THE GOVERNMENT is to proceed with seeking Ireland’s ratification of the treaty establishing the eurozone’s new bailout fund, and approving the necessary changes to the EU’s founding treaties, this week.
After Irish voters conclusively gave their backing to the Fiscal Compact at Thursday’s referendum, the government now proposes to hold Dáil votes on two related pieces of legislation when it reconvenes this Wednesday.
TDs will vote on Wednesday on the European Communities (Amendment) Bill 2012, which would see Ireland formally approve a change to Article 136 of the Treaty on the Functioning of the European Union – amending its so-called ‘no bailout’ clause.
This allows for what is known as a ‘simplified revision procedure’, where technical changes can be made to the EU’s main treaties by the consensus of European heads of government, provided that each country then ratifies the decision in line with its own national requirements.
On Thursday, TDs will separately be asked to vote on Ireland’s ratification of the European Stability Mechanism Treaty itself, which exploits the Article 136 change by setting up a new permanent bailout facility.
That treaty – similar to the Fiscal Compact – can still go ahead without Irish participation, as it takes effect once countries providing 90 per cent of its funds have agreed to ratify it.
Ireland is responsible for just under 1.59 per cent of the ESM’s funding, which will begin at €80 billion – meaning its original cash contributions will amount to €1.27 billion.
The ESM will also require members to provide guarantees for ‘callable capital’ to a total of €700 billion, however – meaning Ireland’s total potential exposure to the fund is over €11.1 billion.
The government says the original cash €1.27 billion had been already budgeted for, so the proposals to bring forward the date of establishment – from January 2013 to July 2012 – does not effect its overall budget position.
The ESM is currently the subject of a High Court challenge from Donegal South-West TD Thomas Pringle, however, who believes its provisions may be unconstitutional and that the bill therefore needs to be put to a referendum.