27th Oct 2016

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.

Stakeholders' Highlights

  1. ANCI LazioAnci Lazio Definetely has a lot to Celebrate This Year
  2. EU-China ForumDebating the Future of the EU-China Relations on 28 November in Prague
  3. COMECEMigrants: From Fear to Compassion
  4. Birdlife EuropeBusiness as Usual - Juncker Snubs Environment and Protects Broken CAP
  5. EFADraft Bill for a 2nd Scottish Independence Referendum
  6. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  7. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  8. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  9. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  10. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  11. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  12. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum

Latest News

  1. EU case against Google is bad for developers
  2. Privacy activists mount court challenge to EU-US data pact
  3. Thousands of Nato soldiers go to Baltic states, Romania
  4. Canada's PM cancels EU summit amid Ceta woes
  5. Commission revives corporate taxation plan
  6. Iceland's not-so-quiet revolution
  7. EU’s gender equality progress under threat of conservatism
  8. EU waits for Gazprom settlement proposal