<P> On 13 January 2012, Standard & Poor's downgraded France and Austria from AAA rating, lowered Spain, Italy (and five other) euro members further . Shortly after, S&P also downgraded the EFSF from AAA to AA+ . </P> <P> On 5 January 2011, the European Union created the European Financial Stabilisation Mechanism (EFSM), an emergency funding programme reliant upon funds raised on the financial markets and guaranteed by the European Commission using the budget of the European Union as collateral . It runs under the supervision of the Commission and aims at preserving financial stability in Europe by providing financial assistance to EU member states in economic difficulty . The Commission fund, backed by all 27 European Union members, has the authority to raise up to € 60 billion and is rated AAA by Fitch, Moody's and Standard & Poor's . </P> <P> Under the EFSM, the EU successfully placed in the capital markets an € 5 billion issue of bonds as part of the financial support package agreed for Ireland, at a borrowing cost for the EFSM of 2.59% . </P> <P> Like the EFSF, the EFSM was replaced by the permanent rescue funding programme ESM, which was launched in September 2012 . </P>

Ecb calls for further reform of euro zone bailout fund esm