The European Stability Mechanism (ESM) is an intergovernmental organization located in Luxembourg City, which operates under public international law for all eurozone member states having ratified a special ESM intergovernmental treaty. It was established on 27 September 2012 as a permanent firewall for the eurozone, to safeguard and provide instant access to financial assistance programmes for member states of the eurozone in financial difficulty, with a maximum lending capacity of €500 billion. It has replaced two earlier temporary EU funding programmes: the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM).

Luxembourg, also known as Luxembourg City, is the capital city of Luxembourg and the country's most populous commune. Standing at the confluence of the Alzette and Pétrusse rivers in southern Luxembourg, the city lies at the heart of Western Europe, situated 213 km (132 mi) by road from Brussels, 372 km (231 mi) from Paris, and 209 km (130 mi) from Cologne. The city contains Luxembourg Castle, established by the Franks in the Early Middle Ages, around which a settlement developed.