Estonian parliament ratifies ESM treaty

At an extraordinary session on Thursday afternoon, the Estonian parliament passed the Bill on the Ratification and Implementation of the Treaty Establishing the European Stability Mechanism (ESM). The bill was approved by the 101-seat chamber in the third reading with 59 votes to 34 and one abstention. The bill passed its first reading on 8 August and second reading earlier on Thursday.

On Tuesday the bill was reviewed  by the parliamentary finance committee, which in the course of a five-hour discussion went through 12 proposals for amendments and made 10 changes to the bill.

The chairman of the finance committee, Sven Sester, said the amendments significantly increased the sphere of the Riigikogu’s jurisdiction by bringing the approval of memorandums of understanding and amendments, which would require rapid decision-making, into the plenary of the Riigikogu rather than leaving them to be decided by the standing committee on European Union affairs.

The Treaty Establishing the European Stability Mechanism was signed in Brussels on 2 February 2012. The bill concerns the national performance of the financial obligations assumed by the state. According to the bill, Estonia agrees to participate in ESM to the extent of 13 020 shares with a nominal value of 1.320 billion euros, of which 148.8 million euros will be contributed as paid-in capital within five years as of the entry into force of the treaty and 1.1532 billion euros will be contributed as calls of capital on receipt of a capital call pursuant to the treaty.

The amounts to be paid to the ESM will be reflected in the state budget.

All euro area member states will become ESM members and stability support will be granted, under strict economic policy conditionality, to ESM members which are experiencing severe financing problems. In setting the conditions and financing economic programs, the ESM will co-operate with the International Monetary Fund.

Source: Estonian Review

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