I propose to take Questions Nos. 212 and 213 together.
As I have stated before, the European Stability Mechanism (ESM) Treaty, was signed by Euro Area Member States on 2 February 2012. The original version of the Treaty was signed on 11 July 2011, but it has been modified to incorporate decisions taken by the Heads of State or Government (HoSG) of the Euro Area on 21 July and 9 December 2011 aimed at improving the effectiveness of the mechanism. It also reflects the political decisions reached among leaders at their informal meeting on 30 January concerning the Treaty on Stability, Coordination and Governance (Stability Treaty) in the Economic and Monetary Union.
In my previous replies to the Deputy on this issue, I outlined that our approach to these negotiations was informed by the need to secure agreement on the revised ESM Treaty, including the additional flexibilities and the commitment to a review of its capacity. We viewed these as positive developments which are in Europe's interest and in Ireland's interest. The linkage between the ESM and Stability Treaty ratification was accepted in the interests of securing agreement on the ESM and its accelerated entry into force by July 2012. In the negotiations, the Government sought to ensure that it was made clear that the link between ratification of the Stability Treaty and the ESM Treaty applied only to new applications for assistance under the ESM, and that it will not affect the transfer to the ESM of undisbursed amounts under the European Financial Stability Facility (EFSF) for Ireland and other programme countries. The Government also sought to ensure that sufficient time was provided for ratification of the Stability Treaty before the link enters into effect.
The Stability Treaty is part of a broader package of measures aimed at improving confidence in the Euro Area, which include the ESM. It is entirely logical and reasonable that a country receiving the support of its partners under the ESM should be prepared to run sensible budgetary policies as required under the new Treaty. That is the basis of the linkage. We believe the linkage between the Treaties will further contribute to confidence, solidarity and financial stability in the euro area. These measures have the collective aim of restoring market confidence to the EU as a whole. Our approach to the discussions on these issues was informed, inter alia, by that concern.
The basis on which we agreed to the linkage is outlined above, as it was in previous replies to the Deputy on this issue. Finally, I would remind the Deputy that the decision to hold a referendum on the Stability Treaty was taken, on the basis of advice from AG's, once discussions on the Stability Treaty had concluded.
