VIII - ESM Treaty

The European Stability Mechanism (ESM) Treaty was signed on July 11 2011. It was later renegotiated and a new ESM Treaty was signed on February 2, 2012. The Treaty provides a permanent emergency fund that is intended to succeed the temporary emergency funds. It entered into force on September 27, 2012 for 16 contracting parties (Estonia completed ratification on October 3). The 17 contracting parties are the member states of the Eurozone, but the ESM Treaty is concluded outside EU law.    
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What political/legal difficulties did Belgium encounter in the negotiation of the ESM Treaty, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process.

The question was debated[1] – referring to the amendment of art. 136 TFEU – whether the ESM was a mixed treaty that would need approval of the regions too.  According to the Minister of Finance, the ESM Treaty concerned only the Federal level, for three reasons:

First, the immunity of the ESM and its operational framework does not involve Belgium as such. Second, the obligation to attach a collective action-clause to all governmental debt (art. 12 ESM Treaty) only applies to federal, national, debt, and not to regional debt.[2] Third, the regions do not contribute to the financial costs of the ESM.[3]

Although the issue of budgetary sovereignty and “additional transfers of competences to the EU” was criticised, this opinion remained outside of the mainstream political consensus.[4]

How has the ESM Treaty been ratified in Belgium and on what legal basis/argumentation?

For the internal distribution of competences, see above VIII.1.

Ratification of the ESM Treaty took place by a bicameral Act, the Law of June 20th, 2012.[5] Apparently, the Flemish Government has composed a draft decree approving the ESM Treaty in the beginning of 2014.[6] The current status of that Flemish draft is unclear; we can assume the intervening elections in May 2014 precluded further development of this draft decree. S explained under VIII.1, the argument rejecting regional approval of the ESM Treaty might be shaky, but it has not been challenged. The Flemish draft thus only had political value. At any rate, the proposal has not been taken up after the elections.

Ratification difficulties 
What political/legal difficulties did Belgium encounter during the ratification of the ESM Treaty?

None. It was noted by the Minister of Finance that “Belgium has proportionally more to gain by the ESM than to lose”.[7] Given the spreads on Belgian debt during the euro crisis, this European initiative was seen as an opportunity.

The fraction of both green parties (Groen and Ecolo) proposed two additional ideas: a binding referendum approving the ESM, and a law instructing the Belgian representative in the Board of Governors to inform Parliament of his actions.[8] None of these was given effect.

A minor issue of federal division of competences arose, see VIII.1 and VIII.2.

Case law         
Is there a (constitutional) court judgment on the ESM Treaty?

Yes, in the sole case 156/2012, the law ratifying the ESM Treaty was challenged before the Constitutional Court, but the appeal was lodged after expiry of the deadline.[9]

Capital payment   
What is the role of Parliament in the payment of the (first instalment of) paid-in capital required by the ESM Treaty (article 36 ESM Treaty)? What relevant debates have arisen in relation to this payment?

No specific role. The Belgian financial participation in euro crisis mechanisms has been executed through quarterly adjustments of the formal budgetary law.

Application & Parliament     
What is the role of Parliament in the application of the ESM Treaty, for example with regard to decisions to grant financial assistance and the disbursement of tranches, which both require unanimous adoption by the Board of Governors composed of the national Finance Ministers.

In the ratification debates, the issue of transparency and control was raised. The government’s position, supported by the majority was to exclude any instruction before the meeting of the Board of Governors, but to allow Parliament to ask for a debriefing afterwards.[10]

Application difficulties    
What political/legal difficulties did Belgium encounter in the application of the ESM Treaty?

The issue was raised, but not decided, what were to happen if Belgium would apply for emergency assistance by the ESM. In that case, the federal government would conclude the memorandum, but the regions would also be bound by the objectives. As the Minister stated: “The issue how to involve the regions and communities does not pertain to this Treaty”.[11]

Have there been any relevant changes in national legislation in order to implement or to comply with requirements set by the ESM-Treaty?


What other information is relevant with regard to Belgium and the ESM Treaty?

No other relevant information.

[1] The Council of State merely posed the question but did not give an opinion: Parl. Doc. Senate, 2011-12, nr. 1598/1, p. 39 – see also K. Brams & T. Corthaut, ‘De financiering van de gemeenschappen en de gewesten na de Zesde Staatshervorming – responsabilisering in de schaduw van Europa’ in A. Alen et al. (eds.), Het federale België na de zesde staatshervorming (die Keure 2014) 608-609.

[2] Questionable though – art. 49bis of the Special Act on the Finances of the Regions and Communities explicitly confirms the competence for regions to emit debt instruments.

[3] Parl. Doc. Senate, 2011-12, nr. 1598/2, p. 17.

[4] Parl. Doc. Senate, 2011-12, nr. 1598/2, p. 5.

[5] Published in the Official Gazette July 9th, 2012.

[6] See the advice of the SERV of March 24th 2014, online at

[7] Parl. Doc. Senate, 2011-12, nr. 1598/2, p. 15.

[8] See proposals nrs. 1612 and 1613, submitted to the Senate.

[9] Which is limited to 60 days after publication. Direct constitutional challenges to an Act assenting to a Treaty can only be brought within 60 days of publication: see article 3(2) of the Special Act on the Constitutional Court. Indirect challenges (prejudicial questions posed by ordinary judges) to assenting Acts concerning the TEU, TFEU and ECHR are not allowed (article 26, §1bis of the Special Act on the Constitutional Court)..

[10] Parl. Doc. Senate, 2011-12, nr. 1598/2, p. 16.

[11] Parl. Doc. Senate, 2011-12, nr. 1598/1, p. 10.