Friday 27 July 2012

ESM to be examined by the European Court of Justice

The Irish Supreme Court, following a challenge by independent TD Thomas Pringle, has referred 3 questions on the European Stability Mechanism to the ECJ in Luxembourg to test its compatibility with the EU Treaties. Given that securing access to the permanent bail-out fund was the main reason most Irish people voted Yes to the Fiscal Compact, it has the potential to cause severe economic and political fallout.

The questions are:

"1.Is the EU Council decision of March 25th 2011 to amend article 136 of the TFEU valid and does it violate treaty or EU law principles?

2.If the decision of March 25th 2011 is valid, is a member state entitled to join the ESM before the decision comes into force?

3.Is the terms and operation of the ESM Treaty compatible with the principles and provisions of the EU Treaties?"
As far as I know, this is the first time that either the Fiscal Compact (not included in this challenge because the referendum changed the constitution to permit ratification) or the ESM Treaty will be examined by the ECJ for compliance with the EU Treaties. The Supreme Court has asked for a quick answer from the ECJ given the seriousness of the matter (The reports that a full panel of seven Supreme Court judges heard the case).

Even should the Treaty prove to be in compliance with the EU Treaties, it still needs to be decided by the Supreme Court whether or not it violates the Irish Constitution.

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