Crucial ESM court hearing set to start this coming Tuesday
October 21, 2012 by namawinelake
“It’s high time that we brought democracy and transparency to Europe – the fight’s not over yet” Deputy Thomas Pringle in July 2012 when the Irish Supreme Court referred to the European courts, three issues in his bid to stop the European Stability Mechanism
The European Stability Mechanism (ESM) was finally launched on 8th October, after two legal challenges – one in Germany, one in Ireland – both failed. However, whilst the bid by Donegal South-West TD, Thomas Pringle (pictured above) at Ireland’s High Court and subsequently, Supreme Court, failed to stop the launch of the ESM, his challenge still has the potential to put an end to the scheme, at least for now. The Supreme Court in Ireland referred a number of matters to Europe’s highest court, the Court of Justice of the EU (CJEU) in Luxembourg, and the oral hearing is set to commence this Tuesday on 23rdOctober, 2012. Whilst the hearing will not stop the scheduled payment of €258m into the scheme by Ireland tomorrow, the hearing does have the potential to stop the ESM in its tracks if the Court ultimately decides the manner in which the ESM has been created is incompatible with EU law. The Supreme Court in Ireland thought the matters were sufficiently arguable and legally feasible to allow it to refer these matters to Europe where they have been fast-tracked, though the Irish Supreme Court did not grant Deputy Pringle his request for an injunction halting progress of the ESM pending the ultimate outcome of the court hearings. This blogpost examines the issues, and will be the flagship blogpost on the subject with updates posted as the case progresses. The three matters which the Supreme Court in Ireland has referred to the CJEU are: 1. Is the ESM Treaty compatible with the EU Treaties? 2. Is the related decision by heads of government to amend the EU Treaties legally valid? 3. Can the ESM come into operation before the EU Treaty amendment comes into force (1st January 2013 at earliest)? Deputy Thomas Pringle has said he welcomes the fast-tracked hearing which will start on Tuesday and has said “I welcome the decision of the CJEU to use the accelerated procedure available to it to allow for an oral hearing in October. This shows that the Court recognises the urgency of this matter and its utmost importance to all EU states involved, including Ireland.” Deputy Pringle has stressed the potential exposure to Ireland of membership of the ESM. We seem to have formed the impression that money in the ESM will flow in only one direction to Ireland – that’s wrong, tomorrow €258m is set to be paid into the fund by Ireland and this will grow to over €1.25bn in the next 18 months. And the ESM commits us to pay in a maximum of €11bn to the scheme should things really get out of hand in Europe, and worse, the ESM allows itself the freedom to increase the uppermost cap. Though the hope here was that the ESM would be a backstop source of cheap funding when our IMF/EU programme expires at the end of 2013, tere is risk to Ireland from the ESM – it is not a one-way bet. Should Deputy Pringle be successful there will be an urgent need for European leaders to devise a lawful bailout mechanism, and you never know, we might have to have a new referendum in Ireland to approve such a mechanism. You can read the Irish Supreme Court decisions here and here. You can read the flagship blogpost on the High Court and Supreme Court hearings here. There will be updates here on the progress of the case.
Posted on October 21, 2012, in IMF/ECB and tagged Banks, CJEU, ESM, European Stability Mechanism, European Union, Ireland, Irish, Irish News, Supreme Court, Supreme Court of Ireland, Thomas Pringle. Bookmark the permalink. Leave a comment.