ESM, German Constitutional Court, Passing The Hat On To Ireland

New Europe, the Brussels-based magazine, has an interesting article under the above headline, commenting on the situation after the German court’s ruling of yesterday:

“Further consideration of the ESM as a sound legal provision will be considered next at the European Court of Justice (ECJ) in October where it has flagged as urgent a case that was referred to it from the Irish Supreme Court, that of Thomas Pringle ESM/EU Case C-370/12.

On 3 August, 2012 the ECJ received three questions sent to it by the Supreme Court of Ireland which go to the heart of the proposed European Stability Mechanism (ESM). These questions arose from an Irish Court action brought by Thomas Pringle TD, independent member of the Irish parliament. The case has been given exceptional priority by the ECJ which has invited Pringle, all Member States and EU institutions to make observations by 14 September, say the offices of Thomas Pringle MP and Irish Solicitor Joe Noonan on an explanatory website they have published to explain the procedures and Stability mechanisms of the EU in 2012 from a legal perspective called ‘Tale of Two Treaties’.

According to the MP and solicitor, ‘at stake is the extent of the power of the European Council: are the EU Heads of Government in effect above the law and entitled to rule the EU as they see fit? Or are they subject to the restraints set out in the EU Treaties?’

Joe Noonan the solicitor representing Pringle in the Supreme Court of Ireland will be present in Luxembourg at the hearing on 23 October and will be filing the Irish National written observations on 14 September, he has granted us permission to reprint his summary of the situation so far here:

‘The ESM Treaty would establish a new international financial institution outside the EU. Pringle asserts that the ESM Treaty will breach the ‘no bail-out’ rule contained in Article 125 of the Treaty on the Functioning of the European Union. In place since the 1992 Maastricht Treaty, this rule expressly prohibits Member States from taking on liability for the financial commitments of other Member States. Mr Pringle asked the Irish court to examine the compatibility of the ESM Treaty with the EU Treaties on this basis, among others. That question has now been placed before the CJEU, ‘The establishment of the ESM outside the EU architecture is an effort to circumvent the ‘no bail-out’ rule and other provisions of the existing EU Treaties in Mr Pringle’s view. The ESM also infringes on the exclusive competence of the EU in the area of monetary policy. It is not permissible to do this by stepping outside the EU.

‘ESM is Anti-Union Pringle is concerned that the ESM Treaty will divide the Member States of the EU whose currency is the euro, from the others. The ESM Treaty will drive a wedge between the 17 and the 10. The establishment of the ESM will be an anti-Union step. The European Union was intended to promote an ever closer union of its peoples. By contrast, the ESM’s priority will be the preservation of a currency.

‘Pringle states that for these reasons the ESM Treaty is incompatible with the EU Treaties. The crisis facing the eurozone does not justify discarding the agreed rule book and departing from the Rule of Law which is a fundamental principle of the Union.

‘The Irish Supreme Court took the view that Mr Pringle had raised questions which it could not answer on its own. Therefore it used an EU Treaty procedure under which difficult questions of EU Treaty interpretation may be referred to the ECJ for guidance.

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