EU committee seeks finance minister clarification on ESM stance

Anneli Ott (Centre), Riigikogu EU Affairs Committee chair.
Anneli Ott (Centre), Riigikogu EU Affairs Committee chair. Source: riigikogu

The Riigikogu's European Union Affairs Committee has requested clarification from Minister of Finance Martin Helme (EKRE) on differences he has with the committee in the approach to reforming the European Stability Mechanism (ESM), a eurozone bailout mechanism. Under Estonian law, the government should adhere to the line set out by the committee, which in this case in turn had adopted a position taken by the previous administration.

"Up to now, the European Union Affairs Committee has proceeded from the position approved by the government, that decisions regarding the ESM are made as written down in the existing treaty – unanimously, as a general principle," said committee chair Anneli Ott (Centre), according to a Riigikogu press release.

"Only in emergency situations, when the stability of the whole euro area is threatened and the decision is time-critical, is qualified majority voting used," Ott added, noting that the assessment of a crisis situation was based on analyses from the European Commission and the European Central Bank (ECB).

Deputy chair of the committee Riina Sikkut (SDE) pointed out that abandoning the unanimity requirement had not been discussed at a meeting of finance ministers last week.

"The protective measure of the Single Resolution Fund of the Banking Union, which will be established, and the limits of which will be decided unanimously, was discussed [at the meeting]. Withdrawals from this are made by a majority vote only in emergency, when speedy decision-making is key. Such decisions can be made only within the framework which has been unanimously established earlier," Sikkut said.

At its sitting on June 10, the committee supported positions regarding ESM reform agreed at a government sitting on November 22 2018.

The coalition at the time was made up of Centre, Isamaa and the Social Democratic Party (SDE), with the Conservative People's Party of Estonia (EKRE) only replacing SDE in the new coalition following the March 3 election.

Pursuant to § 152 of the Riigikogu Rules of Procedure and Internal Rules Act 2007, the European Union Affairs Committee, acting in the name of the Riigikogu, has the right to take a position, which the government is obligated to adhere to. If the government fails to do so, it must at the earliest opportunity explain its reasons to the committee.

The committee again discussed ESM reform in connection with Estonia's positions at the forthcoming Euro Summit. Prime Minister Jüri Ratas (Centre) gave the committee an overview of Estonia's positions, and said that Estonia has supported finding a balanced solution in the decision process of ESM loans.

In Ratas' opinion, it should be possible to make decisions sufficiently rapidly on granting loans to the Single Resolution Fund in cases of emergency or in a major crisis, at the same time taking into account the competences arising from the constitutions of member states.

The ESM, established in 2012, is based in Luxembourg and is a permanent safeguard on the eurozone, with financial assistance programs for eurozone member states when in financial difficulty, up to a maximum lending capacity of €700 billion.

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Editor: Andrew Whyte

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