European Financial Stability Facility Policy (EFSF) Used to Overcome the Eurozone Economic Crisis (2009–2010)

Nuning Sintya Defa, Rio Budi Rahmanto, Rofikoh Rokhim

Abstract

This study elaborates the policy of European Financial Stability Facility (EFSF), issued in 2010 by European Union in response to the Eurozone Economic Crisis, based on the agreement between Eurozone member states along with the European Central Bank (ECB) and International Monetary Fund (IMF). The EFSF policy subsequently elaborated includes the background information that caused the EFSF policy to be issued. This economic milieu was based on an institutional, neoliberal framework. In this context, this study determined that institutional weakness in the European Union, and the ECB—neither of which have regulations in place or an economic crisis management system—caused Eurozone member states to find other solutions to the economic crisis of 2010. This study also reveals the implications of EFSF for the economies of Eurozone member states that suffered from the crisis, disclosing how those members’ expectations may be fulfilled.

Keywords— Economic crisis, institutions, Eurozone member states, European Union, and ECB

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