Eurozone: Future of ESM in EU court’s hands

23 October 2012 – Presseurop The Irish Times, EUobserver.com

The European Court of Justice will start hearing arguments today surrounding objections by Irish MP Thomas Pringle to the ratification of the European Stability Mechanism (ESM) treaty, reports the Irish Times.

Pringle argued in the Irish courts in June that the ESM treaty, which provides for a €500 billion fund to help struggling eurozone countries and banks, breached both the Irish Constitution and European Union law. Although Ireland’s Supreme Court refused to grant an injunction in July preventing Dublin from ratifying the treaty, it nevertheless referred a series of questions for determination to the Luxembourg based court.

The EUobserver notes that cash strapped Ireland is to pay its first installment of €500 million to the fund, after its came to life on October 8 —

If the EU judges rule against it, the ESM, its ratification and any payments made to Luxembourg, [where the ESM is based] will be deemed illegal. The EU court has fast-tracked its judgment in order to 'remove uncertainty' on the 'financial stability of the euro area' and pundits expect it to say No to Pringle.

The ESM is “galling” for public opinion in Ireland, the Brussels based news site reports. The Irish government has long campaigned to have its €64 billion bank bailout debt burden borne in part by the European fund but —

... eurozone hawks, such as Germany and Finland, have said it cannot help out with old bad bank debt – the main problem facing the Irish exchequer.

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