Pringle tells court ESM ‘should never have been set up’

The EU’s rescue fund, the ESM, is illegal, accountable to nobody and should never have been established in its current structure, the EU’s highest court was told by lawyers on behalf of Independent TD Thomas Pringle.

If a majority of the 27 judges of the European Court of Justice that heard the case in Luxembourg agree, the EU will have to go back to the drawing board and find a new way of making legal the ESM, that could ultimately be worth €1tn.

This would mean a referendum in Ireland to change the EU treaties and could also trigger a vote among the British electorate that could be very difficult to win.

If the judges disagree with Mr Pringle, the Donegal man could be left with a bill for the costs of bringing his case to the Supreme Court in Dublin, which referred it to the European Court of Justice.

Mr Pringle said he was very happy with the way the one-day hearing went and added that one of his main objectives was to have the arguments heard by the EU’s highest court.

“I hope they will give it due consideration and decide in my favour and I am happy because it got a good hearing,” he said.

This is the first time that a request from a member state’s court was heard by the grand jury — judges from each of the EU countries.

He had hoped to prevent the Dáil approving the ESM initially but failed in this and now the Government is due to make its first installment of its €11bn contribution to the fund next week.

Prepared by the Cork firm Noonan Linehan Carroll Coffey, his argument says the ESM is not compatible with the EU’s own treaties. He argues that the member states used a simplified procedure to create the ESM when they should have held a full inter-governmental conference. The simplified procedure, introduced by the Lisbon treaty, may not be used to extend the powers of the EU, but he claims that the ESM did increase the EU’s powers.

The ESM also violated the “no bailout” clause of the EU treaty; and that member states should not have ratified it before the fund was due to come into force.

Senior Counsel John Rogers told the court that the ESM treaty entailed the creation of an autonomous international institution to operate in parallel with the ECB and that such an institution was never envisaged as part of European Monetary Union under the treaty on European Union.

The ESM was intended to serve as a conduit to carry out functions which would not be allowed to be done by the member states, the union, and the ECB, he argued.

A number of countries, including Germany, made submissions against Mr Pringle. The ESM has survived an initial challenge in the German Constitutional Court.

The court is expected to issue its judgment in late December or early next year.