Decision on limited EU treaty change tonight

Article published on Dec. 16, 2010
Article published on Dec. 16, 2010
By Anna-Karin Friis The EU summit on Thursday December 16th did not drag on as long as the dinner at the previous EU leaders' meeting in October. Maybe that was as such a good sign. According to European Council president Herman van Rompuy, the general features of the future European Financial Stability Mechanism have been agreed on.
Decision was reached on a limited change to the EU treaties to accomodate the future financial mechanism. That will be done through a simplified revision procedure and the aim is for the revised treaty to enter into force from January 2013.

That does by a cautious estimate seem rather over-optimistic. Not only will the change have to be prepared, but also ratified in each member state. How likely is an EU treaty revision to be adopted on Ireland?

British prime minister David Cameron wanted to make certain that non-euro countries do not get sucked into another bail-out when this new financial mechanism, effectively a rescue system, takes effect in 2013. The mechanism will be activated by mutual consent of the euro area member states in case of risk to the stability of the euro area as a whole. The size and the scope of the new bail-out fund is still unknown, probably because it is still very controversial among EU governments.

Member states whose currency is not the euro will, if they so wish, decide to participate in operations conducted by the mechanism on an ad hoc basis. Non-euro members, such as the UK and Sweden voluntarily helped out in the previous rescue agreements for the Irish and Greek state finances, but they will not be obliged to participate in any future operations. The German government urged for the financial mechanism to be agreed only as a last resort. The EU leaders tonight did decide that the granting of any required financial assistance under the future financial mechanism will be made subject to strict conditionality. A victory, or is it a Pyrrhic victory? Nobody seems to know exactly how much many hundreds of billions of euro will be tied down to the future fund and still the question remains on how this will be received in European public opinion.