Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 65: To ask the Minister for Finance if Ireland will have financial obligations under the euro area loan facility if ratified by all member states of the EU irrespective of the outcome of the forthcoming referendum on the fiscal compact; and if he will make a statement on the matter. [13293/12]

Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 66: To ask the Minister for Finance if Ireland will be able to access funds from the euro loan area facility in the event of the electorate rejecting the proposition in the forthcoming referendum on the fiscal compact; and if he will make a statement on the matter. [13294/12]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 65 and 66 together.

I assume the Deputy is referring to the European Stability Mechanism. The European Stability Mechanism (ESM) Treaty was signed by Euro Area Member States on 2 February 2012. The original version of the treaty was signed on 11 July 2011, but it has been modified to incorporate decisions taken by the Heads of State or Government (HoSG) of the Euro Area on 21 July and 9 December 2011, aimed at improving the effectiveness of the mechanism.

The ESM treaty will enter into force as soon as Member States representing 90% of the capital commitments have ratified it. The Treaty provides that the ESM will have total capital of €700 billion composed of €80 billion of paid in capital with the remaining €620 billion as callable capital. Ireland's share of the paid in capital is 1.592% which requires an actual amount of €1.27 billion, payable in installments starting in July 2012. This contribution is payable by all ESM members. Membership of ESM requires ratification of the ESM Treaty. Primary legislation will be required to ratify it, and the ESM will become operational as soon as possible and a target date of July 2012 has been set, which is a year earlier than originally planned.

The ESM Treaty also 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 TSCG by the ESM Member concerned" and on implementation of the balanced budget rule as specified in Treaty on Stability, Coordination and Governance (TSCG) in the Economic and Monetary Union within the agreed timeline (i.e. one year after entry into force of the TSCG).

The linkage between the ESM and the ratification of the Treaty on Stability, Coordination and Governance in the Economic and Monetary was accepted in the context of the acceleration into force of the ESM by July 2012. It was of particular importance to a number of partners. It is entirely logical and reasonable that a country receiving the support of its partners under the ESM should be prepared to run sensible budgetary policies as required under the new Treaty.

I have clarified that the linkage of both the ESM Treaty and the TSCG refers to new applications for assistance under the ESM and will not affect the transfer to the ESM of undisbursed amounts under the European Financial Stability Facility (EFSF) for Ireland and other 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.