Thomas Pringle
Question:185. Deputy Thomas Pringle asked the Minister for Finance if he intends to pay public money to the ESM; and if so, the amount in advance of the legality of the ESM being considered by the ECJ. [43323/12]
View answerTuesday, 9 October 2012
Questions (185)
Written answers
The European Stability Mechanism (ESM) was established by the Treaty establishing the European Stability Mechanism (ESM Treaty) was signed by Euro Area Finance Ministers on 2 February 2012. It provides for the establishment by the Euro Area member states of the ESM as an intergovernmental organisation under public international law. Legislation is required for Ireland to ratify the ESM Treaty. The ESM Act passed all stages of the Oireachtas, and was signed into law by the President on 3rd July.
The ESM Treaty and the underlying legislation in the ESM Act, as well as the European Council Decision from March 2011 proposing an amendment to Article 136 TFEU concerning stability mechanisms, was the subject of an extensive legal challenge in the High Court in June, and a subsequent comprehensive appeal in the Supreme Court in July, relating to its compatibility with the Bunreacht na hÉireann and also with the EU Treaties and the validity of the European Council Decision. The challenge in relation to Bunreacht na hÉireann was unsuccessful, as was a request for an injunction to restrain Ireland’s ratification. A number of questions of EU law were referred by the Irish Supreme Court to the Court of Justice of the European Union. Ireland ratified the treaty on August 1st by lodging the instrument of ratification with the Depositary.
The ESM Treaty, at article 48.1 provides that the ESM will enter into force when instruments of ratification, approval or acceptance have been deposited by signatories whose initial subscriptions represent no less than 90% of the total subscription. The ESM Treaty accordingly entered into force on 27th September 2012 following its ratification by 16 of the 17 Euro area member states, representing over 99.8% of its subscribed capital base. All 17 Euro Area Member States have now ratified the ESM Treaty.
The ESM Treaty provides that it shall have a capital base of €700 billion of which €80 billion is paid in capital. Ireland’s share of this paid in capital is €1.27 billion, based on the contribution key of 1.5922% set out in annex 1 of the ESM Treaty. The Treaty provides that this contribution is to be paid in five equal tranches. The Euro Group Finance Ministers agreed in March 2012 that two of the five equal tranches would be paid this year, and subsequently agreed, in September 2012, that both of these tranches should be paid in October 2012. For Ireland, these two tranches will amount to €509.508 million in accordance with our contribution key %, and this amount will be paid this week, in accordance with our obligations following our ratification of the ESM Treaty and its entry into force.