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Question 82

'European Stability Mechanism', sometimes seen in the news, is an

AOptions

A) agency created by EU to deal with the impact of millions of refugees arriving from Middle East

B) agency of EU that provides financial assistance to eurozone countries

C) agency of EU to deal with all the bilateral and multilateral agreements on trade

D) agency of EU to deal with the conflicts arising among the member countries

BSolution

The 'European Stability Mechanism' (ESM) is an intergovernmental organization established by the eurozone member states. Its primary role is to provide financial assistance to eurozone countries that are experiencing or are threatened by severe financing problems, helping them maintain financial stability within the euro area. It was created in 2012 as a permanent rescue fund, succeeding temporary facilities like the European Financial Stability Facility (EFSF), in response to the European sovereign debt crisis.

CStrategy

For terms related to international economic or political organizations frequently appearing in the news, identify their primary function and the specific region or group of countries they serve. Understanding the context of their creation (e.g., in response to a crisis) can also be highly informative.

DSyllabus Analysis

This question pertains to International Organizations, European Union affairs, and Current Economic Events.

EQuestion Analysis

Medium. Requires knowledge of major European Union institutions and their functions.