Germany and Italy hold up ESM ratification
Tuesday 10 July 2012
The entry in to force of the European Stability Mechanism (ESM), the eurozone’s rescue fund, is being held up by Germany’s Constitutional Court in Karlsruhe, which has yet to rule on a legal challenge to the ESM treaty brought by several groups, including academics and a private citizens’ initiative led by former Justice Minister Herta Däubler-Gmelin. The ESM can only come in to force once countries representing 90% of its paid-in capital have approved it. It was due to be in place by 9 July but delays in Germany and Italy, where the parliament has yet to ratify the treaty, have meant that EU officials are now pushing the deadline to the end of July. Estonia and Malta also have yet to ratify it. The ESM has been given the power to recapitalise banks directly, which Spain and Ireland intend to tap when the fund is up and running.