Supreme Court to hear ESM appeal on Monday


A SEVEN-JUDGE Supreme Court will hear the appeal next Monday by Independent TD Thomas Pringle against the High Court’s dismissal of his claims that the European Stability Mechanism (ESM) treaty providing for a conditional bailout fund for distressed states in the euro zone breaches the Constitution and EU law.

The wording of a legal issue referred by the High Court to the Court of Justice of the EU (CJEU), the determination of which could have an impact on the effect and operation of the ESM treaty, will be decided later.

Mr Pringle’s application for a declaration that any purported ratification of the ESM treaty is invalid has been adjourned pending the CJEU ruling, while the Government has agreed not to ratify the treaty pending the Supreme Court appeal.

Ms Justice Mary Laffoy refused to grant an injunction restraining the Government from ratifying the treaty pending the CJEU decision, on grounds including that it was “impossible to predict the fallout” from such a restraint except to say it would probably be “extremely detrimental” to Ireland and the other members of the ESM.

In her detailed 140-page judgment yesterday on Mr Pringle’s case, Ms Justice Laffoy stressed that the High Court had no role in deciding whether participation in the ESM was a good or bad strategy for Ireland.

She found Ireland’s participation in the ESM did not impinge on its fiscal, budgetary or economic sovereignty in breach of the Constitution. While Ireland was undoubtedly committed to an €11.14 billion financial liability under the ESM, the Dáil had to approve that liability, while any increase in liability had to be approved by the Oireachtas via amending the ESM Act 2012, she said.

While it may be that discharging the financial liability would have budgetary implications requiring an adjustment of budgetary policy, those possible implications had advance approval of the Oireachtas under the ESM Act, she added.

She accepted that in an emergency situation, a decision affecting Ireland could be made without Ireland’s consent but said such a decision would arise after the European Central Bank and European Commission had concluded that failure to urgently adopt a decision would threaten the economic and financial sustainability of the euro area.

She found that the ESM was “a funding mechanism” with no role in the co-ordination of economic policy. The operations of the ESM required to be conducted in a manner fully consistent with the measures of economic co-ordination provided for in the Treaty on the Functioning of the EU.

Dismissing other claims that the ESM breached provisions preventing the EU or member states assuming the commitments of central governments, she said her conclusion was influenced by the view of the European Central Bank.

The judge agreed with the principal EU institutions that actions taken in establishing the ESM involved adherence to the principles of sincere co-operation in the Treaty of the EU and rejected claims that the ESM treaty conferred “new functions” on the European Commission or ECB, which are outside EU law.