Q82 (IAS/2016) International Relations & Global Affairs › International Organisations & Groupings › European Union integration Official Key

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

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

agency of EU that provides financial assistance to eurozone countries

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

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

Result

Your answer: — · Correct: B

Explanation

The European Stability Mechanism (ESM) is a financial institution set up by the euro area member states.[2] Since 2012, the European Stability Mechanism has been the main provider of financial assistance to the euro area member states.[4] The ESM is a permanent crisis resolution mechanism for the countries of the euro area that issues debt instruments in order to finance loans and other forms of financial assistance to euro area member states.[5] The ESM was inaugurated on 8 October 2012 and is based in Luxembourg.[6]

Option A is incorrect as the ESM deals with financial assistance, not refugee issues. Option C is wrong because the ESM does not handle trade agreements. Option D is also incorrect as the ESM is not a conflict resolution body but specifically focuses on providing financial support to eurozone countries facing economic difficulties.

Sources

[1] https://www.consilium.europa.eu/en/policies/financial-assistance-eurozone-members/
[2] https://www.consilium.europa.eu/en/policies/financial-assistance-eurozone-members/
[3] https://www.consilium.europa.eu/en/policies/financial-assistance-eurozone-members/
[4] https://www.consilium.europa.eu/en/policies/financial-assistance-eurozone-members/
[5] https://www.developmentaid.org/organizations/view/62145/esm-european-stability-mechanism
[6] https://www.developmentaid.org/organizations/view/62145/esm-european-stability-mechanism

How others answered

Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.

Community Performance

Out of everyone who attempted this question.

66%

got it right

Web / Current Affairs

Online pages / news items supporting the statement

Web source

Presence: 5/5

"The European Stability Mechanism (ESM) is a **financial institution** set up by the euro area member states."

Why this source?

Explicitly identifies the ESM as a financial institution set up by euro area member states.
States ESM's purpose is to provide financial support to euro area member states facing financing difficulties — not refugee management.

Web source

Presence: 3/5

"The ESM was inaugurated on 8 October 2012 and is based in Luxembourg."

Why this source?

Provides founding/organizational details (inaugurated 8 October 2012, based in Luxembourg), indicating an institutional finance body rather than a refugee agency.
No mention in the passage of refugee-related mandate or operations.

Indirect textbook clues (5)

How books hint at the answer

Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 2: Contemporary Centres of Power > European Union > p. 16

Strength: 4/5

“The European Union has evolved over time from an e c o n o m i c u n i o n t o a n increasingly political one. The EU has started to act more as a nation state. While the attempts to have a Constitution for the EU have failed, it has its own flag, anthem, founding date, and currency. It also has some form of a common foreign and security policy in its dealings with other nations. The European Union has tried to expand areas of cooperation while acquiring new”

Why relevant

States that the EU evolved from an economic union into a more political entity with its own currency and some common foreign and security policy — showing the EU's institutional focus areas.

How to extend

A student could infer that entities created by the EU often relate to economic/monetary or foreign/security functions, so check whether the ESM's name fits those common EU roles (economic vs. migration).

History , class XII (Tamilnadu state board 2024 ed.) > Chapter 15: The World after World War II > European Union Flag - Euro Currency > p. 258

Strength: 4/5

“In December 1991, the members of EC came together and signed the Treaty of Maastricht by which the European Union was established in 1993 with a single market. With the establishment of European Union, the members worked on other areas such as foreign policy and internal security. This treaty paved the way for the creation of a single European currency – the euro. In 2017, Britain voted to exit the EU (British Exit known as "Brexit").”

Why relevant

Explains that the Maastricht Treaty established the EU (1993) and paved the way for a single currency and work on foreign policy/internal security — indicating treaty-based creation of EU agencies and emphasis on economic integration.

How to extend

Use the fact that many EU bodies are treaty-created and often tied to economic/monetary integration to suspect the ESM may be a financial/economic instrument rather than a refugee agency.

Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 2: Contemporary Centres of Power > TIMELINE OF EUROPEAN INTEGRATION > p. 19

Strength: 3/5

“© Ares, Cagle Cartoons Inc. The cartoon appeared in 2003 when the European Union's initiative to draft a common constitution failed. Why does the cartoonist use the image of the ship Titanic to represent EU? of Europe about the EU's integrationist agenda. Thus, for example, Britain's former prime minister, Margaret Thatcher, kept the UK out of the European Market. Denmark and Sweden have resisted the Maastricht Treaty and the adoption of the euro, the common European currency. This limits the ability of the EU to act in matters of foreign relations and defence.”

Why relevant

Notes limits on the EU's ability in foreign relations and defence because member states sometimes resist deeper integration, implying EU competence is uneven across policy areas.

How to extend

A student could reason that large-scale refugee policy may involve national sovereignty and thus be less likely to be the primary remit of an EU agency named for 'stability' without checking the ESM’s mandate.

Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 13: Cultural Setting > Recent International Migration > p. 102

Strength: 3/5

“track, but according to the UN at least about 210 million people (excluding refugees) lived or worked outside of their country in 2015. The annual growth rate of immigration has been steepest in the developing countries and about half of all international migration takes place within the developing countries. So far as the involuntary migration (refugees) is concerned, it was about 40 million in 2005. The refugees problem became quite alarming after the American-Afghan War and the invasion of Iraq by the American forces. The number of refugees is overshadowed by the increase in the number of internally displaced persons—those who have been forced to flee their homes by armed conflicts, persecution, or natural or man-made disaster, but who remained within their national borders.”

Why relevant

Gives context on growth in refugee/involuntary migration linked to conflicts such as the American-Afghan War and the Iraq invasion, showing the timing and scale of refugee flows from the Middle East.

How to extend

Combine this with EU institutional roles to test whether the ESM was established in response to those refugee waves or for some other purpose (e.g., economic crisis), by checking ESM’s founding context against these events.

Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 13: Cultural Setting > Table 13.18 > p. 101

Strength: 2/5

“Migration from Europe (1945–52) It may be seen from (Table 13.17) that out of the 6.3 million migrants over 4.45 million were the emigrants from Europe and the remaining, about 0.7 million, from the rest of the world. The number of immigrants in Europe during the same period was only 1.15 million . The migration from the different countries of Europe between 1945 and 1952 has been given in the (Table 13.18). It may be noted from this Table that most of the out-migrants from European countries left for the USA (27%), Canada (21%) and South American countries (21%). About 17% of the total emigrants left for Australia and 13% for Israel.”

Why relevant

Provides historical migration/refugee statistics and destinations, illustrating migration is a major cross-border issue handled by different actors.

How to extend

A student could use this pattern to ask whether an EU body named 'Stability Mechanism' would logically be aimed at migration (social policy) versus financial/economic stability, prompting targeted verification.

Consider the following statements : The 'Stability and Growth Pact' of the European Union is a treaty that 1. limits the levels of the budgetary deficit of the countries of the European Union 2. makes the countries of the European Union to share their infrastructure facilities 3. enables the countries of the European Union to share their technologies How many of the above statements are correct?

Question map

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

Explanation

PROVENANCE & STUDY PATTERN

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