2/3 of the members with voting rights representing at least 2/3 of the voting
rights must be present.
3. The adoption of a decision by mutual agreement requires the unanimity of the members
participating in the vote. Abstentions do not prevent the adoption of a decision by
4. The adoption of a decision by qualified majority requires 80 % of the votes cast.
5. The adoption of a decision by simple majority requires a majority of the votes cast.
6. The voting rights of each ESM Member, as exercised by its appointee or by the latter’s
representative on the Board of Governors or Board of Directors, shall be equal to the number of
shares allocated to it in the authorised capital stock of the ESM as set out in Annex II.
7. If any ESM Member fails to pay any part of the amount due in respect of its obligations in
relation to paid-in shares or calls of capital under Articles 8, 9 and 10, or in relation to the
reimbursement of the financial assistance under Article 14 or 15, such ESM Member shall be
unable, for so long as such failure continues, to exercise any of its voting rights. The voting
thresholds shall be recalculated accordingly.
Board of Governors
1. Each ESM Member shall appoint a Governor and an alternate Governor. Such appointments
are revocable at any time. The Governor shall be a member of the government of that ESM Member
who has responsibility for finance. The alternate Governor shall have full power to act on behalf of
the Governor when the latter is not present.
2. The Board of Governors shall decide either to be chaired by the President of the Euro Group,
as referred to in Protocol (No 14) on the Euro Group annexed to the Treaty on the European Union
and to the TFEU or to elect a Chairperson and a Vice-Chairperson from among its members for a
term of two years. The Chairperson and the Vice-Chairperson may be re-elected. A new election
shall be organised without delay if the incumbent no longer holds the function needed for being
3. The Member of the European Commission in charge of economic and monetary affairs and
the President of the ECB, as well as the President of the Euro Group (if he or she is not the
Chairperson or a Governor) may participate in the meetings of the Board of Governors as observers.
4. Representatives of non-euro area Member States participating on an ad hoc basis alongside
the ESM in a financial assistance operation for a euro area Member State shall also be invited to
participate, as observers, in the meetings of the Board of Governors when this financial assistance
and its monitoring will be discussed.
5. Other persons, including representatives of institutions or organisations, such as the IMF, may
be invited by the Board of Governors to attend meetings as observers on an ad hoc basis.
6. The Board of Governors shall take the following decisions by mutual agreement:
(a) to issue new shares on terms other than at par, in accordance with Article 8(2);
(b) to make the capital calls, in accordance with Article 9(1);
(c) to change the authorised capital stock and adapt the maximum lending volume of the ESM, in
accordance with Article 10(1);
(d) to take into account a possible update of the key for the subscription of the ECB capital, in
accordance with Article 11(3), and the changes to be made to Annex I in accordance with
(e) to grant financial assistance by the ESM, including the economic policy conditionality as
stated in the memorandum of understanding referred to in Article 13(3), and to establish the
financial terms and conditions, and the choice of instruments, in accordance with Articles 12
(f) to give a mandate to the European Commission to negotiate, in liaison with the ECB, the
economic policy conditionality attached to each financial assistance, in accordance with
(g) to change the pricing structure and pricing policy for financial assistance, in accordance with
(h) to change the list of financial assistance instruments that may be used by the ESM, in
accordance with Article 16;
(i) to establish the modalities of the transfer of EFSF support to the ESM, in accordance with
(j) to approve the application for membership of the ESM by new members, referred to in
(k) to make adaptations to this Treaty as a direct consequence of the accession of new members,
including changes to be made to the distribution of capital among ESM Members and the
calculation of such a distribution as a direct consequence of the accession of a new member to
the ESM, in accordance with Article 39; and
(l) to delegate to the Board of Directors the tasks listed in this Article.
7. The Board of Governors shall take the following decisions by qualified majority:
(a) to set out the detailed technical terms of accession of a new member to the ESM, in
accordance with Article 39;
(b) whether to be chaired by the President of the Euro Group or to elect, by qualified majority, the
Chairperson and Vice-Chairperson of the Board of Governors, in accordance with
(c) to set out by-laws of the ESM and the rules of procedure applicable to the Board of Governors
and Board of Directors (including the right to establish committees and subsidiary bodies), in
accordance with paragraph 9;
(d) to determine the list of activities incompatible with the duties of a Director or an alternate
Director, in accordance with Article 6(8);
(e) to appoint and to end the term of office of the Managing Director, in accordance with
(f) to establish other funds, in accordance with Article 20;
(g) on the actions to be taken for recovering a debt from an ESM Member, in accordance with
Article 21(2) and (3);
(h) to approve the annual accounts of the ESM, in accordance with Article 23(1);
(i) to appoint the members of the Internal Auditing Board, in accordance with Article 24;
(j) to approve the external auditors, in accordance with Article 25;
(k) to waive the immunity of the Chairperson of the Board of Governors, a Governor, alternate
Governor, Director, alternate Director or the Managing Director, in accordance with
(l) to determine the taxation regime applicable to the ESM staff, in accordance with
(m) on a dispute, in accordance with Article 32(2); and
(n) any other necessary decision not explicitly provided for by this Treaty.
8. The Chairperson shall convene and preside over the meetings of the Board of Governors.
The Vice-Chairperson shall preside over these meetings when the Chairperson is unable
9. The Board of Governors shall adopt their rules of procedure and the by-laws of the ESM.
Board of Directors
1. Each Governor shall appoint one Director and one alternate Director from among people of
high competence in economic and financial matters. Such appointments shall be revocable at any
time. The alternate Directors shall have full power to act on behalf of the Director when the latter is
2. The Member of the European Commission in charge of economic and monetary affairs and
the President of the ECB may appoint one observer each.
3. Representatives of non-euro area Member States participating on an ad hoc basis alongside
the ESM in a financial assistance operation for a euro area Member State shall also be invited to
participate, as observers, in the meetings of the Board of Directors when this financial assistance
and its monitoring will be discussed.
4. Other persons, including representatives of institutions or organisations, may be invited by the
Board of Governors to attend meetings as observers on an ad hoc basis.
5. The Board of Directors shall take decisions by qualified majority, unless otherwise stated in
this Treaty. Decisions to be taken on the basis of powers delegated by the Board of Governors shall
be adopted in accordance with the relevant voting rules set in Article 5(6) and (7).
6. Without prejudice to the powers of the Board of Governors as set out in Article 5, the Board
of Directors shall ensure that the ESM is run in accordance with this Treaty and the by-laws of the
ESM adopted by the Board of Governors. It shall take decisions as provided for in this Treaty or
which are delegated to it by the Board of Governors.
7. Any vacancy in the Board of Directors shall be immediately filled in accordance with
8. The Board of Governors shall lay down what activities are incompatible with the duties of a
Director or an alternate Director, the by-laws of the ESM and rules of procedure of the Board
1. The Managing Director shall be appointed by the Board of Governors from among candidates
having the nationality of an ESM Member, relevant international experience and a high level of
competence in economic and financial matters. Whilst holding office, the Managing Director may
not be a Governor or Director or an alternate of either.
2. The term of office of the Managing Director shall be five years. He or she may be
re-appointed once. The Managing Director shall, however, cease to hold office when the Board of
Governors so decides.
3. The Managing Director shall chair the meetings of the Board of Directors and shall participate
in the meetings of the Board of Governors.
4. The Managing Director shall be chief of the staff of the ESM. He or she shall be responsible
for organising, appointing and dismissing staff in accordance with staff rules to be adopted by the
Board of Directors.
5. The Managing Director shall be the legal representative of the ESM and shall conduct, under
the direction of the Board of Directors, the current business of the ESM.
Authorised capital stock
1. The authorised capital stock shall be EUR 700 000 million. It shall be divided into seven
million shares, having a nominal value of EUR 100 000 each, which shall be available for
subscription according to the initial contribution key provided for in Article 11 and calculated in
2. The authorised capital stock shall be divided into paid-in shares and callable shares. The
initial total aggregate nominal value of paid-in shares shall be EUR 80 000 million. Shares of
authorised capital stock initially subscribed shall be issued at par. Other shares shall be issued at
par, unless the Board of Governors decides to issue them in special circumstances on other terms.
3. Shares of authorised capital stock shall not be encumbered or pledged in any manner
whatsoever and they shall not be transferable, with the exception of transfers for the purposes of
implementing adjustments of the contribution key provided for in Article 11 to the extent necessary
to ensure that the distribution of shares corresponds to the adjusted key.
4. ESM Members hereby irrevocably and unconditionally undertake to provide their
contribution to the authorised capital stock, in accordance with their contribution key in Annex I.
They shall meet all capital calls on a timely basis in accordance with the terms set out in this Treaty.
5. The liability of each ESM Member shall be limited, in all circumstances, to its portion of the
authorised capital stock at its issue price. No ESM Member shall be liable, by reason of its
membership, for obligations of the ESM. The obligations of ESM Members to contribute to the
authorised capital stock in accordance with this Treaty are not affected if any such ESM Member
becomes eligible for, or is receiving, financial assistance from ESM.
1. The Board of Governors may call in authorised unpaid capital at any time and set an
appropriate period of time for its payment by the ESM Members.
2. The Board of Directors may call in authorised unpaid capital by simple majority decision to
restore the level of paid-in capital if the amount of the latter is reduced by the absorption of losses
below the level established in Article 8(2), as may be amended by the Board of Governors
following the procedure provided for in Article 10, and set an appropriate period of time for its
payment by the ESM Members.
3. The Managing Director shall call authorised unpaid capital in a timely manner if needed to
avoid the ESM being in default of any scheduled or other payment obligation due to ESM creditors.
The Managing Director shall inform the Board of Directors and the Board of Governors of any such
call. When a potential shortfall in ESM funds is detected, the Managing Director shall make such
capital call(s) as soon as possible with a view to ensuring that the ESM shall have sufficient funds
to meet payments due to creditors in full on their due date. ESM Members hereby irrevocably and
unconditionally undertake to pay on demand any capital call made on them by the
Managing Director pursuant to this paragraph, such demand to be paid within seven days of receipt.
4. The Board of Directors shall adopt the detailed terms and conditions which shall apply to
calls on capital pursuant to this Article.
Changes in authorised capital stock
1. The Board of Governors shall review regularly and at least every five years the maximum
lending volume and the adequacy of the authorised capital stock of the ESM. It may decide to
change the authorised capital stock and amend Article 8 and Annex II accordingly. Such decision
shall enter into force after the ESM Members have notified the Depositary of the completion of
their applicable national procedures. The new shares shall be allocated to the ESM Members
according to the contribution key provided for in Article 11 and in Annex I.
2. The Board of Directors shall adopt the detailed terms and conditions which shall apply to all
or any capital changes made under paragraph 1.
3. Upon a Member State of the European Union becoming a new ESM Member, the authorised
capital stock of the ESM shall be automatically increased by multiplying the respective amounts
then prevailing by the ratio, within the adjusted contribution key provided for in Article 11, between
the weighting of the new ESM Member and the weighting of the existing ESM Members.
1. The contribution key for subscribing to ESM authorised capital stock shall, subject to
paragraphs 2 and 3, be based on the key for subscription, by the national central banks of
ESM Members, of the ECB’s capital pursuant to Article 29 of Protocol (No 4) on the Statute of the
European System of Central Banks and of the European Central Bank (the “ESCB Statute”)
annexed to the Treaty on European Union and to the TFEU.
2. The contribution key for the subscription of the ESM authorised capital stock is specified in
3. The contribution key for the subscription of the ESM authorised capital stock shall be
a) a Member State of the European Union becomes a new ESM Member and the ESM’s
authorised capital stock automatically increases, as specified in Article 10(3); or
b) the twelve year temporary correction applicable to an ESM Member established in accordance
with Article 37 ends.
4. The Board of Governors may decide to take into account possible updates to the key for the
subscription of the ECB’s capital referred to in paragraph 1 when the contribution key is adjusted in
accordance with paragraph 3 or when there is a change in the authorised capital stock, as specified
in Article 10(1).
5. When the contribution key for the subscription of the ESM authorised capital stock is
adjusted, the ESM Members shall transfer among themselves authorised capital stock to the extent
necessary to ensure that the distribution of authorised capital stock corresponds to the adjusted key.
6. Annex I shall be amended upon decision by the Board of Governors upon any adjustment
referred to in this Article.
7. The Board of Directors shall take all other measures necessary for the application of
1. If indispensable to safeguard the financial stability of the euro area as a whole, the ESM may
provide financial assistance to an ESM Member, subject to strict economic policy conditionality
under a macro-economic adjustment programme, commensurate with the severity of the economic
and financial imbalances experienced by that ESM Member.
2. An adequate and proportionate form of private-sector involvement shall be sought on a
case-by-case basis where financial assistance is received by an ESM Member, in line with IMF
practice. The nature and the extent of this involvement shall depend on the outcome of a debt
sustainability analysis and shall take due account of the risk of contagion and potential spill-over
effects on other Member States of the European Union and third countries. If, on the basis of this
analysis, it is concluded that a macro-economic adjustment programme can realistically restore
public debt to a sustainable path, the beneficiary ESM Member shall take initiatives aimed at
encouraging the main private investors to maintain their exposure. Where it is concluded that a
macro-economic adjustment programme cannot realistically restore the public debt to a sustainable
path, the beneficiary ESM Member shall be required to engage in active negotiations in good faith
with its non-official creditors to secure their direct involvement in restoring debt sustainability. In
the latter case, the granting of financial assistance will be contingent on the ESM Member having a
credible plan for restoring debt sustainability and demonstrating sufficient commitment to ensure
adequate and proportionate private-sector involvement. Progress in the implementation of the plan
will be monitored under the programme and will be taken into account in the decisions
3. Collective action clauses shall be included in all new euro area government securities, with
maturity above one year, from July 2013, in a standardised manner which ensures that their legal
impact is identical.
Procedure for granting financial assistance
1. An ESM Member may address a request for financial assistance to the Chairperson of the
Board of Governors. On receipt of such a request, the Chairperson of the Board of Governors shall
entrust the European Commission, in liaison with the ECB, with the following tasks:
(a) to assess the existence of a risk to the financial stability of the euro area as a whole;
(b) to undertake – wherever possible, together with the IMF – a rigorous analysis of the debt
sustainability of the ESM Member concerned;
(c) to assess the actual financing needs of the ESM Member concerned and the nature of the
private sector involvement required, in accordance with Article 12(2).
2. On the basis of the assessment referred to in paragraph 1, the Board of Governors may decide
to grant, in principle, financial assistance to the ESM Member concerned.
3. If a decision pursuant to paragraph 2 is adopted, the Board of Governors shall entrust the
European Commission with the task of negotiating with the ESM Member concerned – wherever
possible together with the IMF, and in liaison with the ECB – a memorandum of understanding
(the “MoU”) detailing the economic policy conditionality, contained in a macro-economic
adjustment programme and attached to the financial assistance. In parallel, the Managing Director
of the ESM shall prepare a proposal for financial assistance agreement, including the financial
terms and conditions and the choice of instruments, to be adopted by the Board of Governors.
The MoU shall be fully consistent with the measures of economic policy coordination provided for
in the TFEU, in particular with any act of European Union law, including any opinion, warning,
recommendation or decision addressed to the ESM Member concerned.
4. The European Commission shall sign the MoU on behalf of the ESM, subject to prior
compliance with the conditions set out in paragraph 3 and approval by the Board of Governors.
5. The Board of Directors shall approve the financial assistance agreement detailing the
technical aspects of the financial assistance to be provided and the disbursement of the first tranche
of the assistance.
6. The ESM shall establish an appropriate warning system to ensure that it receives the
repayments due by the ESM Member under financial assistance in a timely manner.
7. The European Commission – wherever possible together with the IMF, and in liaison with the
ECB – shall be entrusted with monitoring the compliance with the economic policy conditionality
attached to the financial assistance. On the basis of the report of the European Commission, the
Board of Directors shall decide, by mutual agreement, on the disbursement of the tranches of the
financial assistance subsequent to the first tranche.
8. The Board of Directors shall adopt the detailed guidelines which shall apply to the
disbursements of financial assistance.
ESM stability support
1. The Board of Governors may decide to grant short-term or medium-term stability support in
the form of a loan to an ESM Member as financial assistance, in accordance with Article 12.
2. The technical terms and conditions of each loan shall be specified in a financial assistance
agreement, to be signed by the Managing Director.
3. The ESM stability support pricing shall cover ESM funding costs plus an additional margin
determined by the Board of Governors. The pricing structure is detailed in the pricing policy in
Annex III. The pricing policy shall be reviewed regularly by the Board of Governors.
4. The Board of Governors may decide to change the pricing structure and pricing policy and
amend Annex III accordingly.
Primary market support facility
1. The Board of Governors may decide, as an exception, to arrange for the purchase of bonds of
an ESM Member on the primary market, in accordance with Article 12 and with the objective of
maximising the cost efficiency of the financial assistance.
2. The technical terms and conditions under which the bond purchase is conducted shall be
specified in the financial assistance agreement, to be signed by the Managing Director.
3. The Board of Directors shall adopt the detailed guidelines on the modalities for implementing
the primary market support facility.
Review of the list of financial assistance instruments
The Board of Governors may review the list of financial assistance instruments provided for in
Articles 14 and 15 and decide to make changes to it.
1. The ESM shall be empowered to borrow on the capital markets from banks, financial
institutions or other persons or institutions for the performance of its purpose.
2. The modalities of the borrowing operations shall be determined by the Managing Director, in
accordance with detailed guidelines to be adopted by the Board of Directors.
3. The ESM shall use appropriate risk management tools, which shall be reviewed regularly by
the Board of Directors.
The Managing Director shall implement a prudent investment policy for the ESM, so as to ensure
its highest creditworthiness, in accordance with guidelines to be adopted and reviewed regularly by
the Board of Directors. The ESM shall be entitled to use part of the return on its investment
portfolio to cover its operating and administrative costs.
1. As long as the ESM has not provided financial assistance to one of its members, the proceeds
from the investment of the ESM paid-in capital shall be returned to the ESM Members according to
their respective shares, after deductions for operational costs, provided that the targeted effective
lending capacity is fully available.
2. The Board of Directors may decide, by simple majority, to distribute a dividend to the
ESM Members if the amount of paid-in capital and the reserve fund exceeds the level required to
maintain the lending capacity of the ESM and proceeds from the investment are not required to
avoid a payment shortfall to creditors. Dividends are distributed pro rata to the shares.
3. The Managing Director shall implement the dividend policy for the ESM in accordance with
guidelines to be adopted by the Board of Directors.
Reserve and other funds
1. The Board of Governors shall establish a reserve fund and, where appropriate, other funds.
2. Without prejudice to Article 19, the net income generated by the ESM operations and the
proceeds of the financial sanctions received from the ESM Members under the multilateral
surveillance procedure, the excessive deficit procedure and the macro-economic imbalances
procedure established under the TFEU shall be put aside in a reserve fund.
3. The resources of the reserve fund shall be invested in accordance with guidelines to be
adopted by the Board of Directors.
4. The Board of Directors shall adopt such rules as may be required for the establishment,
administration and use of other funds.
Coverage of losses
1. Losses arising in the ESM operations shall be charged:
(a) firstly, against the reserve fund;
(b) secondly, against the paid-in capital; and
(c) lastly, against an appropriate amount of the authorised unpaid capital, which shall be called in
accordance with Article 9(3).
2. If an ESM Member fails to meet the required payment under a capital call made pursuant to
Article 9(2) or (3), a revised increased capital call shall be made to all ESM Members with a view
to ensuring that the ESM receives the total amount of paid-in capital needed. The Board of
Governors shall decide an appropriate course of action for ensuring that the ESM Member
concerned settles its debt to the ESM within a reasonable period of time. The Board of Governors
shall be entitled to require the payment of default interest on the overdue amount.
3. When an ESM Member settles its debt to the ESM, as referred to in paragraph 2, the excess
capital shall be returned to the other ESM Members in accordance with rules to be adopted by the
Board of Governors.
The Board of Directors shall approve the ESM budget annually.
1. The Board of Governors shall approve the annual accounts of the ESM.
2. The ESM shall publish an annual report containing an audited statement of its accounts and
shall circulate to ESM Members a quarterly summary statement of its financial position and a profit
and loss statement showing the results of its operations.
Internal Auditing Board
1. The Internal Auditing Board (the “IAB”) shall consist of three members appointed by the
Board of Governors for their competence in auditing and financial matters.
2. The members of the IAB shall be independent. They shall not seek nor take instructions from
the ESM governing bodies, the ESM Members or any other public or private body.
3. The IAB shall inspect the ESM accounts and verify that the operational accounts and balance
sheet are in order. It shall have full access to any document of the ESM needed for the
implementation of its tasks.
4. The IAB shall send an annual report to the Board of Governors in which it ascertains whether:
(a) the balance sheet and operational accounts are in accordance with the books; and
(b) the balance sheet and operational accounts give an accurate and true picture of the financial
position of the ESM in respect of its assets and liabilities, the results of its operations and its
cash flow for the financial year under review.
5. The operation of the ESM shall comply with the principles of sound financial and
The accounts of the ESM shall be audited by independent external auditors approved by the Board
of Governors. The auditors shall have full power to examine all books and accounts of the ESM and
obtain full information about its transactions.
1. The ESM shall have its seat and principal office in Luxembourg.
2. The ESM may establish a liaison office in Brussels.
Legal status, privileges and immunities
1. To enable the ESM to fulfil its purpose, the legal status and the privileges and immunities set
out in this Article shall be accorded to the ESM in the territory of each ESM Member. The ESM
shall endeavour to obtain recognition of its legal status and of its privileges and immunities in other
territories in which it performs functions or holds assets.
2. The ESM shall have full legal personality; it shall have full legal capacity to:
(a) acquire and dispose of movable and immovable property;
(c) be a party to legal proceedings; and
(d) enter into a headquarter agreement and/or protocols as necessary for ensuring that its legal
status and its privileges and immunities are recognised and enforced.
3. The ESM, its property, funding and assets, wherever located and by whomsoever held, shall
enjoy immunity from every form of judicial process except to the extent that the ESM expressly
waives its immunity for the purpose of any proceedings or by the terms of any contract, including
the documentation of the funding instruments.
4. The property, funding and assets of the ESM shall, wherever located and by whomsoever
held, be immune from search, requisition, confiscation, expropriation or any other form of seizure,
taking or foreclosure by executive, judicial, administrative or legislative action.
5. The archives of the ESM and all documents belonging to the ESM or held by it, shall
6. The premises of the ESM shall be inviolable.
7. The official communications of the ESM shall be accorded by each ESM Member and by
each state which has recognised the legal status and the privileges and immunities of the ESM, the
same treatment as it accords to the official communications of an ESM Member.
8. To the extent necessary to carry out the activities provided for in this Treaty, all property,
funding and assets of the ESM shall be free from restrictions, regulations, controls and moratoria of
9. The ESM shall be exempted from any requirement to be authorised or licensed as a credit
institution, investment services provider or other authorised licensed or regulated entity under the
laws of each ESM Member.
Staff of the ESM
The Board of Directors shall lay down the conditions of employment of the Managing Director and
other staff of the ESM.
The Members or former Members of the Board of Governors and of the Board of Directors and any
other persons who work or have worked for or in connection with the ESM shall not disclose
information that is subject to professional secrecy. They shall be required, even after their duties
have ceased, not to disclose information of the kind covered by the obligation of
Immunities of persons
1. In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate
Governors, Directors, alternate Directors, as well as the Managing Director and other staff members
shall be immune from legal proceedings with respect to acts performed by them in their official
capacity and shall enjoy inviolability in respect of their official papers and documents.
2. The Board of Governors may waive to such extent and upon such conditions as it determines
any of the immunities conferred under this Article in respect of the Chairperson of the Board of
Governors, a Governor, an alternate Governor, a Director, an alternate Director or the
3. The Managing Director may waive any such immunity in respect of any member of the staff
of the ESM other than himself or herself.
4. Each ESM Member shall promptly take the action necessary for the purposes of giving effect
to this Article in the terms of its own law and shall inform the ESM accordingly.
Exemption from taxation
1. Within the scope of its official activities, the ESM, its assets, income, property and its
operations and transactions authorised by this Treaty shall be exempt from all direct taxes.
2. The ESM Members shall, wherever possible, take the appropriate measures to remit or refund
the amount of indirect taxes or sales taxes included in the price of movable or immovable property
where the ESM makes, for its official use, substantial purchases, the price of which includes taxes
of this kind.
3. No exemption shall be granted in respect of taxes and dues which amount merely to charges
for public utility services.
4. Goods imported by the ESM and necessary for the exercise of its official activities shall be
exempt from all import duties and taxes and from all import prohibitions and restrictions.
5. Staff of the ESM shall be subject to an internal tax for the benefit of the ESM on salaries and
emoluments paid by the ESM, subject to rules to be adopted by the Board of Governors. From the
date on which this tax is applied, such salaries and emoluments shall be exempt from national
6. No taxation of any kind shall be levied on any obligation or security issued by the ESM
including any interest or dividend thereon by whomsoever held:
(a) which discriminates against such obligation or security solely because of its origin; or
(b) if the sole jurisdictional basis for such taxation is the place or currency in which it is issued,
made payable or paid, or the location of any office or place of business maintained by
Interpretation and dispute settlement
1. Any question of interpretation or application of the provisions of this Treaty and the by-laws
of the ESM arising between any ESM Member and the ESM, or between ESM Members, shall be
submitted to the Board of Directors for its decision.
2. The Board of Governors shall decide on any dispute arising between an ESM Member and
the ESM, or between ESM Members, in connection with the interpretation and application of this
Treaty, including any dispute about the compatibility of the decisions adopted by the ESM with this
Treaty. The votes of the member(s) of the Board of Governors of the ESM Member(s) concerned
shall be suspended when the Board of Governors votes on such decision and the voting threshold
needed for the adoption of that decision shall be recalculated accordingly.
3. If an ESM Member contests the decision referred to in paragraph 2, the dispute shall be
submitted to the Court of Justice of the European Union. The judgement of the Court of Justice of
the European Union shall be binding on the parties in the procedure, which shall take the necessary
measures to comply with the judgment within a period to be decided by said Court.
The ESM shall be entitled, for the furtherance of its purposes, to cooperate, within the terms of this
Treaty, with the IMF, any non-euro area Member State which provides financial assistance on an
ad hoc basis and any international organisation or entity having specialised responsibilities in
Relation with EFSF lending
During the transitional phase spanning the period from June 2013 until the complete run-down of
the EFSF, the consolidated ESM and EFSF lending shall not exceed EUR 500 000 million, without
prejudice to the regular review of the adequacy of the maximum lending volume in accordance with
Article 10. The Board of Directors shall adopt detailed guidelines on the calculation of the forward
commitment capacity to ensure that the consolidated lending ceiling is not breached.
Transfer of EFSF supports
1. By way of derogation from Article 13, the Board of Governors may decide that the EFSF
commitments to provide financial assistance to an ESM Member under its agreement with that
member shall be assumed by the ESM as far as such commitments relate to undisbursed and
unfunded parts of loan facilities.
2. The ESM may, if authorised by its Board of Governors, acquire the rights and assume the
obligations of the EFSF, in particular in respect of all or part of its outstanding rights and
obligations under, and related to, its existing loan facilities.
3. The Board of Governors shall adopt the detailed modalities necessary to give effect to the
transfer of the obligations from the EFSF to the ESM, as referred to in paragraph 1 and any transfer
of rights and obligations as described in paragraph 2.
Payment of the initial capital
1. Without prejudice to paragraph 2, payment of paid-in shares of the amount initially
subscribed by each ESM Member shall be made in five annual instalments of 20 % each of the total
amount. The first instalment shall be paid by each ESM Member within fifteen days of the date of
entry into force of this Treaty, but not earlier than 2 January 2013. The remaining four instalments
shall each be payable on the first, second, third and fourth anniversary of the payment date of the
2. During the five-year period of capital payment by instalments, ESM Members shall provide,
in a timely manner prior to the issuance date, appropriate instruments in order to maintain a
minimum 15 % ratio between paid-in capital and the outstanding amount of ESM issuances.
Temporary correction of the contribution key
1. At inception, the ESM Members shall subscribe the authorised capital stock on the basis of
the initial contribution key as specified in Annex I. The temporary correction included in this initial
contribution key shall apply for a period of twelve years after the date of adoption of the euro by the
ESM Member concerned.
2. If a new ESM Member’s gross domestic product (GDP) per capita at market prices in euro in
the year immediately preceding its accession to the ESM is less than 75 % of the European Union
average GDP per capita at market prices, then its contribution key for subscribing to ESM
authorised capital stock, determined in accordance with Article 10, shall benefit from a temporary
correction and equal the sum of:
a) 25 % of the percentage share in the ECB capital of the national central bank of that
ESM Member, determined in accordance with Article 29 of the ESCB Statute; and
b) 75 % of that ESM Member’s percentage share in the gross national income (GNI) at market
prices in euro of the euro area in the year immediately preceding its accession to the ESM.
The percentages referred to in points (a) and (b) shall be rounded up or down to the nearest multiple
of 0,0001 percentage points. The statistical terms will be those published by Eurostat.
3. The temporary correction referred to in paragraph 2 shall apply for a period of twelve years
from the date of adoption of the euro by the ESM Member concerned.
4. As a result of the temporary correction of the key, the relevant proportion of shares allocated
to an ESM Member pursuant to paragraph 2 shall be reallocated amongst the ESM Members not
benefiting from a temporary correction on the basis of their shareholding in the ECB, determined in
accordance with Article 29 of the ESCB Statute, subsisting immediately prior to the issue of shares
to the acceding ESM Member.
1. Each ESM Member shall designate its Governor and alternate Governor within the two weeks
of the entry into force of this Treaty.
2. The Board of Governors shall appoint the Managing Director and each Governor shall appoint
a Director and an alternate Director within the two months of the entry into force of this Treaty.
This Treaty shall be open for accession by other Member States of the European Union in
accordance with Article 2 upon application for membership that any such Member State of the
European Union will file with the ESM after the adoption by the Council of the European Union of
the decision to abrogate its derogation from adopting the euro in accordance with Article 140(2)
TFEU. The Board of Governors will approve the application for accession of the new ESM Member
and the detailed technical terms related thereto, as well as the adaptations to be made to this Treaty
as a direct consequence of the accession. Following the approval of the application for membership
by the Board of Governors, new ESM Members will accede upon the deposit of the instruments of
accession with the Depositary, who shall notify other ESM Members thereof.
The following Annexes to this Treaty shall constitute an integral part thereof:
1) Annex I: Contribution key of the ESM;
2) Annex II: Subscriptions to the authorised capital stock; and
3) Annex III: Pricing policy.
This Treaty shall be deposited with the General Secretariat of the Council of the European Union
(“the Depositary”), which shall communicate certified copies of this Treaty to all the signatories.
Ratification, approval or acceptance
1. This Treaty shall be subject to ratification, approval or acceptance by the signatories.
Instruments of ratification, approval or acceptance shall be deposited with the Depositary no later
than 31 December 2012.
2. The Depositary shall notify the other signatories of each deposit and the date thereof.
Entry into force
1. This Treaty shall enter into force on the first day of the second month following the date when
instruments of ratification, approval or acceptance have been deposited by signatories whose initial
subscriptions represent no less than 95 % of the total subscriptions set forth in Annex II. Where
appropriate, the list of ESM Members shall be adjusted; the key in Annex I shall then be
recalculated and the total authorised capital stock in Article 8(1) and Annex II and the initial total
aggregated nominal value of paid-in shares in Article 8(2) shall be reduced accordingly.
2. For each signatory which thereafter deposits its instrument of ratification, approval or
acceptance, this Treaty shall enter into force on the twentieth day following the date of deposit.
3. For each State which accedes to this Treaty in accordance with Article 39, this Treaty shall
enter into force on the twentieth day following the deposit of its instrument of accession.
Done at Brussels on the eleventh day of July in the year two thousand and eleven in a single
original, whose Dutch, English, Estonian, Finnish, French, German, Greek, Irish, Italian, Maltese,
Portuguese, Slovak, Slovenian, Spanish and Swedish texts are equally authentic, which shall be
deposited in the archives of the Depositary which shall transmit a duly certified copy to each of the
T/ESM/Annex I/en 1
Contribution Key of the ESM
ESM Member ESM key (%)
Kingdom of Belgium 3,4771
Federal Republic of Germany 27,1464
Republic of Estonia 0,1860
Hellenic Republic 2,8167
Kingdom of Spain 11,9037
French Republic 20,3859
Italian Republic 17,9137
Republic of Cyprus 0,1962
Grand Duchy of Luxembourg 0,2504
Kingdom of the Netherlands 5,7170
Republic of Austria 2,7834
Portuguese Republic 2,5092
Republic of Slovenia 0,4276
Slovak Republic 0,8240
Republic of Finland 1,7974
T/ESM/Annex II/en 1
Subscriptions to the authorised capital stock
ESM Member Number of shares Capital subscription
Kingdom of Belgium 243 397 24 339 700 000
Federal Republic of Germany 1 900 248 190 024 800 000
Republic of Estonia 13 020 1 302 000 000
Ireland 111 454 11 145 400 000
Hellenic Republic 197 169 19 716 900 000
Kingdom of Spain 833 259 83 325 900 000
French Republic 1 427 013 142 701 300 000
Italian Republic 1 253 959 125 395 900 000
Republic of Cyprus 13 734 1 373 400 000
Grand Duchy of Luxembourg 17 528 1 752 800 000
Malta 5 117 511 700 000
Kingdom of the Netherlands 400 190 40 019 000 000
Republic of Austria 194 838 19 483 800 000
Portuguese Republic 175 644 17 564 400 000
Republic of Slovenia 29 932 2 993 200 000
Slovak Republic 57 680 5 768 000 000
Republic of Finland 125 818 12 581 800 000
Total 7 000 000 700 000 000 000
T/ESM/Annex III/en 1
The ESM stability support pricing structure is the following:
ESM funding cost, plus a margin consisting of:
1) A charge of 200 bps applied on the entire loan;
2) A surcharge of 100 bps for loan amounts outstanding after 3 years.
For fixed rate loans with maturities above 3 years, the margin will be a weighted average of the
charge of 200 bps for the first 3 years and 200 bps plus 100 bps for the following years.