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.
(http://www.european-council.europa.eu/eurozone-governance/esm-treaty-signature?lang=it and http://www.esm.europa.eu/pdf/FAQ%20ESM%2008102012.pdf)
What political/legal difficulties did Greece 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.
No major political and legal difficulties were encountered by Greece in the negotiation of the ESM Treaty. PA.SO.K. (the Government party during most of the time of the negotiations, namely until the 11th of November 2011) sees the creation of a permanent support mechanism as a success against the hesitations of European partners, especially Germany, as a proof of the tough negotiations carried out by Greece at the European level, and as a personal success of the Prime Minister, Giorgos Papandreou, who was the first to propose such a mechanism. More precisely, PA.SO.K. presents the ESM as a political victory, and as a step towards the completion of the deficient EMU and European integration. ESM is perceived as a mechanism of protection of Eurozone countries from asymmetric risks, as the admission of the European dimension of the financial crisis, and as a reorientation of Europe towards a more political union. It shows recognition of the sacrifices of the Greek people, and the decisiveness of the Eurozone partners to support Greece after 2012. In the negotiations, the official position of the Government was thus positive about the creation of the ESM, a discussion which has been connected with the creation of Eurobonds, with the buying of national bonds by the ECB, and with the taxation of financial transactions. The Government, however, has been negative about the imposition of political sanctions to members with a high debt, a German proposal that was in the end not adopted. However, the deputies of PA.SO.K. have emphasized their hope for more courageous decisions by Europe and criticized the political indecisiveness and hesitation of European leaders. Moreover, the negotiations of the ESM Treaty have provoked the criticism of certain members of the Government party, who perceived the ESM as a default mechanism for the protection of creditors.
N.D., which participated in the Government coalition during the final negotiations of the treaty and during its ratification, namely since the 11th of November 2011, also sees the ESM as a progress. However, it criticizes the participation of the IMF and the fact that the ESM has been created too late. In addition, the deputies of N.D. criticize the strict conditionality under which financial support is given by the ESM and emphasize the need for growth.
The most virulent criticism against the ESM came from the parties K.K.E. and SY.RIZ.A. Indeed, for these left wing parties the ESM is seen as a continuation of the EFSF, the Memorandum, and the austerity measures. More precisely, Alexis Tsipras has strongly criticized the implication of the IMF in the Eurozone, institutionalized through the ESM Treaty. He accused the Government of not effectively negotiating and of not listening to the propositions of the Left. He also underlined that the ESM does not bring about any substantial changes to the deficient structure of the Eurozone, but consists only in an admission that Greece will not be able to borrow from the markets in 2013. According to SY.RIZ.A., the decision to create the ESM has as a major goal to protect creditors and is positive only for them and not for the Greek people.
K.K.E. follows a more radical line of reasoning. According to its members, the participation of Greece in imperialistic organizations such as the EU serves only the capital and business groups, and not the lower classes. The ESM is a proof of the unpopular character of the EU and the Eurozone, as it is an imperialistic mechanism of bankruptcy, which cannot counter the real causes of the crisis of capitalism, and which only protects creditors. The activation of the ESM is submitted to strict conditionality which undermines social and labor rights. Moreover, this conditionality entails considerable limitations to national sovereignty.
How has the ESM Treaty been ratified in Greece and on what legal basis/argumentation?
Things have been complicated as far as the ratification procedure is concerned, the debates for which took place during the campaign for the elections of the 6th May 2012. The ratification of the ESM treaty was part of a more general draft bill, which also contained the amendment of article 136 TFEU and the ratification of the Fiscal Compact (see questions V.3 and IX.3). The bill ratifying the ESM treaty was drafted on March 15th, 2012 and was debated and voted in Parliament on March 28th, 2012. It was voted in one day, with a majority of 194 deputies out of the 253 present voting in favor (total of deputies is 300). The deputies of PA.SO.K. and N.D., the two parties of the government coalition at the time, voted in favor. The members of SY.RIZ.A., DIM.AR., LA.O.S., and DI.SY. voted against. It is interesting to note that LA.O.S. had participated in the government at the time of the decision of 9 December 2011 for the (the political decision leading to the 136 TFEU amendment and the Fiscal Compact).
The statute was voted according to the regular parliamentary procedure of articles 70 f. of the Constitution. The constitutional basis invoked by the Government for the following of this procedure was article 28 paragraph 1 of the Constitution, which states that “The generally recognised rules of international law, as well as international conventions as of the time they are sanctioned by statute and become operative according to their respective conditions, shall be an integral part of domestic Greek law and shall prevail over any contrary provision of the law. The rules of international law and of international conventions shall be applicable to aliens only under the condition of reciprocity.” An interpretive statement added with the constitutional reform of 2001 declares that “Article 28 is the basis for the participation of the Country in the procedures of European integration.” Although the ESM has been characterized by the government as “an inter-state mechanism that does not expand the competences of the EU”, its concrete legal status has not been discussed and the terms “Eurozone stability mechanism”, “European Stability Mechanism” and “stability mechanism of the European Union” are used as synonymous in the parliamentary debates. During the negotiations of the ESM treaty in the past, PA.SO.K. defended that it possessed the status of EU primary law. The article invoked by the Government as a basis for the ratification, however, does not specify the majority required for the vote of the statute ratifying the treaty.
During the parliamentary debates on the 28th of March 2012, the deputies of the opposition accused the PA.SO.K./ND Government of hiding these treaties from the Greek people, through the concise parliamentary procedure mobilized for their ratification. In general, especially the deputies of SY.RIZ.A. and LA.O.S., repeatedly criticized the functioning of the Parliament and the negligence to the parliamentary procedure and monitoring by the Government. In response, the deputies of PA.SO.K. claimed that they were “not acting in absentia of the Greek people because, by voting these treaties, [they were] supporting the basic choice of the Greek people, which is that the country remains in the Eurozone.”
More precisely, deputies of LA.O.S. objected that the statute in question, because of its crucial importance for Greece and for Europe in general, and because of the fact that it attributes constitutional competences concerning fiscal and budgetary policy to organs of international organizations, should be voted according to the procedure defined in paragraph 2 of article 28 of the Constitution. According to this paragraph, “Authorities provided by the Constitution may by treaty or agreement be vested in agencies of international organizations, when this serves an important national interest and promotes cooperation with other States. A majority of three-fifths of the total number of Members of Parliament shall be necessary to vote the law sanctioning the treaty or agreement.” (180/300). The members of LA.O.S. argued that it was the Fiscal Compact that imposed a qualified majority for ratification in order to enter into force. They argued that the treaties under ratification were changing the structure and the decision-making procedure inside the Eurozone, and thus they constituted a concession of constitutional competences to the Eurozone organs. Thus, in order to preserve the validity of the voting procedure and to prove that the statute had been adopted with the qualified majority required, they demanded the procedure of nominal vote, which was followed at the end.
The members of SY.RIZ.A. rejected the competence of Parliament to amend the treaties of the European Union. Reiterating objections already raised during the negotiation of the amendment of article 136 TFEU for the creation of a stability mechanism (see question V.1), they argued that the treaty amendment, as well as the ESM and Fiscal Compact entailed an amendment of the Constitution. Thus, a constitutional reform or a referendum was required, following the example of other European countries, like Ireland. In order to support the argument, the deputies invoked article 3 paragraph 2 of the Fiscal Compact. Thus, they invited the government to proceed to a referendum for the ratification of these provisions, or, at least, to wait for the elections, which were scheduled for the 6th of May. In any case, they argued that the government did not want to follow the special procedure of article 28 paragraph 2 of the Constitution, even though it possessed the qualified majority needed, because it did not want to create a precedent for future voting procedures. Mobilizing these arguments, the deputies of SY.RIZ.A. raised an objection of unconstitutionality before the Parliament, which was rejected by a raising vote, according to article 100 paragraph 2 of the Standing Orders of Parliament.
Finally, the deputies of DIM.AR. emphasized the fact that the majority required was the absolute majority of the total number of deputies (151/300), according to paragraph 3 of article 28 of the Constitution. According to this paragraph, “Greece shall freely proceed by law passed by an absolute majority of the total number of Members of Parliament to limit the exercise of national sovereignty, insofar as this is dictated by an important national interest, does not infringe upon the rights of man and the foundations of democratic government and is effected on the basis of the principles of equality and under the condition of reciprocity.” The deputies of DIM.AR. alleged that paragraph 1 of article 28 of the Constitution, invoked by the government, was only concerning the place of international treaties in relation to domestic law and did not require a specific procedure for the ratification of European treaties, which have been always voted according to the third paragraph of this article. Indeed, according to them, the European Union is not an international organization but a union which they would like to be federal.
The deputies of the governing parties (PA.SO.K. and N.D.) argued, however, that the Treaty amendment, the Fiscal Compact and the ESM do not expand the competences of the European Union. To support their argument they invoked the simplified procedure of Treaty revision followed. In addition, the deputies of N.D. argued that European Union is not an international organization, according to the terms of article 28 paragraph 2 of the Greek Constitution, but a sui generis state organization.
The Greek constitutional doctrine has been divided on the subject. Most scholars, however, before the Eurozone crisis, considered that for the ratification of European Treaties and their amendments in general (and not with the simplified procedure followed), the Constitution requires a combined application of the procedural conditions of paragraph 2 and the substantial conditions of paragraph 3. Nevertheless, they emphasized that “the solution will not become definitive, until the broad until now parliamentary majority for the support of the European course of the country breaks.”
What political/legal difficulties did Greece encounter during the ratification of the ESM Treaty?
Despite the virulent criticisms that the ESM Treaty provoked from the part of the opposition, there were no major difficulties during its ratification, because of the broad parliamentary majority that supported the Government at the time. The legal statute ratifying the Treaty, as well as the amendment of article 136 TFEU and the Fiscal Compact, was debated and voted in one day, on the 28th of March 2012, with a majority of 194 deputies out of the 253 present voting in favor (the total of deputies is 300). The deputies of PA.SO.K. and N.D., the two parties of the government coalition at the time, voted in favor. The members of K.K.E., SY.RIZ.A., DIM.AR., LA.O.S., and DI.SY. voted against. It is interesting to note that LA.O.S. had participated in the Government at the time of the decision of 9 December 2011 for the (the political decision leading to the 136 TFEU amendment and the Fiscal Compact).
According to the deputies of PA.SO.K. and N.D., the institutionalization of the ESM is an extremely positive development for Greece, even though the conditionality of the application of the ESM Treaty is very strict. In the parliamentary debate of 28 March 2013, the deputies supporting the Government defended that there is a need for economic stability in Europe. Moreover, claiming that Greece will be autonomous only if it does not need to borrow money, they maintained that there is no other way but to ratify the treaty. Finally, they admitted that Europe is oriented to neoliberal policies and they expressed hopes that, in case the socialist Hollande would win the French Presidential elections of May 2012, together with other politicians, they would work in order to change this. They emphasized the need for growth in the EU and especially in countries struck by the financial crisis and they criticized the one-sided character of the treaty ratified, focused only on competitiveness.
In general, the ESM Treaty has been criticized more because of the conditionality that it sets, than for the creation of the ESM itself. The Government has been also accused by the opposed parties of hiding the conventions ratified from the Greek people, through the mobilization of opaque procedures. A deputy of the majority responded that “[they] are not acting in absentia of the Greek people because, by voting these treaties, we are supporting the basic choice of the Greek people, which is that the country remains in the Eurozone.”
The Communist Party (K.K.E.) claimed during the parliamentary debate of 28 March 2012 that the treaties under ratification showed the real face of the EU, which is an imperialist organization, against labor and social rights. In response to other parties’ claims on the unconstitutionality of the parliamentary procedure, they defended that the matter is not procedural and that inside the EU there is no possibility of democracy. They emphasized that the treaties ratified are limiting national sovereignty for the benefit of an imperialist organization and that there is no possibility of renegotiation of the Euro-crisis measures; instead, there is a need to exit the Eurozone and the EU, because the crisis is a crisis of capitalism. Concerning the ESM in particular, they stressed that this mechanism is not enough and that it is full of incoherences. They claimed that, at the end, the ESM Treaty, because of the asymmetry in the EU, benefits strong Germany and serves the capital against the working class. They characterized the ESM as a mechanism of controlled bankruptcy, which will bring about new memoranda and anti-popular measures, in the effort to protect creditors and the banking system at the European level.
During the same parliamentary debate, the deputies of LA.O.S criticized the time-consuming action of the EU, and expressed their hope that the socialist François Hollande would renegotiate the treaties under ratification, in order for them to contain growth provisions. Concerning the ESM in particular, they emphasized the incoherence of the treaty because of the need for countries with financial problems to participate in the saving of their own economy. They stressed that it would be difficult for the Greek government to find the money that it has to contribute to the ESM. Moreover, they claimed that the ESM Treaty raises sovereignty problems, among others because of the governance rules of article 4 of the Treaty, and provokes an “abdication of the Ministry of Economics”, in the profit of Germany.
According to SY.RIZ.A., the ESM Treaty, together with the Fiscal Compact, demonstrate the commitment of the Greek Government to the neoliberal policy of Germany, which leads inevitably to economic decline. The ESM is a mechanism of controlled default, under conditions which benefit only the creditors and Germany. Indeed, an eventual uncontrolled default would have an immense cost for the European North. Furthermore, the deputies of SY.RIZ.A., invoking also press publications in internationally well-known journals, observed that the capital provided for the ESM is not enough in order to face the debt crisis of Eurozone Member States. They emphasized the need for taxation of financial transactions, and for a mechanism of financial redistribution between countries of the European North and South. Moreover, they stressed the fact that the ESM Treaty involves the IMF as an institutional counterpart of EU integration. According to them, the ESM Treaty undermines the equality between Member States, because the participation of each Member State in the decision-making procedure of the mechanism depends on the number of stakes it holds. Finally they highlighted that the ESM constitutes an admission of the failure of the monetary union and a turn to a permanent search of competitiveness, through austerity.
The deputies of DIM.AR. held a rather moderate position, accepting the ESM, but not the conditionality which complements it. They emphasized the need for a change of policy in the EU and the need for a political and social union.
Is there a (constitutional) court judgment on the ESM Treaty?
No, there is no court judgment on the ESM Treaty. Indeed, in Greece there is no general possibility to directly attack legal statutes before the court. Instead, judicial review of the legislator is diffused among all jurisdictions of the civil and administrative order, and is finally concentrated in the Supreme Administrative and Judiciary Courts (Council of State – “Symvoulio tis Epikrateias” and Areios Pagos respectively). Each justiciable possessing a legitimate interest, in the occasion of a litigation before a judge, can raise an objection of unconstitutionality of a legal statute applied in the case, both in case this statute is applied directly, and in case it is the legal basis of another act. According to article 93 paragraph 4 of the Constitution, “The courts shall be bound not to apply a statute whose content is contrary to the Constitution.” Courts apply the same constitutional basis, in combination with article 28 paragraph 1, in order to monitor the compatibility of ordinary law with international conventions. Indeed, article 28 paragraph 1 declares: “The generally recognised rules of international law, as well as international conventions as of the time they are sanctioned by statute and become operative according to their respective conditions, shall be an integral part of domestic Greek law and shall prevail over any contrary provision of the law. The rules of international law and of international conventions shall be applicable to aliens only under the condition of reciprocity.” The result of unconstitutionality/uncoventionality is the non-application of the statute in the concrete case before the judge. Courts in general refuse to examine the respect of the rules of parliamentary procedure, which is considered interna corporis of the legislator. In any case, given that the TFEU amendment was approved in 2012 and given the time-consuming character of Greek judicial procedures, there is no court judgment on the ESM Treaty.
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?
Parliament has a marginal role in the payment of the installments of paid-in capital required by the ESM Treaty. This payment, prefigured to 450.672.000 euros per year in five installments, is included in a chapter of the national budget, which has not at all been discussed during the parliamentary debates for the approval of the budget. Thus, with the approval of the national budget, Parliament has habilitated the Government to take the necessary measures in order to assure the payment of this capital. That is because the application of the ESM Treaty is rather seen from the point of view of the beneficiary than that of a creditor to the ESM. The financial contribution of the country to the capital of the ESM has only been underlined during the parliamentary debates for the ratification of the ESM Treaty. In these debates, deputies of LA.O.S. objected that it would be difficult for the Government to provide the resources needed and that this would lead to new austerity measures against the Greek people.
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.
Parliament has a marginal role in the application of the ESM Treaty, which is a competency of the Government. Indeed, the application of the ESM Treaty is rather seen from the point of view of the beneficiary than that of a creditor to the ESM. However, during the parliamentary debates, parliamentary monitoring is exercised to the position of the Government in the negotiations for financial assistance to third countries and the disbursement of tranches. In general, there is not much transparency concerning the position of the Minister of Finance in the Eurogroup and the negotiations on the application of the ESM Treaty. Nevertheless, after the demand of the President of the Special Permanent Commission of European Affairs together with the Permanent Commission of Economic Affairs of the Parliament, a procedure of information of the Commission by the Minister of Finance concerning Eurogroup meetings has been institutionalized, albeit informally.
What political/legal difficulties did Greece encounter in the application of the ESM Treaty?
As far as the application of the ESM Treaty is concerned, Spain and Cyprus are perceived by the press and the political world as suffering from the same problems as Greece, as cases that demonstrate the generality and the systemic nature of the Euro-crisis problem. The financial assistance to these countries is perceived and discussed more in a comparative perspective to the Greek case. Thus, the examples of Spain and Cyprus are used by all political parties in order to show errors in the financial assistance programs for Greece, the weakness of the negotiating capacities of Government officials or, on the contrary, in order to demonstrate the success of the negotiations effectuated by the Greek Government.
Concerning the financial assistance to Spain, it is important to note that a part of the negotiations coincided with the transitional period between the two Greek elections of 2012. The discussions in Parliament show that the Greek Government was not perceived as participating and having a say in the discussions at the European level. Even when European decisions have been criticized, it is Europe itself and rarely the position of the Greek government that is considered. After the elections of the 17th of June, all political parties expressed their hopes for the renegotiation of the Greek debt in order to obtain a solution similar to the one that was to be adopted for Spain, and thus, a transfer of part of the Greek debt (corresponding to 25% GDP) to the European financial support mechanism. Deputies from PA.SO.K. and DIM.AR. defended that the Greek case is similar to the Spanish one, and that this solution would be a result of an equal treatment of Eurozone Member States. The Communist Party (K.K.E.), however, objected that the buying of state bonds by the ESM would be combined with memoranda and austerity measures. In general, at the beginning, the deputies of SY.RIZ.A. and AN.EL. were criticizing the Government for not negotiating a similar solution for Greece as the Spanish did. N.D. responded to the criticisms that this solution was conditioned by onerous measures, notably the control of Spanish banks by the EFSF. After the adoption of the final solution for Spain, SY.RIZ.A., lamenting the lack of political union in the EU, criticized the fact that, at the end, it was the Spanish people that would be held responsible for the debts of banks, through the imposition of austerity measures.
Concerning the case of Cyprus, the matter was a more sensible one because of the strong national, historic and cultural bonds between Greece and Cyprus. Almost all political leaders criticized the solution adopted with the first decision of the Eurogroup on the 15th of March. During the debates on the 19th of March 2013, deputies from all parties characterized the rejection of the Eurogroup decision by the Cypriot Parliament courageous and expressed their solidarity to the Cypriot people. More precisely, deputies from PA.SO.K. (participates in the Government) characterized the Eurogroup decision as a “crime”, and said that neoliberal policies in Europe are exclusively based on political decisions, emphasizing the need for change of orientation for Europe. They defended that the Greek Parliament should respect every decision of the Cypriot Parliament. Finally, they said that the Eurogroup decision was a wrong decision, which put Euro and Europe into danger, and which provoked division inside the Eurozone and has been criticized by the press. However, they maintained that the Greek government could not but accept this decision, which was already approved in the Eurogroup of the 15th of March, stressing out the need for more information on the position of the Government during the formation of the decision. DIM.AR. (participates in the Government) also condemned the decision of the first Eurogroup, which it characterized a “historical mistake” that expresses the neoliberal forces prevailing in Europe.
N.D. and the Government tried to justify their position by saying that the agreement on the taxation of bank deposits was a sovereign political decision of the President of the Cypriot Republic together with the IMF, the ECB, the Commission and the Eurogroup partners. Indeed, they explained that in the Eurogroup a concrete decision is presented, on which the state representatives have to express themselves. Given the European correlation of powers, Greece could not oppose to the Eurogroup decisions by itself. They defended that, by agreeing to this decision, they showed their support and solidarity to Cyprus, and they maintained a responsible position. They held that the Greek Government could not intervene in the internal matters of another state. Also, they emphasized that, with the Eurogroup decision for Cyprus, Greece is protected from eventual consequences of the Cypriot crisis, through the transfer of the branches of the Cypriot banks operating in Greece to a Greek bank. Even though they admitted that this decision is a step back from the banking union and a turnover of the previous flexibilization of the position of the ECB, they pointed out that Cyprus is a particular case, because of its huge and problematic banking sector. Finally, the Minister of Finance imputed the adoption of this onerous solution to the inexistence of a banking union between the Member States of the Eurozone.
However, the deputies of the opposition exercised virulent criticism to the position of the Government during the negotiations and they demanded further explanations. They emphasized that the Greek Minister of Finance participated to the unanimous Eurogroup decision, showed no solidarity to the Cypriot people, and supported the disastrous decision on the “haircut” of bank deposits. More precisely, deputies from SY.RIZ.A., using the term “colonization”, criticized the role of the Eurozone and of Germany, who only promote the interests of bankers. They stressed the incoherence of the Eurogroup decision, causing leak of capitals and instability to the profit of banks owned or controlled by German banks, with the foundations and the justification of the existence of the monetary union itself. Moreover, SY.RIZ.A. representatives demanded the resignation of the Government. They emphasized that the “no” of the Cypriot Parliament is a proof that there is an alternative to austerity and economic recession as a way to face the crisis, that negotiation is possible. They added that Greece needs to support the European South and, as long as it does not, it undermines its own economy because of the insecurity provoked. Finally, they pointed out the consequences that the economic crisis in Cyprus may have at the level of the exploitation of the natural resources of the island, which are close to the ones belonging to Greece.
The rest of the opposition parties also criticized the Government. On the one hand, the deputies of AN.EL. held a similar position to SY.RIZ.A., saying that the Eurogroup decision destroys the confidence in the EU, that it is a crime, and that it violated the right to privacy and the Charter of Fundamental Rights. They emphasized the political responsibility of the Government because of its participation to such an illegal decision. Further, they demanded either the resignation of the Minister of Finance, or the resignation of the whole Government that supported the decision for Cyprus. On the other hand, the deputies K.K.E. defended that the first Eurogroup decision on Cyprus is a demystification of the role of Europe and of capitalism as a whole, as it shows the character of EU and the policies it promotes.
The second Eurogroup decision on Cyprus on the 25th of March 2013 also provoked intense reactions by the political parties. The President of the Republic went as far as to characterize this decision as “intolerable”, because it constituted a discrimination against Cyprus. The opposition talked about a “German hegemony”. SY.RIZ.A. criticized the Greek Government for not supporting the decision of the Cypriot Parliament. They accused the Government of participating in the “attacks” to Cyprus for borrowing from a non EU state (Russia), and in the “blackmailing” by the ECB, the IMF and the Commission. Moreover, they emphasized the geopolitical matters at stake. They said that the second Eurogroup decision undermines the European Union and creates problems to all Member States, including Germany. The deputies of AN.EL. defended that the new disastrous decision of the Eurogroup shows that European partners do not respect the European values of democracy, solidarity, and human rights. Invoking press publications, they emphasized that this decision undermined the confidence of deposit holders in the whole Europe and mined the image of Germany. They added that it was absurd that the EU morally condemned a model of economic growth of a Member State, and they imputed this model to the incidents between Cyprus and Turkey, and thus the division of the island, which did not permit any other economic growth. Finally, they accused the Greek Government for not participating in a “plan B” for Cyprus, even though the Cypriot crisis is largely caused by the Greek one. The deputies of K.K.E. criticized the decision for Cyprus, and they defended that no negotiation that would be beneficial for the people is possible inside the neoliberal European Union. They also expressed fears about eventual evolutions concerning the problem with Turkey and the exploitation of natural resources of the island.
The Government parties, even though they recognized that the Eurogroup decision was very onerous for Cyprus, emphasized the need for Cyprus to remain Member of the Eurozone. PA.SO.K. and DIM.AR. however criticized the lack of political union in the EU and expressed hopes for a reorientation of European policies to this objective. Finally, the Government parties used the disastrous consequences of the Cypriot “no” to the first Eurogroup decision as a proof of the negotiation power of the Eurozone partners.
Greece was particularly concerned by the decision on the bailout of Cyprus because of the agreement between Cyprus and Greece on the Greek branches of Cypriot banks. “In order to protect the stability of the Greek and the Cypriot banking sector”, the “troika” set as a condition the sale of these branches to a Greek bank in order to approve the financial support programme for Cyprus. The Greek parties of the opposition doubted the promotion of the public interest and of the interests of Cyprus by this decision, they accused the Government of serving the interests of Pireus bank, which is the buyer, and demanded further information on the subject. The Minister of Finance alleged that it was the only solution. The Government claimed that it acted with the exclusive goal of the guarantee of deposits, the maintaining of working posts and the stability of the Greek financial sector.  For the transfer of the branches of the Cypriot banks to Pireus bank, an amendment of a legal statute was inserted at first on the 11th of April 2013. However, because of its irrelevance to the content of the bill in which it was added, and after the objections of many deputies provoked by the lack of information from the part of the Government, the latter retired the amendment and inserted it into another –still irrelevant– bill on the 17th of April 2013.
The statute regulates ad hoc the transfer of the Cypriot banks, providing that the increasing of the Greek bank’s property is not included in the calculation of the capital needs of the bank, the 10% of which must be covered by private parties’ contribution for the recapitalization of the bank. Also, it excludes the transaction from taxes. During the parliamentary debates, SY.RIZ.A. and AN.EL. alleged that the transfer under consideration was increasing the property of the Greek buyer bank. Thus, it had to be done according to the already existing legal framework, with transparency concerning the value of the branches and following the rules concerning banks’ capital and recapitalization. Also, it should be submitted to taxes. The Government responded that a special rule was necessary because no framework for the improvement of foreign banks existed at the time. They claimed that the existing legal framework was respected in principle and that the benefits accorded to the Greek bank were a result of the agreement with this bank. Besides, these benefits were justified by the fact that no other buyer was found for the Cypriot branches, which needed to be saved in order to assure deposits of Greek people and of social security funds. However, the opposition did not finally vote the amendment, fearing that the privileged treatment of the Greek private bank would become a general practice in the future.
Have there been any relevant changes in national legislation in order to implement or to comply with requirements set by the ESM-Treaty?
No, there are no changes in national legislation for the implementation of the ESM Treaty in particular. Relevant legislation has been adopted for the implementation of measures concerning the financial assistance to Greece and the EFSF.
What other information is relevant with regard to Greece and the ESM Treaty?
What is interesting is precisely the lack of information concerning the role of Parliament in the application of the ESM Treaty. After its ratification, its application seems to be an exclusive competency of the executive branches, whose exercise is not transparent and is rarely debated in Parliament.