Parties agree on treaty referral

The Supreme Court, the Government and Independent TD Thomas Pringle have agreed on three issues to be referred to the Court of Justice of the European Union which will determine the lawfulness of the ESM Treaty providing for a bailout fund for distressed euro zone states.

The seven judge court is asking the CJEU to address the issues under its accelerated procedures on grounds the matter is "of exceptional urgency".

It noted the Government takes the view it is essential Ireland be involved in the ESM Treaty from the outset and the Government's concern a range of adverse consequences may ensure if Ireland does not ratify the Treaty in the short term.

The court is also expected to rule within days on Mr Pringle's application for an injunction stopping the Government ratifying the Treaty now on grounds including his claim the Treaty is unlawful.

Mr Pringle has disputed that ratification is urgent in circumstances including Germany will not ratify before at least September 12th due to a legal action there.

His counsel John Rogers SC argued the status quo should be maintained pending the CJEU decision because, if the Treaty was found to be unlawful, this State would have acted illegally. The whole point of the reference to the CJEU was to establish whether this Treaty undermines the basis tenets of economic and monetary union, he said.

In resisting the injunction, Michael Cush SC, for the Government, argued speedy ratification is essential in Ireland's national interest. If the CJEU found in favour of Mr Pringle on all three issues referred, that would have the effect of putting an end to the ESM Treaty and Mr Pringle would have his remedy, counsel added.

The court also heard the Department of Finance takes the view it would be good for Ireland to ratify the Treaty as soon as possible, even if it was later found unlawful, as the financial markets would take a positive view of Irish ratification.

The Treaty forms an integral element of Ireland's proposed re-entry to those markets, Jim O'Brien of the Department said in an affidavit. The need for the ESM in the Euro area was also becoming more an more acute.

Today, the court and the sides discussed the wording of three questions to be referred to the CJEU for determination arising from Mr Pringle's case.

Mr Pringle had appealed to the Supreme Court against the High Court's rejection of his claims the Treaty breaches the Irish Constitution and EU law. The Supreme Court has reserved judgment on the constitutional argument, has agreed to adjourn other matters pending the outcome of the referral to the CJEU and is expected to rule shortly on the injunction application.

The precise wording of all three questions to be referred has to be finalised but their general focus was agreed yesterday. They essentially ask whether a euro zone country ratifying the ESM Treaty is acting consistently with the EU Treaties and whether the European Council Decision providing for an ESM is consistent with that.

The Supreme Court had itself decided to refer an issue relating to the validity of the March 2011 European Council Decision providing for an ESM.

The second issue relates to whether euro zone states can form the ESM BEFORE the coming into force of the European Council Decision of March 2011 on the set date of January 2013. That issue raises questions as to whether the Decision can come into effect unless approved by all 27 member states of the EU.

The third issue relates to whether the ESM Treaty is compatible with other EU Treaties. That issues arises from Mr Pringle's claim the ESM Treaty breaches provisions of the EU Treaties on grounds including allegedly providing for a form of economic and monetary union outside those treaties.

The Supreme Court will give judgment on an unspecified date on Mr Pringle's claim the Treaty breaches the Irish Constitution on grounds including it sanctions a form of Economic and Monetary Union not approved in referendums by the Irish people.

Mr Pringle contends the Treaty unconstitutionally irreversibly commits Ireland to a policy into the future of diverting our financial resources to save the Euro. The Government rejects those claims and argues, while the Treaty commits Ireland to transferring up to €11.1bn for a particular purpose, any further financial contribution would have to be approved by the Dáil.