Today, we mark an important milestone in the further development of the Economic and Monetary Union, which will strengthen euro area's crisis prevention and resolution capabilities as well as the Banking Union. We also demonstrate our unity of purpose to deliver progress on important issues for the benefit of all our citizens.
Representatives from the Member States have signed the amending agreements to the Treaty on the European Stability Mechanism and the Single Resolution Fund Intergovernmental Agreement. This signature launches the ratification procedures in the Member States, in accordance with their national constitutional requirements.
On 30 November 2020, the Eurogroup reached a political agreement in relation to the ESM reform package. The agreement will make the ESM more effective and flexible. This includes the ESM providing a common backstop to the Single Resolution Fund by means of a credit line as of the beginning of 2022, two years ahead of schedule. The decision taken by Eurogroup regarding the early introduction of the backstop recognises the considerable efforts by the European banking sector, supervisors, and Member States in significantly improving all risk reduction indicators during recent years.
The common backstop will help to ensure that a bank failure does not harm the broader economy or cause financial instability. It will be financed by contributions from the banking sector and not by taxpayers' money, thereby reducing the link between banks and sovereigns in the Banking Union.
The ESM Treaty reform will expand the ESM’s mandate with new tasks and responsibilities: it will be equipped with a more accessible precautionary credit line and have a stronger role in financial assistance programmes and crisis prevention. Together with the early introduction of the common backstop, this will help to ensure that the euro area is capable of handling challenges if they arise.
I look forward to the completion of national ratification procedures to allow the entry into force of both agreements as of next year.
 Estonia, who was unable to sign today due to change of government, indicated that it remains committed to the agreed ESM reform and will sign both amending agreements as soon as possible.