European Stability Mechanism
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The European Stability Mechanism (ESM) is a permanent rescue funding programme to succeed the temporary European Financial Stability Facility and European Financial Stabilisation Mechanism in the 17-member Eurozone. The ESM is due to be launched as soon as Member States representing 90% of the capital commitments have ratified it, which is expected in July 2012.
Following the European sovereign debt crisis that resulted in the bailout of EU states, there has been a drive to reform the functioning of the Eurozone in the event of a crisis. This led to the creation, amongst other things, of a bail-out mechanism: the European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM). These, together with the IMF, would bailout EU states in trouble. However, the EFSF and EFSM were intended only as a temporary measure (to expire in 2013), in part due to the lack of a legal basis in the EU treaties.
In order to resolve the issue, the German government felt a treaty amendment would be required. After the difficult ratification of the Treaty of Lisbon, many states and statesmen opposed reopening treaty amendment and the British government opposes changes affecting the United Kingdom. However, after winning the support of French President Nicolas Sarkozy Germany won support from the European Council in October 2010 for a new treaty. It would be a minimal amendment to strengthen sanctions and create a permanent bail-out mechanism. It would not fulfil the German demand to have the removal of voting rights as a sanction as that would require deeper treaty amendment. The treaty would be designed so there would be no need for referendums and for it to come into force in July 2012. It will run one year parallel to the temporary bail-out mechanism, which expires 2013. European Council President Herman Van Rompuy is to explore the changes through the simplified revision procedure.
Critics say the ESM resembles an enabling act, because it severely confines the economic sovereignty of its member states without parliamentary influence or control
read more: http://en.wikipedia.org/wiki/European_Stability_Mechanism
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