Tuesday

21st Feb 2017

EU court to hear Irish complaint on bailout fund

  • Architectural maquette of the EU court building in the Grand Duchy (Photo: Cedric Puisney)

The EU court in Luxembourg will on Tuesday (23 October) hold its first hearing on an Irish challenge to the EU bailout fund, the European Stability Mechanism (ESM).

Based in a small office in Luxembourg, run by a German economist, free from political or judicial oversight and set to dole out €500 billion of taxpayers' money to floundering eurozone countries and banks, the ESM came into life on 8 October in a meeting of euro-area finance ministers.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

It has already survived one challenge in Germany's constitutional court and one in Ireland.

But the Irish government ratified the ESM treaty and is to pay its first installment of €500 million into the pot next week despite the Irish judges' referral of three questions to the EU tribunal.

The questions - put by the Cork, Ireland-based law firm Noonan Linehan Carroll Coffey on behalf of independent Irish MP Thomas Pringle - revolve around conformity with the EU treaty.

The first query is whether EU countries were right to tweak EU law on permanent bailout structures back in 2011 by using a "simplified procedure" - envisaged for minor technical changes - instead of by holding a full-blown intergovernmental conference.

The second one is whether the ESM violates the so-called "no bailout" clause, article 125, of the EU charter.

The final question is whether eurozone states were right to already ratify the ESM even though the tweaked-version EU treaty only comes into force on 1 January.

If the EU judges rule against it, the ESM, its ratification and any payments made to Luxembourg 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.

But in a sign of strong interest in the case, Irish think tank the National Platform has noted that over a dozen countries as well as Ireland filed papers to the tribunal.

The ESM is galling for the Irish public because eurozone hawks, such as Germany and Finland, have said it cannot help on old bank debt - the main problem facing the Irish exchequer.

"Ireland's total commitment [to the ESM] is in excess of €11 billion. By contrast, there is no fixed commitment by the ESM to support Ireland," National Platform said in a statement.

Sighs of relief as German court approves bailout fund

Markets and EU politicians breathed sighs of relief as Germany's top court rejected challenges brought against the eurozone's upcoming bailout fund. Any increase in Berlin's contribution will need parliamentary approval, however.

Eurozone hawks deal blow to bank bailout plans

EU officials are in damage control mode after Germany, Finland and the Netherlands said the eurozone's new bailout fund should not take on old debt from bad banks.

EU ready to challenge US border tax

The EU is willing to fight any attempt by the Trump administration to impose border tax on imports, says trade commissioner Jyrki Katainen.

Opinion

Unfair EU-Canada trade deal is wrong response to Trump

The EU-Canada trade deal, which is to be voted on in the European Parliament next week, cements the inequalities, political exclusion and favours to corporations that feed far-right groups in Europe.

Visual Data

EU farming policy: The damage done by 20 years of inertia

The EU Commission will ask the public later this week how the common agricultural policy should be overhauled. Data from the past two decades reveals a catalogue of missed chances and failed reforms.

News in Brief

  1. Greece agrees on new bailout reforms
  2. EU commission denies Juncker resignation rumour
  3. US "strongly committed" to cooperation with EU, says vice-president
  4. Wilders pulls out of second Dutch election TV debate
  5. Russia to recognise passports from breakaway Ukraine regions
  6. Pro-refugee marchers swarm through Barcelona
  7. Renzi seeks party's support
  8. EU probes China-funded rail project

Stakeholders' Highlights

  1. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps
  2. Nordic Council of MinistersNordic Innovation House Opens in New York to Help Startups Access US Market
  3. Centre Maurits CoppietersMinorities and Migrations
  4. Salzburg Global SeminarThe Child in the City: Health, Parks and Play
  5. UNICEFNumber of Ukrainian Children Needing Aid Nearly Doubles to 1 Million Over the Past Year
  6. Centre Maurits CoppietersThe Situation of Refugee Women in Europe
  7. Salzburg Global SeminarToward a Shared Culture of Health: Charting the Patient-Clinician Relationship
  8. European Free AllianceAustria Should Preserve & Promote Bilingual and Multinational Carinthia
  9. Martens CentreShow Your Love for Democracy! Take Part in Our Contest: "If It's Broken, Let's Fix It"
  10. CISPECloud Computing Leaders Establish Data Protection Standards to Protect Customer Data
  11. Malta EU 2017Landmark Deal Reached With European Parliament on Portability of Online Content
  12. Belgrade Security ForumBSF 2017: Building a Common Future in the Age of Uncertainty