Saturday

25th Mar 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.

SMEs lack support in EU financial plan

The European Commission's plan for a capital markets union is said to be aimed at small and medium-sized enterprises, but many could end up being left out in the cold.

Eurozone chief in 'drinks and women' row

[Updated] The Netherlands' Jeroen Dijsselbloem faces calls for resignation after saying that crisis-hit countries in southern Europe spent "money on drinks and women" before being helped by others.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

Stakeholders' Highlights

  1. European Gaming & Betting Association60 Years Rome Treaty – 60 Years Building an Internal Market
  2. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  3. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  4. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  5. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  6. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  7. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  8. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  9. Party of European SocialistsWe Must Renew Europe for All Europeans
  10. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  11. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People
  12. Nordic Council of Ministers25 Nordic Bioeconomy Cases for Sustainable Change