TD ‘very concerned’ at effect of ESM treaty

Independent TD Thomas Pringle has told the High Court he is very concerned the European Stability Mechanism treaty will permit an unregulated and uncontrolled new institution to bail out member states when existing EU treaties prohibit any such bailout.

Mr Pringle also said he feared that if the ESM is called on to bailout Spain and Italy, Ireland could “very quickly” be called on to provide the full €11.14bn amount of its required contribution to the ESM. He did not know where Ireland would get those funds — it might have to borrow them from the ESM itself and then pay them back, he told Ms Justice Mary Laffoy yesterday. Ireland had to raise €1.3bn for the ESM within the next 18 months, he noted.

He was also concerned the ESM would interfere with EU economic policy, place a huge burden on member states, and encroach on their ability to govern their own economic affairs. The manner in which the ESM could call for capital placed a huge burden on Ireland to raise that capital and infringed its right to decide policy, he said.

He said he had been concerned for some time about the proposed ESM and voiced those concerns in letters to the Taoiseach and ministers. He had also proposed that members of the Dáil and Seanad should petition President Michael D Higgins for a referendum on the treaty.

He had been advised the ESM treaty and the fiscal stability treaty, approved by a referendum here last month, were interlocked and he felt the ESM treaty should also have been put before the people in a referendum.

Mr Pringle agreed with his counsel, John Rogers, that Ireland was within an economic and monetary union but said his concern was that the ESM breached rules governing monetary union set out in the EU treaties. Articles of the Treaty on the Functioning of the European Union (TFEU) prohibited bailouts, the ESM breached what was prohibited, and it was “vitally important” the EU operated within its ground rules.

He agreed eight larger states of the EU could cause the ESM treaty to come into force and said this “skewed” the entire decision making process within the EU and undermined the influence of the smaller states.

Yesterday was the second day of the hearing of the action by the Donegal TD aimed at preventing the Government proceeding to ratify the ESM treaty without holding a referendum.

Mr Pringle claims the Feb 2012 ESM treaty — which provides for a €500bn strictly conditional permanent rescue fund for the 17 member states using the euro — breaches the Irish Constitution, EU law, and the treaties of the EU on several grounds.

The Government, Ireland, and the Attorney General dispute Mr Pringle’s entitlement to the declarations sought, including that the ESM treaty violates the principles of the TFEU.

The case continues today.