EU summit: Finland’s concerns remain unanswered

Finland’s constitutional concerns surrounding the European Stability Mechanism (ESM) remained unanswered at the EU summit at the end of last week.
      Minister of Finance Jutta Urpilainen (SDP) said on Palriament on Friday that if the ESM adopts qualified majority voting, Finland could remain outside the mechanism.
      The final declaration passed by the EU summit on Friday changes the rules of the ESM in such a way that an 85 per cent majority would be sufficient for making decisions in an emergency. However, Finnish Prime Minister Jyrki Katainen (Nat. Coalition Party) insisted on a condition that the qualified majority rule should take effect only if the Finnish Parliament passes it.
     
The final declaration of the meeting was written on a very general level, making it difficult to determine if the agreement would go against the Finnish constitution.
      At the summit, all other countries were ready to agree to qualified majority decision-making in the ESM. Finland wants to adhere to the principle of decision-making by consensus.
     
The Grand Committee and the Constitutional Law Committee of the Finnish Parliament voiced the view on Thursday that decision-making in the ESM by an 85 per cent qualified majority would interfere with Finnish decision-making power over the country’s own affairs.
      Under the Finnish constitution, Parliament needs to know precisely what commitments it has made over the use of state funds.
      If the ESM treaty were to conflict with the constitution as it is now written, its passage by the Finnish Parliament would require a two-thirds majority, which would be very unlikely under the present political balance in Parliament.
     
In the declaration of the EU summit, the wording was changed from the draft circulated in the early part of the week.
      In the new version, decisions can be made by an 85 per cent qualified majority “in an emergency”.
      An emergency would be a situation in which the European Commission and the European Central Bank were to find that the financial stability of the European Central Bank were under serious threat. A key issue from the point of view of the Finnish constitution is what decisions are to be made under the emergency clauses.
     
The declaration can be interpreted in such a way that emergency procedure would apply only to decisions on granting financial assistance. This could be important from Finland’s point of view, because augmenting the capital of the ESM could not be decided by the qualified majority, and would still require consensus.
      “Qualified majority decisions as such are not in violation of the constitution. This is a question about what decisions can be made on the basis of the final text of the agreement”, says Tuomas Ojanen, Professor of Constitutional Law at the University of Helsinki.
      “For now it is unclear if decisions on raising capital can be made on the basis of the emergency clause. A separate question is the extent to which Parliament’s budgetary power might be restricted by financing decisions made under emergency procedure”, says Juha Raitio, Professor of European Law at the University of Helsinki.
     
On Friday, Johannes Koskinen (SDP), the chairman of the Parliament’s Constitutional Law Committee, said that it is his view that Parliament can give its approval to the changes in ESM decision-making by simple majority, assuming that the final draft places an upper limit on the amount of capital that Finland is expected to put up.
      Koskinen says that another option is that Finland could be granted a qualification under which it would not be required to submit to majority decisions of signatories in situations in which liabilities are increased.
      Johannes Koskinen says that passage of the treaty by simple majority depends on “how high the roof is, and what the decision-making mechanism is below it”.
     
Koskinen points out that the declaration issued on Friday is only a “political paper” about a union that is to get economic policy power, on whose basis the Ecofin meeting of EU ministers of finance will start to handle treaty texts.
      “What is most important is that our reservations are taken seriously, and that consideration is given to what should be changed in the agreement. Finland should not just be slipped in.”
     
As alternatives to consensus, Koskinen sees models in which Finland reserves the right to refuse to grant money.
      “This would mean that no such economic responsibilities would arise in which Finland would not be a decision-maker.”
     


Previously in HS International Edition:
  What will happen to the euro? (2.12.2011)
  Finland sticks to consensus demand at euro summit (9.12.2011)

See also:
  PM: Finland needs to be part of ESM (12.12.2011)

Links:
  European Stability Mechanism (Wikipedia)