High Court to refer ESM issue

Mon, Jul 9, 2012, 01:00

A High Court judge has found Independent TD Thomas Pringle has raised a legal issue to be determined by the European Court of Justice (ECJ) that has implications for the effect and operation of the European Stability Mechanism Treaty.

Ms Justice Mary Laffoy said today she was satisfied Mr Pringle had raised an issue to be decided by the ECJ.

However, she refused his application for an injunction restraining the Government proceeding to lodge the final ratification instrument for the treaty, providing for a conditional permanent bailout fund for distressed states in the euro zone. The Government had proposed to lodge that instrument today.

The judge said, as whatever decision the ECJ arrives at on the referred question will bind all other member states, she did not think it was necessary to restrain ratification by injunction.

Mr Pringle said afterward he wanted to discuss the matter with his lawyers, but he did not rule out a possible appeal against the refusal of the injunction to the Supreme Court.

The precise wording of the question will be provided later, but the judge said, having considered the submissions from Mr Pringle and the State over a seven-day hearing, she was satisfied an issue arose from the crossover between the ESM treaty and a European Council decision of March 2011 amending Article 136 of the Treaty of the Functioning of the EU (TFEU) to authorise EU states to provide for an ESM.

The question to be addressed by the EC relates to whether, if an EU member State did not give notice of its approval of that EC decision in connection with Article 2 of the Decision and Article 46.8 of the Treaty of the EU (TEU), what implications has that for the effect and operation of the ESM treaty.

The judge noted the State had argued Mr Pringle was outside the applicable time limits to raise that issue. She was not satisfied he was time barred but would also consider referring that issue, she said. The judge said she will give a written summary of her decision later today and a lengthy judgment later.

In his action, Mr Pringle had raised issues whether the EC Council decision essentially authorised an increase in competences or powers of the EU in breach of the existing EU treaties and EU law.

The ESM legislation was recently passed by both Houses of the Oireachtas and signed by President Michael D. Higgins earlier this month.

In his action, Mr Pringle claimed the ESM treaty breaches the Irish Constitution, existing EU treaties and EU law and is inextricably intertwined with the Fiscal Stability Treaty approved in a referendum here last May.

He argued the ESM treaty must also be put to the people because the purpose of the ESM goes beyond the economic and monetary union approved by the Irish people in existing EU treaties.

He argued the treaty irrevocably and indefinitely binds all 17 euro zone states to the defence of the euro and, because it allows for decisions by qualified majority voting, deprives Ireland of the capacity to say yes or no to bailout decisions.

Ireland could be committed forever to putting money into a fund without having any say about that, he argued.

In opposing the action, the Government denied Mr Pringle's claims and also argued he had no legal standing to seek the various orders because although he had expressed concerns from April 2011 about the ESM, he had not brought the action until a year later.

Delayed ratification could "impact very detrimentally" on Ireland's proposed re-entry to the financial markets and capacity to raise the funding necessary to run the country going into 2014, a senior Department of Finance official, Jim O'Brien, said in an affidavit.