Latvia

V - 136(3) TFEU

At the 16/17 December 2010 European Council a political decision was taken to amend the Treaties through the simplified revision procedure of article 48(6) TFEU. On March 25, 2011 the European Council adopted the legal decision to amend article 136 TFEU by adding a new third paragraph: “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. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”        
The process of approval of this decision by the member states in accordance with their respective constitutional requirements as prescribed by article 48(6) has been completed and the amendment has entered into force on 1 May 2013.

Negotiation
V.1
What political/legal difficulties
did Latvia encounter in the negotiation of the amendment of article 136 TFEU?

There were no political or legal difficulties during the negotiations on the amendment of Art 136 TFEU.

On 10 December 2010 in the sitting of the Parliamentary Committee for European Affairs (PCEA) the Minister for Foreign Affairs (G.V. Kristovskis) presented the Government’s position.[1]

In the position Latvia indicated that it supports the amendments, which were regarded as necessary for creating a system for overcoming the crisis. Latvia agreed that the mechanism based on these Treaty amendments would be formed by the Eurozone countries by concluding intergovernmental agreements but the non-euro countries will be able to decide on joining the mechanism, if they wish to do so. As essential was seen the participation of non-euro states in the discussions concerning the establishment and financing of the mechanism,[2] probably, in light of the fact that Latvia was planning to join the Eurozone in 2014 which in the meantime has happened. The position was approved.[3]

As well from the meeting of 23 March 2011 it is clear that Latvia supported the coming into force of the Art 136 TFEU amendment on 1 January 2013.[4]

Approval
V.2
How has the 136 TFEU Treaty amendment been approved in Latvia and on what legal basis/argumentation?

There are two ratification procedures depending on whether or not an international treaty delegates part of national competences to international institutions. According to Art 68 of the Constitution:

“All international agreements, which settle matters that may be decided by the legislative process, shall require ratification by the Saeima.

Upon entering into international agreements, Latvia, with the purpose of strengthening democracy, may delegate a part of its State institution competencies to international institutions. The Saeima may ratify international agreements in which a part of State institution competencies are delegated to international institutions in sittings in which at least two-thirds of the members of the Saeima participate, and a two-thirds majority vote of the members present is necessary for ratification.

Membership of Latvia in the European Union shall be decided by a national referendum, which is proposed by the Saeima.

Substantial changes in the terms regarding the membership of Latvia in the European Union shall be decided by a national referendum if such referendum is requested by at least one-half of the members of the Saeima.”[5]

In the case of the Art 136 TFEU amendment there were some discussions concerning the appropriate procedure for approval. The Parliament consulted its legal services and the Ministry of Foreign Affairs and in the end agreed that the amendments do not expand the scope of EU competences and no new competences are being delegated to the European institutions. Hence it was decided that the draft law on “The Decision of the European Council amending Article 136 of the Treaty on the Functioning of the European Union dealing with stabilization mechanism for countries whose currency is euro” can be adopted by using a simple ratification procedure (with a vote of simple majority).[6] Thus, the draft law was adopted in two readings and by simple majority. Two instead of three readings is an exception provided for inter alia international treaties according to the Art 114(2)(3) of The Rules of Procedure of the Saeima.[7]

In total there are 100 places in the Latvian Parliament. In the first reading there were 79 MPs present; 78 MPs out of those voted in favour and one abstained. Therefore the draft law was convincingly approved in the first reading.[8] In the second reading 79 MPs out of 79 who were present voted in favour and no one abstained or voted against, therefore the draft law was unanimously adopted in the second reading by all the MPs who were present at the reading.[9]

The President announced the law on 9 May 2012 and the ratification was notified to the EU Council on 24 May 2012.

Ratification difficulties    
V.3
What political/legal difficulties
did Latvia encounter during the ratification of the 136 TFEU Treaty amendment?

In general, no real difficulties were encountered during the ratification process of the 136 TFEU Treaty amendments. However, there were some debates in the Parliament.

Before the draft law ratifying amendment of Art 136 TFEU reached the Parliament there were some discussions about the necessity of a qualified majority in this case in accordance with Art 68 Constitution. At the time the coalition had only 56 (out of 100) votes in the Parliament and the Union of Greens and Farmers (ZZS) at the time was in the opposition. In January 2012 the Prime Minister expressed an opinion that there will likely be a need for a two-thirds majority concerning several questions connected with European financial stabilization.[10] As well the Speaker of the Parliament (Solvita Āboltiņa, coalition, Vienotība) stated that the discussions for ensuring a two-thirds majority will be carried out with the two biggest forces in the opposition – ZZS and SC in order to convince them that this is a question not for political quarrels but instead a question of „the future existance of Latvian state”.[11] ZZS, being in the opposition, used this opportunity and the unclear situation concerning the necessary amount of votes and proposed a deal where it will support the initiatives for strengthening the fiscal discipline only if it will get two minister places in the coalition.[12]

In response to the deal proposed by the ZZS the Government indicated that a broadening of the coalition is not on the agenda and in reaction the ZZS later revoked its demands.[13] However, on 29 February 2012 in order to gain Parliamentary support inter alia for the amendment of Art 136 TFEU the Prime Minister signed an agreement with ZZS where he undertook to get bigger direct payments to Latvian farmers starting from 2014 and no less cohesion funding than in the previous planning period.[14] In return, the ZZS promised to support the Fiscal Compact and associated changes in national laws (this includes as well the support for ratification of the amendment of article 136 TFEU), except for potential changes in the Constitution. The agreement provides that the Prime Minister in the discussions concerning the EU multiannual budget for 2014-2020 will “strongly insist” on ensuring that in the context of the Common Agricultural Policy Latvian farmers will get significantly greater support, reaching around 80% of the average level of payments in the EU while at the same time the funding for rural development will not be reduced.[15]

In the end when Art 136 TFEU amendment reached the Parliament, it was decided that in this particular case a two-thirds majority is not necessary (see Question V.II). Nevertheless, in fact, after all the discussions preceding the ratification, the amendment gained such a level of support.

After the ratification Prime Minister Valdis Dombrovskis expressed satisfaction that the “opposition puts the national interests of Latvia in higher regard than the borderlines between coalitionand opposition”.[16] He continued that “These [Fiscal Compact] Treaties are important instruments to ensure the stability of Latvia and the whole of Europe. The Latvian position in these questions will determine whether we will join the core [countries] leading European development.”[17]

During the ratification process when the draft law ratifying amendment of Art 136 TFEU was discussed in the Committee of Foreign Affairs in the Parliament the Minister of Foreign Affairs, Edgars Rinkevičs, stressed that even though the Treaty amendments providing for establishment of the ESM have to come into force on 1 July 2012, Latvia will have to join the ESM and start the payments only after joining the Eurozone in 2014.[18] It was planned that the Latvian payment would be around 144.29 million LVL during a five-year-period.[19]

In the Parliamentary session on 26 January 2012 V. Zatlers (previously the President of Latvia, at the time one of the leaders of the coalition political force Reform Party (RP)) emphasized that there is a need to build both an economically and politically stronger European Union (EU) internally in order to gain greater influence and competitiveness at the global level. Therefore, the Art 136 TFEU amendment and Fiscal Compact in Latvia are on top of the agenda. He stressed that there are no doubts that by strengthening the euro and the EU Latvia strengthens its own economy and, thus, in fact is protecting its own economic and national interests.[20]

The draft law ratifying Article 136 TFEU Treaty amendment was adopted in two readings. In the first reading on 8 March 2012 the Parliament voted for the draft law almost unanimously. The representative from the Foreign Affairs Committee (Ojārs Kalniņš, coalition, Vienotība) explained that with the help of these changes to the Lisbon Treaty a concrete mechanism will be created for fighting such economic problems as Greece and other Member States were facing at the moment:

“The payments to this new stabilization mechanism are similar to insurance. We do not know whether there will be an accident, however, for the sake of security we buy insurance in order to cover potential losses. Similarly, the Eurozone countries with the help of this new mechanism will secure themselves against liquidity problems in the future”.[21]

Only one MP (K. Engelis, Coalition, ZRP) participated in the debates during the final (second) reading and expressed an opinion that this vote will have a symbolic meaning and will have an impact on how the joining the Eurozone will be decided by the Parliament and whether a simple vote in the Parliament will be enough then as well. He stated that already by joining the EU Latvia has expressed its willingness and determination to introduce the euro and this vote can be seen as a vote for the euro. He insisted that unanimity would be very important because it would be a clear signal both to the society of Latvia and its partners in the EU that a strong euro belongs to the national interests of Latvia. He added that it will be easier for Latvia to survive potential crises in the future, if it will be part of the Eurozone.[22]

Case law  
V.4

Is
there a (constitutional) court judgment in Latvia on the 136 TFEU Treaty amendment?

No, there has not been such a judgment.

Miscellaneous
V.5
What other information is relevant with regard to Latvia and the 136 TFEU Treaty amendment?

Not applicable.          

[1] Annex XXV_Saeimas 10 Protokols 15 10_12_2010, p. 2.

[2] Ibid.

[3] Ibid.

[4] Annex XXVII_Saeimas 10 Protokols 26 23_03_2011,  p. 2.

[5]  Please see the English version of the Constituion of the Republic of Latvia. Available under: http://www.saeima.lv/en/legislation/constitution (last visited 23 June 2013).

[6] Minutes of the Parliament session, 8 March 2012 concerning „Par Eiropadomes lēmumu, ar ko Līguma par Eiropas Savienības darbību 136.pantu groza attiecībā uz stabilizācijas mehānismu valstīm, kuru naudas vienība ir euro”. Available under: http://titania.saeima.lv/LIVS11/saeimalivs11.nsf/0/66F8393F6A9274FFC22579C00031C183?OpenDocument (last visited 23 June 2013) and see as well Art 114The Rules of Procedure of the Saeima (http://likumi.lv/doc.php?id=57517).

[7] According to Art 114The Rules of Procedure of the Saeima A draft law shall be deemed adopted and shall become a law if it has been considered in three readings or, if it is recognized as urgent, it is a draft budget law or contains amendments to the state budget or it is a draft law on the ratification of international agreements, in two readings, and, if having been put to a vote in its entirety, it has received an absolute majority of votes of the Members present.

[8] Minutes of the Parliament session, 8 March 2012 concerning „Par Eiropadomes lēmumu, ar ko Līguma par Eiropas Savienības darbību 136.pantu groza attiecībā uz stabilizācijas mehānismu valstīm, kuru naudas vienība ir euro”. Available under: http://titania.saeima.lv/LIVS11/saeimalivs11.nsf/0/66F8393F6A9274FFC22579C00031C183?OpenDocument (last visited 23 June 2013).

[9] Minutes of the Parliament session, 19 April 2012 concerning „Par Eiropadomes lēmumu, ar ko Līguma par Eiropas Savienības darbību 136.pantu groza attiecībā uz stabilizācijas mehānismu valstīm, kuru naudas vienība ir euro”. Available under:http://titania.saeima.lv/LIVS11/saeimalivs11.nsf/0/8A632236D5F23615C22579EA0024C05D?OpenDocument (last visited 23 June 2013).

[10] Laikraksts: ZZS piedāvā “darījumu” valdības koalīcijai. Available under: http://www.ir.lv/2012/1/16/laikraksts-zzs-piedava-darijumu-valdibas-koalicijai (last visited 11 November 2013).

[11] Ibid.

[12] Ibid.

[13]  DELFI, Ārlietu komisija konceptuāli atbalsta Lisabonas līguma ‘finanšu stabilitātes’ grozījumus. 29 February 2012. Available under: http://www.delfi.lv/news/national/politics/arlietu-komisija-konceptuali-atbalsta-lisabonas-liguma-finansu-stabilitates-grozijumus.d?id=42170714 (last visited 23 June 2013).

[14] Brigmanis: Dombrovska vienošanās ar ZZS par ES budžetu nav izpildīta un notikusi piekāpšanās ES diktātam. Available under:  http://www.delfi.lv/news/national/politics/brigmanis-dombrovska-vienosanas-ar-zzs-par-es-budzetu-nav-izpildita-un-notikusi-piekapsanas-es-diktatam.d?id=43044272#ixzz2kKLiJb7f (last visited 11 Novermber 2013).

[15]  DELFI, ZZS premjeram nesola balsot par fiskālās disciplīnas stiprināšanas grozījumiem Satversmē. Available under: http://www.delfi.lv/news/national/politics/zzs-premjeram-nesola-balsot-par-fiskalas-disciplinas-stiprinasanas-grozijumiem-satversme.d?id=42170070 (last visited 23 June 2013); ZZS premjeram nesola balsot par fiskālās disciplīnas stiprināšanas grozījumiem Satversmē. Available under: http://www.delfi.lv/news/national/politics/zzs-premjeram-nesola-balsot-par-fiskalas-disciplinas-stiprinasanas-grozijumiem-satversme.d?id=42170070#ixzz2kKNV554v (last visited 11 November 2013). It is interesting to not that in February 2013 the ZZS declared that  the agreement has not been fulfilled by the Prime Minister and Latvia has yielded to the European dictatum. The situation concerning the direct payments to farmers has remained the same – until 2020 it has been planned that Latvia will achievereceive the payments which amount to 80% of the average payment levels in the EU (Brigmanis: Dombrovska vienošanās ar ZZS par ES budžetu nav izpildīta un notikusi piekāpšanās ES diktātam. Available under : http://www.delfi.lv/news/national/politics/brigmanis-dombrovska-vienosanas-ar-zzs-par-es-budzetu-nav-izpildita-un-notikusi-piekapsanas-es-diktatam.d?id=43044272#ixzz2kKQ72xSd (last visited 11 November 2013).

[16] DELFI, ZZS premjeram nesola balsot par fiskālās disciplīnas stiprināšanas grozījumiem Satversmē. Available under: http://www.delfi.lv/news/national/politics/zzs-premjeram-nesola-balsot-par-fiskalas-disciplinas-stiprinasanas-grozijumiem-satversme.d?id=42170070 (last visited 23 June 2013).

[17] Ibid.

[18]  DELFI, Ārlietu komisija konceptuāli atbalsta Lisabonas līguma ‘finanšu stabilitātes’ grozījumus. 29 February 2012. Available under: http://www.delfi.lv/news/national/politics/arlietu-komisija-konceptuali-atbalsta-lisabonas-liguma-finansu-stabilitates-grozijumus.d?id=42170714 (last visited 23 June 2013).

[19] Ibid.

[20] Minutes of the Parliament session, 26 January 2012. Available under: http://saeima.lv/lv/transcripts/view/104 (last visited 23 June 2013).

[21]  DELFI, Saeima konceptuāli atbalsta Lisabonas līguma ‘finanšu stabilitātes’ grozījumus. 8 March 2012. Available under: http://www.delfi.lv/news/national/politics/saeima-konceptuali-atbalsta-lisabonas-liguma-finansu-stabilitates-grozijumus.d?id=42190854 (last visited 23 June 2013).

[22] Minutes of the Parliament session, 8 March 2012 concerning „Par Eiropadomes lēmumu, ar ko Līguma par Eiropas Savienības darbību 136.pantu groza attiecībā uz stabilizācijas mehānismu valstīm, kuru naudas vienība ir euro”. Available under: http://titania.saeima.lv/LIVS11/saeimalivs11.nsf/0/66F8393F6A9274FFC22579C00031C183?OpenDocument (last visited 23 June 2013)