New wording of ESM treaty set to pass in Finnish Parliament

Experts say constitutional conflict has been removed

Johannes Koskinen

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The Constitutional Law Committee of the Finnish Parliament is expected to decide that the proposed new decision-making process of the proposed permanent European Stability Mechanism (ESM) is not in conflict with the Finnish constitution.
      The matter has raised controversy in Finland since early December when the summit of eurozone countries decided on changes to the ESM for bailing out countries facing economic crisis.
      Minister of Finance Jutta Urpilainen (SDP) negotiated a compromise with the other eurozone countries in Brussels which corresponds to the goals of the Finnish government. Now the Finnish parliament is being consulted on the matter.
     
On Thursday the Constitutional Law Committee held discussions with several experts in constitutional law, all of whom agreed that the constitutional conflict had been sufficiently addressed.
      Constitutional Law Committee chairman Johannes Koskinen (SDP) says that the misgivings that the committee had toward certain aspects of the proposal had eased.
     
The eurozone countries deciced at their summit in January that the ESM could, in emergency situations, made decisions by qualified majority, instead of consensus, as was the intention in the original draft ESM treaty.
      At the meeting, Finnish Prime Minister Jyrki Katainen (Nat. Coalition Party) insisted on a notation in the decision that the qualified majority rule would be acceptable only if it is approved by the Finnish Parliament.
      Katainen knew already then that the Constitutional Law Committee was of the view that any qualified majority rules in the ESM would be at odds with Finland’s right to self-determination. At worst, Finland might end up watching on the sidelines as large euro countries make decisions affecting the Finnish national budget.
     
Finance Minister Urpilainen succeeded in negotiating a change in the text of the treaty under which qualified majority decisions could apply only to financial support given by the ESM. According to the new wording it is not possible to if the member states would be required to contribute more to the capital of the ESM, or if the ESM’s total capital would have to be raised.
      Under the compromise, financial support could be voted on by qualified majority only if the situation is urgent, and if the sustainability, and not just the stability of the eurozone, is at stake.


Previously in HS International Edition:
  Finland prevails in ESM decision-making dispute (24.1.2012)
  Solution in sight to European Stability Mechanism dispute (19.1.2012)
  Finland sticks to consensus demand at euro summit (9.12.2011)

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