By Anthony Coughlan
Director, National Platform EU Research & Information Centre
Related Link: http://www.nationalplatform.org
First published online @ http://www.indymedia.ie/article/101936
Reasons to believe that the ESM Treaty as it stands is illegal under EU law and therefore unconstitutional in Ireland:
The proposal to ratify the European Stability Mechanism
Treaty as it stands and to approve the Article 136 TFEU amendment to the
EU Treaties as authorizing the Stability Mechanism envisaged in the ESM
Treaty, are unlawful under the EU Treaties and are therefore
unconstitutional in Ireland and the other EU Member States.
There are constitutional challenges to the ESM Treaty and the
Article 136 TFEU
amendment in Germany, in Estonia and in Ireland. In this country
independent Dáil Deputy for Donegal Mr. Thomas Pringle has launched a
constitutional challenge on these matters which opens in the Irish High
Court on 19 June.
Deputy Pringle’s lawyers are seeking a constitutional referendum in Ireland on the
ESM Treaty. They are also claiming that the EU Treaties should be amended under a different provision of the
Art. 48 TEU treaty revision procedure than that currently used of the
ESM Treaty as it stands is to be lawfully ratified under EU law.
Deputy Pringle’s legal action is seeking to defend the
principle that the EU is an entity governed by the rule of law in face
of a political attempt to change the EU treaties by subterfuge and to
open a way to transforming the present EMU into a fiscal-political union
for the Eurozone.
While my colleagues and I are not involved in Deputy Pringle’s
action, we and many other Irish people share his concerns that the
integrity of the existing EU Treaties and the Irish Constitution be
upheld in face of the attempt by some Eurozone Governments effectively
to take the Eurozone captive for their own ends and to organize the
Economic and Monetary Union on quite different principles from
heretofore by means of this
ESM Treaty. We have
respectfully requested several ambassadors therefore, to urge their
Governments not to proceed with their country’s ratification of the
ESM Treaty or approval of the
Article 136 TFEU authorisation, until the Irish Courts have ruled on the issues raised by this constitutional action.
The reasons which lead us to believe that the
ESM Treaty as it stands is illegal under EU law and unconstitutional in Ireland are the following:-
1. Article 3 TFEU of the EU Treaties which have been agreed by all
27 EU Member States provides that monetary policy for the countries
using the euro is a matter of “exclusive competence” of the EU as a
whole.
It is not therefore open to the
17 Member States of
the Eurozone to attempt effectively to diminish the competence of the
Union and to establish among themselves a Stability Mechanism entailing a
€700 billion permanent bailout fund to lend to Eurozone governments as
envisaged in the
ESM Treaty. This ESM fund, to which
Ireland would have to make significant contributions for the indefinite
future, would trench profoundly on monetary policy for the euro area.
The Stability Mechanism envisaged in the
ESM Treaty is effectively an attempt to find a way round the “
no bailouts” provision of
Article 125 TFEU,
whereby it is forbidden for the EU to take on the debt of Member States
or for Member States to take on the debt of other Member States.
It also breaches other EU Treaty articles. The ESM Treaty if ratified
as it stands would effectively amount to an attempt to open a
legal-political path to what France’s President Nicolas Sarkozy called
for last November, namely “
A Federation for the Eurozone and a Confederation for the rest of the EU“.
A radical step of this kind, which would transform the Economic and
Monetary Union from what it has been up to now, may only lawfully be
taken by means of the
“ordinary” treaty amendment procedure of Art. 48.2 TEU. It cannot lawfully be done by means of a mere
Decision of the European Council of Prime Ministers and Presidents under the
“simplified” treaty amendment procedure of Art. 48.6 TEU.
The latter procedure is meant to deal with minor technical amendments
to the treaties, but is currently being used by the governments of the
17 Eurozone countries in an attempt to alter radically the character of
the EMU by ratifying this
ESM Treaty as it stands.
2. How can it be lawful for the ESM Treaty to permit a permanent ESM
loan fund to be established for the 17 Eurozone countries when the
express terms of the Article 136 TFEU amendment, agreed by all 27 EU
Governments, authorises a Stability Mechanism only if that is
established unanimously by the Eurozone States, as the general
provisions of EU law require,
viz:
“The Member States whose currency is the euro may
establish a stability mechanism to be activated if indispensable to
safeguard the stability of the euro area as a whole” (emphasis added).
The
Art. 136 amendment to the EU Treaties does not say that
“Member States”, meaning some of them, may establish a Stability Mechanism, but rather
“The Member States” , namely all of them (In French
Les Membres rather than
Des Membres).
Yet the ESM Treaty which has been concluded among the
17 provides that the Stability Mechanism it envisages may come into being once
States contributing 90% of the capital of the proposed fund have ratified the treaty.
The eight largest Eurozone States,
a minority of the 17,
can therefore establish this Stability Mechanism, while other Eurozone
States that may need assistance from it badly are excluded.
How then can this be a Stability Mechanism “
for the euro area as a whole“, as
article 136 TFEU, which still has to be constitutionally approved by
all 27 EU Member States, requires?
Likewise the so-called
Fiscal Treaty – the Treaty on Stability, Coordination and Governance in the EMU
– on which Irish voters have just voted and which cross-refers to the
ESM Treaty, provides that it can come into force when it is ratified by
12 Eurozone Members.
Does not this treaty also require unanimous ratification by all
17 Eurozone Members before it can be lawfully binding on them under EU law?
3. How can the ESM Treaty be lawfully ratified by July 2012, as is
the stated intention of the 17 Eurozone governments concerned, when the
Article 136 TFEU amendment to the EU Treaties authorising a Stability
Mechanism does not have legal effect, once if has been constitutionally
approved by all 27 EU Member States, until 1 January 2013?
Does not this mean that any treaty purporting to establish an ESM before 2013 must be legally void?
ESM Treaty No. 1 which was signed by Eurozone Finance Ministers in
July 2011 but was never sent round for ratification, conformed to the 2013 time-frame set by the
Art. 136 TFEU authorisation, whereas
ESM Treaty No. 2 which was signed by EU Ambassadors on
2 February 2012 does not.
This shows again how the exigencies of a political response to the
financial crisis by some Eurozone States puts them in breach of EU law
and therefore of the Irish Constitution.
4. EU Member States may only sign international treaties that are
compatible with EU law. The EU Court of Justice has made clear that
intergovernmental agreements cannot affect the allocation of
responsibilities defined in the EU Treaties.
The provisions of the ESM Treaty and the Fiscal Treaty which involve
the EU Commission and Court of Justice in the implementation of the
proposed ESM go well beyond what is permissible under the current EU
treaties and are therefore unlawful.
Copies of this article are being released to the Irish and international
media for their information regarding the concerns which are widely
shared in this country that the proposed ESM Treaty is in violation of
EU law and in breach of the Irish Constitution.
Anthony Coughlan
Director, National Platform EU Research & Information Centre
