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Thomas Pringle Q&A: ESM Constitutional Challenge
national | eu | news report Wednesday April 18, 2012 13:17 by O.O'C. - National Platform EU Research & Information Centre 01-8305792
Legal Proceedings have taken by Thomas Pringle TD, member of the Dáil for the Donegal South-West constituency, challenging the Irish Government on fundamental aspects of a far-reaching amendment to the EU treaties. Both the European Stability Mechanism (ESM) Treaty and the Stability, Coordination and Governance in the Economic and Monetary Union (Fiscal Compact) Treaty are under consideration.
Q: Who are the solicitors acting for you on this case?
Q: What are you suggesting by way of Referendum? Or an Alternative course of action?
A: The decision to refer the SCG Treaty ratification question to the Irish people by way of referendum was undoubtedly correct.
The SCG Treaty is one of two interdependent treaties.
The second treaty with which it is so intertwined must also be submitted to referendum.
Because of the EU Treaty issues and the Constitutional issues raised above, the Government is not in our view entitled to seek to approve the proposed amendment to Article 136 as it stands. Those difficulties require to be addressed further at EU level at least initially.
Recognising that these issues are exceptionally complex and exceptionally grave matters and the pressures from all sides is acknowledged as being unrelenting and intense, nonetheless these pressures must not be permitted to override the requirements of Bunreacht Na hÉireann as they have been interpreted particularly by the Supreme Court in Crotty v An Taoiseach.
Q: Why are you seeking legal advice in respect to Constitutional limits?
A: The Constitutional limits on the type of international agreements that may be entered into by the Government on behalf of the State without the approval of the people by way of referendum are found in the judgments of the Supreme Court in Crotty v An Taoiseach 
They are encapsulated in this comment by Hederman J: “The State's organs cannot contract to exercise in a particular procedure their policy-making roles or in any way to fetter powers bestowed unfettered by the Constitution. They are the guardians of these powers - not the disposers of them.”
Walsh J addressed the central issue in this part of the case as follows –
"... It is not within the competence of the Government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered so to do by the Constitution. They are both creatures of the Constitution and are not empowered to act free from the restraints of the Constitution."
As Walsh J observed "To the judicial organ of Government alone is given the power conclusively to decide if there has been a breach of constitutional restraints."
It is clear that the ESM Treaty could only be ratified by Ireland if ratification first secures the approval of the people by way of referendum.
Q: This is coming at a time when the date for the referendum has been set? Why take this case now?
A: In my opinion "The Devil is in the Detail”
The ESM Treaty breaches both the inclusivity requirement of the amendment to Article 136 to include all eurozone members and the requirement that the Stability Mechanism only be activated if "indispensible to safeguard the stability of the euro area as a whole".
Taking this approach further difficulty immediately becomes apparent, which is the effect on Article 125 TFEU, commonly called the “no bailout” clause.
Article 125 states that “The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State.”
The amendment to Article 136 TFEU is intended to circumvent the provisions of Article 125.
The Article 136 amendment purports to amend the TFEU so as to permit the creation of a bailout fund through the establishment of a Stability Mechanism by way of a new institution set up under a new treaty which is not an EU treaty.
It is internally contradictory to use the proposed amendment to the TFEU to that end, so as to evade the clear terms of the existing Treaty Article 125.
By setting up the ESM as a new independent agency outside the EU system, the European Union is weakened not strengthened.
This is a breach of EU law obligations and it is inconsistent with the terms of Article 29.4.4 of the Constitution of Ireland (Bunreacht Na hÉireann). By virtue of that Article, Ireland as a member State of the Union having an embedded Constitutional commitment to that Union cannot agree to a measure which would subvert the Union. In addition, the amendment does not enjoy the immunity provided by Article 29.4.6 of the Constitution since such immunity could only apply to valid acts of the Institutions.
This weakening effect on the Union is further illustrated by the provision in the ESM Treaty mentioned above, mirroring a provision in the Fiscal Treaty, allowing the treaties to come into effect for a subgroup of the signatory States once a specified minimum level of ratification is achieved.
This approach envisages and provides for what may be then be a sub-group (possibly as few as eight) of a sub-group of EU members (the 17 eurozone States) striking off in a particular direction through the vehicle of a non-EU institution and while doing so, purporting to give that body legal authority to avail of Union institutions.
Putting the matter positively, if it is intended to establish a bailout mechanism consistent with the existing EU treaties, then Article 125 should be deleted or suitably amended and replaced.
If the EU States were unanimously agreed on the need to establish the ESM (and indeed the Fiscal Pact), then both would be entirely capable of achievement within the EU treaty framework and with due regard to the existing EU and Irish and other member State Constitutional norms.
Q: If the SCG Treaty referendum in Ireland is lost...?
A: The Government claims that in the event that the people reject the Fiscal Treaty, the State will then be ineligible to seek any ESM funding which it might require after mid-2013.
With all due respect such a claim is misleading.
The State has no entitlement to access the ESM now.
The ESM does not even exist yet.
Irish approval and indeed the approval of other States is still required so as to ratify both the Article 136 amendment and the ESM Treaty. The supposed ineligibility is a direct consequence of the change made in February 2012 (and signed by Ambassadors) to the wording of the original ESM Treaty signed by the Minister for Finance and his counterparts in July 2011.
This change is found in the preamble to the current version of the treaty at Recital No. 5 and renders access to the ESM conditional upon prior ratification of the Fiscal Compact.