ESM Bailout Fund Clears Legal Hurdle

The EU’s top court has ruled that the eurozone’s new permanent bailout fund, the European Stability Mechanism (ESM), is in line with EU law.

The European Court of Justice in Luxembourg had examined a case lodged by an Irish MP, Thomas Pringle. He said the ESM altered the EU’s powers.

The ESM was launched in October as a permanent agency, based in Luxembourg.

From 2014 it will have up to 500bn euros (£405bn; $650bn) to help countries in difficulty.

The rescue fund is available to the 17 eurozone countries – but loans will only be granted under strict conditions, demanding that countries in trouble undertake budget reforms.

Mr Pringle complained to the Irish courts, saying the ESM agreement should trigger an Irish referendum because, in his view, it transferred significant powers to the European Union.

The ESM was incorporated into the Treaty on the Functioning of the European Union (TFEU), through a new provision.

The Luxembourg judges said their examination had “disclosed nothing capable of affecting the validity of Decision 2011/199” – the government decision that launched the ESM.

via BBC

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