The ESM is expected to have a total fund of €700bn, although its actual lending capacity will only be €500bn.
This is because the ESM will need a buffer in order to maintain a AAA rating.
The fund will have €80bn in paid-in capital, which is made up of contributions from the 17 eurozone member states.
Ireland's capital contribution will be €1.27bn over three years, representing 1.59% of the total amount.
The other €620bn comes from what is known as callable capital, where the ESM calls upon member states to contribute funds as and when necessary.
The ESM will be able to lend to countries in difficulty, to buy bonds in the primary and secondary markets, and to extend precautionary credit lines to countries that are experiencing problems in raising money on the international markets.
The fund will also be able to recapitalise banks via loans to their governments.
However, the ability for the ESM to directly recapitalise banks in a way that does not place a burden on government debt remains open to dispute.
This is because the finance ministers of Germany, the Netherlands and Finland said in a statement two weeks ago that the ESM would be limited in how it recapitalises banks, with the fund only being allowed to look after the future needs of banks, not those which occurred in the past.
The Government has disputed this interpretation of the heads of government statement from 29 June, which declared that the eurozone would break the link between sovereigns and banks.
The Government insists that the June agreement covers legacy debt, and that the ESM should be allowed to take stakes in Irish banks, such as Bank of Ireland, AIB and Permanent TSB.
This would alleviate the burden on the State, which arose when banks were recapitalised at the height of the property crash.
Minister for Finance Michael Noonan is expected to raise the issue with his German counterpart Wolfgang Schauble in Luxembourg today.
Eurozone finance ministers are also expected to hear a report from the Troika of international lenders to Greece.
The Troika has yet to reach agreement with the Greek government over savings of €13.5bn, which are needed to trigger the next tranche of the country's second bailout. That tranche is worth €31.5bn.
During the weekend, the Greek government warned that it would run out of money in November if the payment was not made.
Demonstrations are expected in Athens tomorrow for the visit of the German Chancellor Angela Merkel.
It will be the first time Ms Merkel has visited Greece since the crisis began in 2009.
The ESM was supposed to come into operation in July, but it was held up by a legal challenge in Germany.
In September, the German Constitutional Court ruled that the treaty was compatible with the German constitution, but added that any ESM liability for Germany beyond €190bn would require prior approval from the Bundestag.
The first hearing of Independent TD Thomas Pringle's complaint on the ESM at the European Court of Justice is on 23 October following a referral by the Irish Supreme Court.
All 27 EU finance ministers will discuss the idea of a Financial Transaction Tax (FTT) tomorrow, as well as moves towards a European Banking Union.
The Government has rejected the idea of FTT, arguing that if the UK did not sign up to it, then the IFSC would lose jobs and investors to the City of London.
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