12.5.2010 Official Journal of the European Union L 118/1 II (Non-legislative acts) REGULATIONS COUNCIL REGULATION (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union (TFEU), and in particular Article 122(2) thereof, Having regard to the proposal from the European Commission, Whereas: (1)  Article 122(2) of the Treaty foresees the possibility of granting Union financial assistance to a Member State in difficulties or seriously threatened with severe difficulties caused by exceptional occurrences beyond its control. (2)  Such difficulties may be caused by a serious deterioration in the international economic and financial environment. (3)  The unprecedented global financial crisis and economic downturn that have hit the world over the last two years have seriously damaged economic growth and financial stability and provoked a strong deterioration in the deficit and debt positions of the Member States. (4)  The deepening of the financial crisis has led to a severe deterioration of the borrowing conditions of several Member States beyond what can be explained by economic fundamentals. At this point, this situation, if not addressed as a matter of urgency, could present a serious threat to the financial stability of the European Union as a whole. (5)  In order to address this exceptional situation beyond the control of the Member States, it appears necessary to put in place immediately a Union stabilisation mechanism to preserve financial stability in the European Union. Such a mechanism should allow the Union to respond in a coor- dinated, rapid and effective manner to acute difficulties in a particular Member State. Its activation will be in the context of a joint EU/International Monetary Fund (IMF) support. (6)  Given their particular financial implications, the decisions to grant Union financial assistance pursuant to this Regu- lation require the exercise of implementing powers, which should be conferred on the Council. (7)  Strong economic policy conditions should be imposed in case of activation of this mechanism with a view to preserving the sustainability of the public finances of the beneficiary Member State and restoring its capacity to finance itself on the financial markets. (8)  The Commission should regularly review whether the exceptional circumstances threatening the financial stability of the European Union as a whole still exist. (9 The existing facility providing medium-term financial assistance for non-euro-area Member States, as estab- lished by Council Regulation (EC) No 332/2002 (%), should remain in place, HAS ADOPTED THIS REGULATION: Article 1 Aim and scope With a view to preserving the financial stability of the European Union, this Regulation establishes the conditions and procedures under which Union financial assistance may be granted to a Member State which is experiencing, or is seriously threatened with, a severe economic or financial disturbance caused by exceptional occurrences beyond its control, taking into account the possible application of the existing facility providing medium-term financial assistance for non-euro-area Member States’ balances of payments, as estab- lished by Regulation (EC) No 332/2002. (*) Council Regulation (EC) No 332/2002 of 18 February 2002 estab- lishing a facility providing medium-term financial assistance for Member States’ balances of payments (O] L 53, 23.2.2002, p. 1).