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This note explores the EU facility to provide loans to EU Member States in financial difficulty, the European Financial Stabilisation Mechanism (EFSM). It is financed by borrowing against the EU Budget (up to a total of €60bn); funds are then lent on to the countries concerned at an interest premium. The EFSM is not used independently, but forms part of a loans package, involving another EU facility and the IMF. The UK is indirectly liable through its share in the EU Budget for loans made under the EFSM, and there has been some discussion about the process by which it became involved.