CYIL 2014

EMIL RUFFER CYIL 5 ȍ2014Ȏ these new rescue mechanisms before the FCC, the amendment of the Treaty on the Functioning of the European Union (hereinafter as the “TFEU”) was seen as a possible way out, and it was soon put into practice. 9 On 25 March 2011 the European Council adopted Decision 2011/199, 10 providing for the addition of a new provision declaring that the Member States of the Eurozone may establish a stability mechanism for the purpose of safeguarding the stability of the euro area as a whole, but the granting of any required financial assistance under such mechanism would be made subject to strict conditionality, i.e. ‘strings would be attached’ as far as the economic reforms and fiscal measures of the assisted state are concerned. The whole added paragraph 3 reads as follows: “ 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. ” That amendment of the treaty was to take effect on 1 January 2013, subject to having been approved by the Member States in accordance with their constitutional requirements. However, the ratification process was in the end much longer than expected, to a large extent due to the reluctance of the then president of the Czech Republic, Mr. Václav Klaus, to ratify Decision 2011/199. 11 It entered into force only on 1 May 2013, which in turn raised another legal question as to the proper sequence of things. The issue was whether the amendment of the TFEU should have entered into force prior to the establishment of the ESM, i.e. before the ESM Treaty entered into force. The CJEU then had to address also this challenge in the Pringle case. On 2 February 2012 the (then) euro area Member States 12 concluded the ESM Treaty establishing the ESM, which was conceived as an international financial 9 For a very good overview of the measures adopted prior to the ESM Treaty and the rationale of the whole exercise, see B. de Witte and T. Beukers: The Court of Justice Approves the Creation of the European Stability Mechanism: Pringle, 50 C.M.L. Rev . 805 (2013), pp. 808-812. 10 European Council Decision 2011/199/EU of 25 March 2011 amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro (OJ L 91, 6.4.2011, p. 1). 11 The ratification on behalf of the Czech Republic, as the last Member State to do so, was completed only on 23 April 2013, when the instrument of ratification was deposited with the Secretary-General of the Council. It had to be executed by the newly elected president, Mr. Miloš Zeman, since his predecessor refused to do so in a rather unconstitutional manner. Fortunately, the completion of ratification did not stand in the way of the establishment and operation of the ESM, but still it was not the best example of the Czech Republic’s contribution to swift adoption of measures aimed at safeguarding the financial stability of the Eurozone and the EMU as a whole. 12 Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. Following its joining of the Eurozone, Latvia acceded to the ESM Treaty on 21 February 2014, with entry into force on 13 March 2014 in accordance with Art. 48(3) ESM Treaty (on the twentieth day following the deposit of its instrument of accession). There are thus currently 18 Contracting Parties to the ESM Treaty, with Lithuania being the next in line, as it should enter the Eurozone in 2015.

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