Q. ‘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 conflict arising among the member countries

Answer: (b) agency of EU that provides financial assistance to eurozone countries

European Stability Mechanism (ESM) was an international financial institution set up by the euro area Member States to help euro area countries in severe financial distress.
The European Stability Mechanism (ESM) was set up in October 2012 as a successor to the European Financial Stability Facility (EFSF).
It provides financial assistance, in the form of loans, to eurozone countries or as new capital to banks in difficulty, with a maximum lending capacity of €500 billion.
This assistance is granted only if it is proven necessary to safeguard the financial stability of the euro area as a whole and of ESM Members.
It has replaced two earlier temporary EU funding programmes: the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM).