Brian Hayes (Dublin South West, Fine Gael)

This issue was dealt with on Committee Stage in the other House. Article 28 of the treaty states an internal audit function shall be established according to international standards. That is pro forma, as Senator Thomas Byrne stated. Article 29 refers to an external audit. It is clear in the legislation we are adopting that the accounts of the ESM shall be audited by an independent external auditor approved by the board of governors and responsible for certifying the annual financial statements. The external auditors shall have full powers to examine all books and accounts of the ESM and obtain full information on its transactions.

As I understand it, the staff of the ESM who will be from Ireland and other nations are negotiating at official level the internal rules of the organisation. As with any organisation that must be set up from scratch, there ought to be internal controls and rules. The staff will come to an agreement on the matter shortly. The official agreement will be brought to the board which is to be representative of all the signatory countries. In our case, the Minister for Finance will be the representative. A person with a public personality will be questioned. The board's job will be to ensure the proper functioning of the ESM such that it will carry out its mandate as set out in the treaty. The rules will be in place and involve all staff members. As with any organisation, it will take a while to have the staff members established.

There are to be by-laws of governance for the board of directors. These will be put in place and ready for board approval when the ESM enters into force. Of course, it is not yet in force because we require the 90% rule to apply before its establishment. It is expected this will happen shortly.

On the question of accountability, I have stated the ESM will have a board of governors comprising the Minister for Finance of each of the euro area member states, with the European Commissioner for Economic and Monetary Affairs and the Euro, Commissioner Rehn, who is known to this country, and the President of the European Central Bank, Mr. Draghi, as observers. The ESM will also have a board of directors. Each euro area country will appoint one director, with one alternate director. The board of governors will appoint a managing director responsible for the day-to-day management of the ESM and the managing director will chair the board of directors.

While I hear what colleagues are saying, I would admit it if the treaty were a radical departure regarding existing international treaties to which we are a signatory and international bodies of which Ireland is a member. It is not such a departure.

Senator Thomas Byrne made a good point on our status as elected Members of the Oireachtas. There are privileges Members enjoy and they are set out under the Constitution. The immunities and privileges for the ESM relate only to people who are carrying out their official functions; they do not relate to any other aspect of their lives. While I understand Members' concerns, they are being over-egged in respect of the establishment of a body such as the ESM.