Comment on proposed European Stability Mechanism

Treaty of Debt - An Eye Opening Video on the ESM Bailout Mechanism

Mish’s Global Economiuc Analysis,

29 October, 2011

Inquiring minds are interested in the terms of the European Stability Mechanism (ESM) accord scheduled to replace the EFSF. The following video highlights the key sections of the proposed treaty.

There are comments on The Telegraph article A German view of the bailout deal which is where I found the video.

Key Details of ESM Accord

• Article 8 says "Authorized Capital stock 700 billion Euros"

• Article 9 says "ESM members irrevocably and unconditionally undertake to pay capital calls on them within 7 days"

• Article 10 allows the ESM board of governors to "change the authorized capital and amend article 8 accordingly"

• Article 27 says ESM shall enjoy "immunity from every form of judicial process". Thus the ESM can sue member countries but no one can challenge it. No governments, parliament or any other body or laws apply to the ESM or its organization.

• Article 30 says "Governors, alternate governors, directors, alternate directors, the managing director and staff shall be immune from legal process with respect to acts performed by them (...) and shall enjoy inviolability in respect of their official papers and documents"

There are no independent reviewers and no existing laws apply. Thus Europe's national budgets will be in the hands of one single, unelected body that is accountable to no one and immune from all legal actions.

Is this the future of the EU or will the German supreme court and other governments put an end to it?

Mish Shedlock