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.

What political/legal difficulties
did Sweden encounter in the negotiation of the amendment of article 136 TFEU?

Sweden did not encounter any political or legal difficulties in the negotiation of the amendment of Article 136 TFEU.

The issue was not debated in the Parliament until the Government had presented its draft bill in February 2012.

How has the 136 TFEU Treaty amendment been approved in Sweden and on what legal basis/argumentation?

The rules on EU Treaty ratification are found in the Swedish Constitution, more precisely, in the ‘Instrument of Government’ (Regeringsformen). It is the Government that concludes international agreements with other states or with international organisations (Chapter 10, Article 1, Regeringsformen). If an agreement presupposes an amendment, abrogation or enactment of a legal Act or of it otherwise concerns a matter which it is for the Parliament to determine, the Government may only conclude it after the approval of the Parliament (Riksdag). The Riksdag shall decide with simple majority (Chapter 4, Article 7). If, however, a special procedure has been prescribed for the required Riksdag decision, the same procedure shall apply when approving the agreement (Chapter 10, Article 3). For example, if an international agreement presupposes a constitutional amendment, the Riksdag has to apply the special procedure for constitutional amendments (the procedure for constitutional amendments is found in Chapter 8, Article 14). Another such special procedure is found in the rules on the transfer of competence to the EU (Chapter 10, Article 6). These rules stipulate that the Riksdag may transfer decision-making authority to the EU that does not affect the basic principles by which Sweden is governed. The Riksdag may approve such transfer of authority, provided that at least three quarters of the members voting and more than half of the members of the Riksdag vote in favour of the decision. The Riksdag’s decision may also be taken in accordance with the procedure prescribed for the enactment of constitutional amendments.

Before submitting a proposal, the issue was analysed and examined by officials from the Swedish Prime Minister’s Office. A draft proposal including an explanatory memo was published (the ‘inquiry stage’),[1] and then referred to different governmental authorities, organisations, regional municipalities, and other interest parties, for consultation (the ‘referral process’). The Swedish Government then adopted a proposal, which it submitted to the Swedish Parliament (the Riksdag) on the 23rd of February 2012,[2] suggesting that the Riksdag would approve the European Council Decision (2011/199/EU). The Swedish Government pointed out in its proposal that ‘the amendment is editorial in character and it does not involve any transfer of competence to the EU’.

Before the Riksdag could take a decision on the Government’s Proposal, it had to be prepared by a Parliamentary committee. In the Riksdag, there are 15 permanent committees which consist of 17 members of the Parliament each. The committees’ opinions are not legally binding, but the Riksdag often follows them as the distribution of seats in the Committees reflects the distribution of seats in the Riksdag as a whole. The Proposal was sent to the Parliamentary Committee on Finance, which is responsible for any expenditure to the EU.[3] The Committee on the Constitution and the Committee on Foreign Affairs also gave their Opinions on the Act.

The Committee on the Constitution suggested which legislative procedure that should apply when the Riksdag takes its decision on the Treaty amendment.[4] The Committee noted that Article 136 TFEU is placed in the third part of the TFEU and that the implication of the Treaty amendment is that Member States whose currency is the Euro may establish a stability mechanism. It further noted that the amendment only intends to clarify and to create a legal framework for the implementation of this mechanism. The Committee emphasised that the amendment does not in itself establish a stability mechanism, but that an intergovernmental agreement is required for the establishment. It also emphasised that the Treaty amendment does not increase the Union’s competences, and further, that the Union itself cannot establish a stability mechanism with the amended Article 136 TFEU as a legal basis. The Committee concluded that the Riksdag’s approval of the European Council decision would not imply a transfer of competence to the EU. An approval would only require an amendment of the Swedish Accession Act,[5] and such an amendment were to be decided by the Riksdag only by simple majority (Chapter 4, Article 7). The Riksdag was to take the decision by simple majority since the Treaty amendment does not imply any transfer of competence to the Union. The Committee concluded that there were no constitutional impediments to adopt the Amendment Act. The Committee also noted that the ESM Treaty was concluded between EU Member States whose currency is the euro, and that Sweden could only become a member of the ESM if Sweden introduces the euro. It pointed out that if Sweden were to join, the question of membership of the ESM should be subject to parliamentary review.

In this context, it should also be pointed out that Sweden does not have a separate constitutional court; rather, any court can review the lawfulness of a legal act. The Swedish system of judicial review is, however, rather weak. For example, the system is such that a court cannot declare a legal Act void, only non-applicable. It should be pointed out that Sweden has a strong system of judicial ‘preview’; before the government submits a proposal to the Riksdag, it usually submits a draft proposal to a Council on Legislation (Lagrådet), which controls that the proposal does not collide or breaches constitutional provisions or other legislation.[6] Lagrådet cannot be considered being a constitutional court; rather, it is an organ that provides legal input into the legislative procedure. It can only give opinions on draft proposals. The government is only obliged to submit a draft proposal to Lagrådet under certain circumstances enlisted under Chapter 8, Article 21 of the Instrument of Government. The Amendment Act and the Riksdag’s approval of the 136 TFEU Treaty amendment was clearly not such a case. The government did not consider it necessary to submit a draft proposal to Lagrådet. There have been no objections against that decision.

The Riksdag adopted the Amendment Act (2012:408) on the 30th of May 2012,[7] following a debate in the Riksdag on the same day.[8] The Amendment Act was approved with 295 for and 19 against (35 absent). Only the Left Socialist Party (the former Communist Party) voted against the Amendment Act.

Ratification difficulties           
What political/legal difficulties
did Sweden encounter during the ratification of the 136 TFEU Treaty amendment?

The ratification of the 136 TFEU amendment has not given rise to any political or legal difficulties.

A number of proposals from individual members of the Parliament were submitted to the Riksdag (‘motions’).[9] A proposal from MPs from the Left Socialist Party (Vänsterpartiet),[10] dismissed the government’s proposal on the ground that the ESM Treaty states that the private sector shall follow IMF practice; that funding may be given to recapitalisation to financial institutions; that the funding shall be provided under too strict conditions; and that the ESM and its organs shall be given legal immunity.[11] The MPs argued in alternative that the Riksdag should only approve the Government’s proposal under the condition that the Government does not ratify the Treaty amendment until a legally binding social protocol has been introduced on an EU level, and that legal guarantees are introduced in the EU Treaties to protect the Swedish system of social bargaining (see the Laval Case). The Committee on Foreign Affairs replied that the Lisbon Treaty in itself helps to improve working conditions. It pointed out that this was also the case for the Charter of Fundamental Rights which was made legally binding by the Lisbon Treaty. The Committee concluded that the Treaty amendment should not be made conditional upon the introduction of a legally binding protocol on EU level.

In another motion, also from the Left Party, it was argued that Sweden should negotiate a formal derogation from the euro cooperation (like Denmark and the UK) as a condition to ratify the Treaty amendment.[12] The Committee on Foreign Affairs pointed out that after the Swedish referendum on the euro in 2003, the Committee had declared that a formal derogation was not a necessity. The Committee explained that the current Treaty amendment does not change this, and that there was no reason in this context to raise the issue of a formal derogation from the Swedish euro participation. In a proposal from MPs from the far-right party the ‘Swedish Democrats’ (Sverigedemokraterna),[13] it was argued that that Sweden should refrain from any commitments such as ESM because there was a risk that Sweden would be ‘drawn deeper into the euro cooperation’. They noted that there are provisions in the ESM Treaty that provides that the decision shall be taken with qualified majority.

In a motion by an MP from the Green Party, it was argued that democratic principles should be respected when implementing measures to address the debt crisis in Europe, that there should be a proclamation on transparency, and that the democratic control of the ESM should be strengthened.[14]   As a reply to this criticism, the Committee of the Constitution emphasised that the approval of the Treaty amendment does not prevent the government from promoting the respect for democratic principles when crisis legislation is implemented in the framework of the EU cooperation.

The Committee on Foreign Affairs emphasised the importance of the establishment of the ESM. It underlined the significance of a transparent Europe, and it held that the principle of transparency should be a fundamental principle in the European cooperation on financial stability and long-term competitiveness.

The Committee on Finance decided to recommend the Parliament to adopt the Amendment Act.[15] It explained that the Article 136 amendment opens up for the establishment of the ESM, and that this was a way of providing the euro states with the possibility to build up emergency measures necessary to protect the currency and the economy in times of economic crises. It further explained that the amendment should be seen in the light of the sovereign debt crisis in Europe. The Committee believed it was important that Sweden participates in providing the possibility to build up the stability mechanism. The Committee dismissed the proposals by individual MPs on a declaration on the governance of the ESM, on the future of the EFSM, and a Swedish derogation from the EMU.

The debate in the Chamber was largely the same as the ones in the Committees.

Case law        

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

There are no cases on the 136 TFEU Treaty amendment.

What other information is relevant with regard to Sweden and the 136 TFEU Treaty amendment?

No other relevant information.

[1] Departementsserie 2011:25, http://www.riksdagen.se/sv/DokumentLagar/Utredningar/Departementsserien/_GZB425/?text=true#attachments

[2] Regeringens proposition 2011/12:66 – Godkännande av Europeiska rådets beslut om ändring av artikel 136 i EUFfördragetstabilitetsmekanism för euroländer. http://www.riksdagen.se/sv/DokumentLagar/Forslag/Propositionerochskrivelser/GodkannandeavEuropeiskarade_GZ0366/?html=true

[3] According to the Swedish Parliament’s website, the Committee on Finance also prepares ‘matters concerning general guidelines for financial policy, adoption of the central government budget and matters concerning the activities of the Riksbank. It also prepares matters concerning expenditure limits for expenditure areas and estimates of State revenue’. http://www.riksdagen.se/en/Committees/The-15-parliamentary-committees/

[4] Konstitutionsutskottets yttrande, 2011/12:KU7y, http://www.riksdagen.se/sv/Dokument-Lagar/Utskottens-dokument/Yttranden/Godkannande-av-Europeiska-rade_GZ05KU7y/

[5] The ‘Accession Act’ (1994:1500), which has the status of ordinary legislation, regulates Sweden’s accession to the EU. It enlists the EU Treaties that are valid in Sweden since 1995. The Act states, inter alia, that the Swedish Accession Treaty and the EU’s founding treaties etc are legally valid in Sweden and that the EU’s decisions are applicable to the extent and to the effect that follows from the enumerated Treaties. In order to become part of Swedish legislation and to become legally applicable in Sweden, the European Council’s decision 2011/199/EU had to be included in the list enumerating EU Treaties. This had to be done by an amendment of the Accession Act. It should also be noted that Sweden is a dualist state, which means that international agreements do not automatically become part of the national legal system; in order to have legal effect, they have to be incorporated in the Swedish legal system. This is achieved by introduction of a declaration in Swedish legislation that the international agreement shall have legal effect in Sweden. The provisions in the international agreement then become directly applicable. Another method used is ‘transformation’. The international agreement or parts of it are then replicated or rewritten into Swedish legal provisions.

[6] Lagrådet consists of judges from the Supreme Court and the Supreme Administrative Court.

[7] Riksdagsskrivelse, 2011/12:236, Regeringen, Statsrådsberedningen.

[8] Riksdagens protokoll 2011/12:120, the 30st of May,  http://www.riksdagen.se/sv/Dokument-Lagar/Kammaren/Protokoll/_GZ09120/

[9] See footnote 12.

[10] Motion 2011/12:Fi9, Jonas Sjöstedt and others (Vänsterpartiet).

[11] An MP from the Green Party (Miljöpartiet) also submitted criticism on the ESM’s legal immunity, see footnote 18.

[12] Kommittémotion 2011/12:Fi210 by Jonas Sjöstedt and others (V).

[13] Motion 2011/12:Fi10, Erik Almqvist and Johnny Skalin (SD).

[14] Motion 2011/12:Fi11 Per Bolund (MP).The Green Party is an EU sceptical party; until 2008, its party programme demanded a Swedish withdrawal from the EU.

[15] Finansutskottets betänkande, 2011/12:FiU40, http://www.riksdagen.se/sv/Dokument-Lagar/Utskottens-dokument/Betankanden/201112Godkannande-av-Europeis_GZ01FiU40/