The Stability Treaty

It will come into effect once 12 euro area countries have ratified it. The target date for ratification is 1 January 2013. Each country will ratify the Treaty according to its own requirements – in Ireland’s case a referendum.

Ireland is the only country to decide to ratify by means of a referendum. All the others are ratifying it through their national parliaments.

No. The terms of the Treaty, as set out in its preamble, stresses that: “no provision of this Treaty is to be interpreted as altering in any way the economic policy conditions under which financial assistance has been granted to a Contracting Party in a Stabilisation Programme involving the European Union, its Member States or the International Monetary Fund”.

Ireland’s EU/IMF programme funding is secure until the end of 2013. The EU part of that financial assistance for Ireland is currently coming from the temporary European Financial Stability Fund (EFSF). The EFSF is to be replaced by the permanent European Stability Mechanism (ESM). Only those countries which ratify the Stability Treaty will have access to the ESM fund.

The Stability Treaty is formally called the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.

This is an inter-governmental Treaty agreed between twenty-five of the twenty-seven countries in the EU, including all countries using the euro. Much of what is in the Treaty is already provided for in EU law.

Article 2(2) of the Treaty makes clear that it will apply only insofar as it is compatible with the EU treaties.

It is not an EU Treaty as two member states (the UK and the Czech Republic) decided not to participate. It remains possible for those two countries to opt-in at a later date if they so choose. Article 15 of the Treaty provides for this.