Written answers

Tuesday, 1 May 2012

9:00 pm

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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Question 165: To ask the Minister for Finance with regard to recital five of the treaty establishing the European stability mechanism, if it is the case that, as a recital, this has lesser legal standing than the body of the treaty, comprising the articles. [22010/12]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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Question 166: To ask the Minister for Finance if it is the case that Article three of the treaty establishing the European stability mechanism, which states, [i]inter alia[/i], that the purpose of the ESM shall be to mobilise funding and provide stability support to members, if indispensable to safeguard the financial stability of the euro area as a whole and of its member states, would take precedence over recital five in any conflict over the interpretation of the treaty. [22011/12]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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Question 167: To ask the Minister for Finance with regard to the treaty establishing the European stability mechanism, if it is the case that the greater legal status of article three over recital five would mean that, if Ireland needed to draw on the ESM for funding after the end of the current troika programme, the ESM would be unable, or unlikely, to refuse it, as this would likely undermine the financial stability of the euro area as a whole and of its member states, in contravention of article three. [22012/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 165 to 167, inclusive, together.

It is the intention of the State to ratify the Stability Treaty (assuming its acceptance by the People in referendum on 31st May) and to ratify the ESM Treaty (assuming its approval by the Oireachtas in primary legislation). It is not the intention of the Government to rely on any interpretation of the articles in the operative part of the European Stability Mechanism Treaty as being in conflict with or taking precedence over any recital in the preambles including recital number 5 as referred to in your questions. While it is a question for the ESM to decide whether to fund a particular applicant for financial assistance under the terms of the ESM, both Treaties make it clear that only countries that ratify the Stability Treaty will have access to the ESM from March 2013.

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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Question 168: To ask the Minister for Finance if it is the case that Ireland has an effective veto over the ESM due to the fact that Ireland has to ratify the amendment to Article 136 of the treaty on the functioning of the European Union in order for the ESM to be established; if he has considered invoking this veto in order to have recital five of the ESM treaty removed or amended, and what the outcome of that consideration was; if he agrees that recital five is not in our national interest and that its removal or amendment, therefore, would be in our national interest; and if he has not considered invoking the veto over the ESM by refusing to ratify the amendment to Article 136, if he will explain why not. [22013/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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On 25 March 2011, the European Council agreed to amend Article 136 of the Treaty on the Functioning of the European Union to insert the following text: '3. The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.'. Separately, a Treaty to establish the European Stability Mechanism has been agreed among euro area countries. This is an intergovernmental treaty that stands outside the EU Treaty framework. Both instruments are separate and contain their own requirements for entry into force.

The amendment to Article 136 will enter into force when approved by all Member States of the EU, including Ireland, according to their national requirements. The target date for this to be done is 1 January 2013. The ESM Treaty, will enter into force when ratified by signatories whose subscriptions represent 90% of the total initial subscriptions. The target date for this is 1 July 2012. The Government considers that it is strongly in Ireland's best interests for both instruments to enter into force as soon as possible. Not approving the amendment of Article 136 will not prevent the ESM Treaty from entering into force once the necessary conditions are met.

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