Date set for EU high court ruling on Irish ESM case

poeticseraphim

It is set for the 23rd of oct.


However the German constitutional court may not wait that long.

ast month the Irish Supreme Court refused a legal injunction sought by Mr Pringle, which enabled Dublin to press ahead and ratify the ESM treaty. However, the court asked the ECJ to provide legal guidance on whether the ESM is in breach of EU law.

“There is a principle within the EU that if an issue is before the ECJ that could affect everyone else then implementation should be held off until it is resolved, “Mr Pringle told the Financial Times. “If the ECJ agrees with me then the ESM is not compatible with EU treaties and cannot come into force.”

So they will decide whether it is compatible with EU law.

But the German constitutional court may rule ahead but they have been asked to wait.

http://ftalphaville.ft.com/blog/2012/08/14/1118011/esm-not-yet-of-this-world-dodges-another-curveball/

They apparantly see no reason to wait.

http://in.reuters.com/article/2012/08/14/eurozone-germany-court-idINL6E8JE2OA20120814
http://www.ft.com/intl/cms/s/0/fda2f444-e562-11e1-9a2f-00144feab49a.html#axzz23eqPr29p
This lawsuit is the first of its kind and it comes on top of complaints that the ESM is unconstitutional in Germany.


Sovreign states now hav to ask the EU if they violate themselves and the EU institutions are still so undemocratic.

Anyway this could all push the ESM fund back months and cause instability whilst we wait and the markets speculate.

Do you think there will be a legal issue?

There certainly seems to be concerns over German constitutional law. I must look deeper into it.

Anyway i thought it was interesting.

Scofflaw

Interesting, but a little confused perhaps:

Sovreign states now hav to ask the EU if they violate themselves and the EU institutions are still so undemocratic.

The issue is that by setting up the new ESM Treaty, the member states may be in breach of existing treaties they're signed up to - that is, the EU Treaties. The reason for applying to the CJEU is that the CJEU is the court tasked under the EU Treaties with determining breaches of those treaties.

The German Constitutional Court makes judgements on the German Constitution, the Irish Supreme Court makes judgements on the Irish Constitution, and the CJEU makes judgements on the EU's 'constitution', which is the Treaties.

If you think about it, you can hardly ask the courts of the member states to determine whether something conflicts with the Treaties - which court would get to do it? And which opinion do you take if different national courts came to different verdicts?

cordially,
Scofflaw

poeticseraphim

Yes It is a constitutional issue in Germany. Infact i think many constitutional issues have been raised in Germany.

As regards EU treaties ...well i actually think if national courts cannot or do not come to a similar ruling then the said treaty is flawed.

Each national court coming up with differing verdicts seems to suggest a problem with it ...should they not agree if a treaty is sound?
And should judges not come to the same opinion on the same law?
That is the basis of law...common understanding and agreement.

Each country would take the opinion of their own court perhaps?

I worry that there is not enough agreement or harmony that courts are not able to ascertain whether or not they are in conflict with their own laws.

Infact that was one of the key issues that led to the banking crisis regulation that was in conflict with itself and company banking lawyers and accountants unable to agree or unwilling to. And one central archetect supposedly there to create rules that clear it up but in fact are deeply flawed.

It is not like the US and the Supreme court..it is more like the EU high court in the middle of a web of confusion of totally different systems. Especially in regards to banking law where how it is carried out in practise may differ from place to place.

Part of the problem is no one can tell if banks broke national law or did EU law overide it?

It seems odd to me that a treaty could be created that the German court felt might have constitutional issues? Don't the EU have lawyers to forsee such issues an construct treaties to avoid them? It just seems incompetant for a Govt to agree to something that might be against there own constitution. Especially right now. When it creates such delays.

But thats the EU.

Scofflaw

poeticseraphim wrote: »

Yes It is a constitutional issue in Germany. Infact i think many constitutional issues have been raised in Germany.

As regards EU treaties ...well i actually think if national courts cannot or do not come to a similar ruling then the said treaty is flawed.

Each national court coming up with differing verdicts seems to suggest a problem with it ...should they not agree if a treaty is sound?
And should judges not come to the same opinion on the same law?
That is the basis of law...common understanding and agreement.

Basically, no, insofar as that really needs an answer.

poeticseraphim wrote: »

Each country would take the opinion of their own court perhaps?

So the German court could rule that the ESM was in breach of the EU treaties while the Irish court rules it isn't? Or vice-versa? How's that going to solve the situation? Is the ESM against the treaties or not?

poeticseraphim wrote: »

I worry that there is not enough agreement or harmony that courts are not able to ascertain whether or not they are in conflict with their own laws.

What? No, that's what the national courts can do, and do do.

poeticseraphim wrote: »

Infact that was one of the key issues that led to the banking crisis regulation that was in conflict with itself and company banking lawyers and accountants unable to agree or unwilling to. And one central archetect supposedly there to create rules that clear it up but in fact are deeply flawed.

Er no. No idea why you think that, but I don't think anyone else has mentioned that as the problem.

poeticseraphim wrote: »

It is not like the US and the Supreme court..it is more like the EU high court in the middle of a web of confusion of totally different systems. Especially in regards to banking law where how it is carried out in practise may differ from place to place.

Part of the problem is no one can tell if banks broke national law or did EU law overide it?

It seems odd to me that a treaty could be created that the German court felt might have constitutional issues? Don't the EU have lawyers to forsee such issues an construct treaties to avoid them? It just seems incompetant for a Govt to agree to something that might be against there own constitution. Especially right now. When it creates such delays.

But thats the EU.

Well, no, it isn't. It's your personal confused version of the EU, and I'm not sure where to start disentangling it, or even whether that would necessarily improve things.

There is no "EU" in the sense you're using it. The "EU" does not write treaties. The EU's treaties are written jointly by the member state governments, and it's up to each national government to get what it needs to avoid domestic legal problems negotiated into the Treaty - unfortunately, these may well conflict with each other. And the problems the German government is having don't even stem from that source - they're the result of the purpose of the ESM. The people taking cases want the ESM ruled illegal because of what the ESM is intended for, not because of some particular article or other.

cordially,
Scofflaw

poeticseraphim

Scofflaw wrote: »

Basically, no, insofar as that really needs an answer.



So the German court could rule that the ESM was in breach of the EU treaties while the Irish court rules it isn't? Or vice-versa? How's that going to solve the situation? Is the ESM against the treaties or not?



What? No, that's what the national courts can do, and do do.



Er no. No idea why you think that, but I don't think anyone else has mentioned that as the problem.



Well, no, it isn't. It's your personal confused version of the EU, and I'm not sure where to start disentangling it, or even whether that would necessarily improve things.

There is no "EU" in the sense you're using it. The "EU" does not write treaties. The EU's treaties are written jointly by the member state governments, and it's up to each national government to get what it needs to avoid domestic legal problems negotiated into the Treaty - unfortunately, these may well conflict with each other. And the problems the German government is having don't even stem from that source - they're the result of the purpose of the ESM. The people taking cases want the ESM ruled illegal because of what the ESM is intended for, not because of some particular article or other.

cordially,
Scofflaw

The German court is ruling about constitutional issues ...but to be honest they have every right to rule on the ESM within itself and give legal opinion on it. This would affect only Germany (officially) but in reality it would have bearing for other countries.

No that is not the way national courts work each decision influences a de facto working system and each subsequent intrepretation. They try to act in unison.

As regards EU wide banking regulation leading to a substantial cause of the crisis it has been identified as a core problem. Infact it was found to be a ciore problem by courts in Britain in recent cases.

The ISAB was responsible for constructing EU regulation which forced lenders to deny losses on loans until the borrower got in formal contact to state they could not be repaid. But in reality the time between these loans repayments being stopped and a formal statement of that fact could amount to years. Official audited accounts for banks around Europe were misleading as they relied on information based on heavily technically flawed EU regulation.

The British house of Lords has ruled that the ISAM and EU regulation was infact responsible for this. And it was then William Hague announced a full audit of all EU law and regulation in Britain.

Officially clean audits were misleading due to an accounting error due not to a mistake but forced by flawed EU accounting laws.

One regulator stated
“As with other regulators worldwide, the Central Bank used audited financial statements as a primary tool in its supervision of regulated firms.” Despite receiving “clean” audit reports, they were “under-providing for impairment”.

By impairment they mean unregcognised losses....

A UK report stated
“not identifying the accounting standard as the root cause of the initial phase of the banking crisis has led to several misdiagnosis”.


So i would disagree with your stance on EU regulation and the potential for a central error to go unoticed accross many countries and because they may be legally obliged to follow this flawed regulation.


EU treaties are negotiated by Sovreign govts ...but are constructed and developed by lawyers and technocrats. All very intelligent people. But they have been trained in different legal systems. And believe me one of the most diverse areas of law form country to country is company and banking law. The margin of error and technical flaws in these regulations is made much greater. They are also cultural systems in place within civil law and assumptions.


I agree with you on your last point ..somewhat..What you bring a case before a court for officially and why you really bring it before a court are two different things. The German Judicary has been warning for some time that the German constitution is being pushed to far and too much power is going to Brussels on balance. They have been waiting for a big case to try.


Whether or not the ESM is technically flawed is something i think i disagree with you on. There are concerns about flaws with certain articles and conflicts with existing EU law and the ESM. Not to mention huge discrepencies between the bailouts are in reality being carried out and the ESM.

Anyway the point is if a German court rules that the bailouts are unconstitutional or the ESM is or it is flawed it is pretty certain they will not happen. And that being the case it like giving a German court the position of the an EU court maybe not legally but in action.

padser12345

Just a thought...

Is it implausible that if Germany rules the ESM to be unconstitutional, that the "IMF" may then be used as the vehicle to administer the funds needed, via the way the ESM were going to collect the money?

Would it not be just like a 'private contract' outside any EU rules?



regards
padser

padser12345

Quote poeticseraphim

"EU treaties are negotiated by Sovreign govts ...but are constructed and developed by lawyers and technocrats. All very intelligent people.

"So i would disagree with your stance on EU regulation and the potential for a central error to go unoticed accross many countries and because they may be legally obliged to follow this flawed regulation."


Is there any chance that these things are deliberately left unnoticed? Maybe to create a 'quango' to keep the hoop's jumped through, or maybe something more?

poeticseraphim

It is looking very likely the German court will back it at this stage.

I would say it will rule in favour of it from the shift of position in regards to bond buying from the German govt...


The bundesbank is independant but i think even they are seeing it as the nly way at this point ...it may see the German court as being useful to impose conditions..which might actually be no bad thing..


There actually appears to be no contradiction with either the Fiscal compact treaties the ESM and the German constitution from anything i have read...

later12

padser12345 wrote: »

Just a thought...

Is it implausible that if Germany rules the ESM to be unconstitutional, that the "IMF" may then be used as the vehicle to administer the funds needed, via the way the ESM were going to collect the money?

Yes. That's likely. There are still problem with replying on the IMF in place of the ESM though, a major one being that it impinges upon the banking union and the detachment of the sovereigns from the European financial system support mechanisms as anticipated under the ESM.

That's because the IMF can only lend to sovereign nations - it is prohibited from lending directly to financial institutions.

I presume you would also want the IMF applying for funding via the Eurosystem as opposed to sovereign governments, which would appear to be the more sensible approach if it could be done without legal challenge.