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GERMANY’S TOP COURT has rejected attempts from opponents of the proposed permanent Eurozone bailout fund to stop the country from ratifying the treaty that establishes it – clearing the way for the Eurozone’s largest economy to participate in the ruling.
The Constitutional Court in Karlsruhe dismissed applications from a coalition of eurosceptics who had tried to stop President Joachim Gauck from ratifying the European Stability Mechanism (ESM) treaty, and also the Fiscal Compact deal.
The ruling means Gauck can now ratify the Fiscal Compact on Germany’s behalf – but put conditions on Germany’s approval of the ESM, saying the country’s liability to the fund must be explicitly capped within the Treaty itself.
Though the ruling is welcome – as it does not put a permanent roadblock on the overall plan of European leaders to create a permanent bailout fund to aid stricken members – it means that other countries may have to re-ratify the treaty, or approve amendments to it, so that the ESM can come into effect.
Because the wording of the treaty must be identical in each participating country, the explicit limit to Germany’s contributions – which make up 27.146 per cent of the entire fund – may now mean that Ireland and the other 13 countries which had already ratified it will be forced into approving amendments.
This would also mean that any attempts to increase the size of the fund – which could otherwise be increased simply by the unanimous agreement of the participating governments – would need parliamentary approval, adding another layer of decision-making to the process.
In a separate decision, the court also rejected complaints that the European Central Bank’s programme of buying eurozone countries’ bonds was in breach of its mandate – removing another potential legal obstacle to the ECB plans which could kick in for Ireland when it emerges from the bailout programme.
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Right lads, I’m outta here, all goes downhill from here!! Last one out, knock off the lights.
What is bad about that? Just curious.
It’s all about the conditions….just the conditions.
Nein!
Why? Putting a upper limit on Germany’s contribution will not affect Ireland, not unless Ireland needs another bail-out. It just means that once the ESM is empty, Germany won’t be automatically be forced to refill it.very sensible. The Irish people should be force their government to also create a cap to their contributions to protect their people.
If Ireland has to re-ratify it does that mean another referendum?
I’m guessing it doesn’t.
Should it?
It’s only the ESM Treaty that needs to be amended, so it’s only the ESM Treaty that we need to re-ratify. That was approved by the Oireachtas and was deemed not to need a referendum (Thomas Pringle went to the Supreme Court to try and get one but his claim was rejected).
Basically what we’d need to do is repeat the ratification of the ESM, which is just have another vote in the Dáil and Seanad.
I guess because it’s an amendment to a treaty we already have approved it probably means a new referendum is not required.
Should it? Does it matter? We all know we will continue voting until we get the correct result as previous referendums have shown.
Yes it will mean another referendum,if the treaty has to be the same in all participating states then the restrictions outlined by the German constitutional court e.g (a cap on Germany’s contribution to the fund) will have to be accepted by all and be part of the new treaty or whatever they choose to call it.
@Gavan has the Supreme court not refered some matters from the Pringle challenge to the ECJ?
That was a very quick and thorough response, Gavan.
It’s almost as if you were poised, waiting for someone to ask.
@Ghandi: We didn’t hold a referendum on it in the first place, so we don’t need to hold another one.
Pringle action in Supreme Court has gone to ECJ as Norman pointed out. Will be interesting to see implications of that next year. See http://www.ejiltalk.org/dublin-karlsruhe-and-luxembourg-in-dialogue/
@Norman: As I understand it there were a few arms to Pringle’s claim, including (separately) whether Ireland needed a referendum, and whether the ESM Treaty was compatible with existing EU treaties.
From what I’m aware it rejected the first one, but has adjourned the second until it gets advice from the ECJ. The ECJ is scheduled to hear the case on October 23.
@Gavan thanks for the answer.
So much for the Germans supposedly going to throw out the treaty, according to lefties in the last discussion(s) on the treaty. Looks like its all above board.
Here we go again …. Will this mean another referendum ?
No
You never voted on it yet so why would there be a referendum ? A vote in the Dail on a small amendment is all that will now be required. This is excellent news for the Eurozone.
Thanks Justin .
Pringle request for an injunction was rejected by Supreme Court but questions were referred to European Court which have yet to be decided on.
from FT – http://url.ie/fw1m
“… the Irish Supreme Court refused a legal injunction sought by Mr Pringle, which enabled Dublin to press ahead and ratify the ESM treaty. However, the court asked the ECJ to provide legal guidance on whether the ESM is in breach of EU law.
“There is a principle within the EU that if an issue is before the ECJ that could affect everyone else then implementation should be held off until it is resolved, “Mr Pringle told the Financial Times. “If the ECJ agrees with me then the ESM is not compatible with EU treaties and cannot come into force.”
and
http://www.ejiltalk.org/dublin-karlsruhe-and-luxembourg-in-dialogue/
@Gavan thanks for the continuing discussion on this complex but crucial stuff. Anyone wanting a summary of the European Court case might find this link useful – http://taleoftwotreaties.tumblr.com/ECJupdate.
Thomas Pringle’s legal ‘Observations’ have now been filed with the European Court and the hearing as you say is set for 23 October.
the poor german taxpayers kiss goodbye to more cash cos unlike the easily led Irish government I can’t see many other citizens in countries allow there governments borrow huge cash from the esm or whatever ya call it then force austerity in order to pay back debts of bankers like we got sucked into doing…..
@ Tom – the ESM Treaty has passed on condition that there is a maximum limit to what the German taxpayers gives into the fund, so what you are saying was to be true but now will not be true.
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