Extraordinary Session of Riigikogu: Bill on Ratification and Implementation of the Treaty Establishing the European Stability Mechanism passed first reading
The Riigikogu ratified with 86 votes in favour the amendment to the Treaty on the Functioning of the European Union (237 SE), initiated by the Government. This amendment concerns Article 136 of the Treaty on the Functioning of the European Union relating to the establishment of a European stability mechanism for the European Union states whose currency is the euro. The aim of the amendment is to provide expressly in the treaties establishing the European Union that Member States may establish a permanent European Stability Mechanism (hereinafter the ESM). According to the amendment, 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. Two members of the Riigikogu abstained in the voting.
On the motion of the Finance Committee, the first reading of the Bill on Ratification and Implementation of the Treaty Establishing the European Stability Mechanism (254 SE), initiated by the Government, was concluded. The Treaty Establishing the European Stability Mechanism (ESM) was signed in Brussels on 2 February 2012. This Bill concerns the national performance of the financial obligations assumed by the state. According to the Bill, Estonia agrees to participate in the European Stability Mechanism to the extent of 13,020 shares with a nominal value of 1.320 billion euro, of which 148.8 million euro will be contributed as paid-in capital within five years as of the entry into force of the Treaty and 1.1532 billion euro will be contributed as calls of capital on receipt of a capital call pursuant to the Treaty. The amounts to be paid to the ESM will be reflected in the state budget. According to the Bill, the Government will give a written overview to the Riigikogu once a year on the stability supports granted by the ESM and the participation of the Republic of Estonia in the ESM. All euro area Member States will become ESM Members and stability support will be granted, under strict economic policy conditionality, to ESM Members which are experiencing severe financing problems. In setting the conditions and financing economic programmes, the ESM will cooperate with the International Monetary Fund. The Bill is connected with the Act on Ratification of the Amendment to the Treaty on the Functioning of the European Union, passed in the Riigikogu on 8 August 2012, and the Bill on Ratification of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.
The Minister of Finance Jürgen Ligi said in his report: “The ESM must not be understood as an international obligation to spend money but as an opportunity to support one’s own economy at the spot where greater obstacles arise. It is much cheaper to ensure economic security together rather than alone. For us, the ESM is an opportunity to organise our European economic environment and to make our partners assume responsibility and launch reforms.”
The Estonian Centre Party Faction moved to reject this Bill at the first reading. 33 members of the Riigikogu voted in favour of the motion and 56 voted against. Thus, the motion to reject was not supported and the Bill was sent to the second reading scheduled for the extraordinary session of the Riigikogu in the chamber of Toompea castle on 30 August at 10 a.m.
The Riigikogu Press Service