Michael McGrath (Cork South Central, Fianna Fail)
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Question 130: To ask the Minister for Finance if the European Stability Mechanism Treaty contains a provision that access to funds under the mechanism is contingent on countries ratifying the fiscal compact treaty; and if he will make a statement on the matter. [12510/12]

Michael Noonan (Limerick City, Fine Gael)
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The European Stability Mechanism (ESM) Treaty, which was signed by all euro area Member States on 2 February, subject to ratification, provides "that the granting of financial assistance in the framework of new programmes under the ESM will be conditional, as of 1 March 2013, on the ratification of the Intergovernmental Treaty (IGT) by the ESM Member concerned" and on implementation of the balanced budget rule as specified in that treaty within the agreed timeline (one year after entry into force of the treaty). The linkage between the ESM and the Intergovernmental Treaty to ratification was accepted in the interests of securing agreement on the ESM and its acceleration into force by July 2012. I believe the linkage between the Treaties will further contribute to confidence, solidarity and financial stability in the euro area.

The ESM will replace the EFSF and it may assume the rights and obligations of the EFSF. However, it is important to note that it has been clarified that the linkage of both the ESM and the IGT refers to new applications for assistance under the ESM and will not affect the transfer to the ESM of undisbursed amounts under the EFSF to Ireland (and other existing programme countries). The funding approved under the existing Programme of Financial Support for Ireland is not therefore conditional on Ireland ratifying the fiscal compact but, as is currently the case, on Ireland successfully implementing our programme. Primary legislation will be required to enable Ireland to ratify the ESM Treaty and implement its decisions. It is expected that the required legislation will be published this term.