September 24, 2012
This Wednesday, all 17 EMU countries will agree on an “interpretative declaration” that will be added to the ESM treaty. It aims to ensure that the ESM treaty is to be interpreted in line with the two conditions recently set by the German Constitutional Court, i.e. (1) no exceeding of the upper ceiling of national guarantees without prior parliamentary approval and (2) full information to national parliaments despite require-ments of professional secrecy and immunity.
The joint declaration paves the way for Germany’s ESM ratification, which is to be expected by the end of next week. Add another two weeks to pay in the first two tranches of the capital reserve (EUR 34 bn) and ESM should be fully operational by mid-October. One downer remains: the interpretative declaration is not legally binding – new constitutional complaints are most likely to follow soon.
© Copyright 2013. Deutsche Bank AG, DB Research, D-60262 Frankfurt am Main, Germany. All rights reserved. When quoting please cite “Deutsche Bank Research”.
The above information does not constitute the provision of investment, legal or tax advice. Any views expressed reflect the current views of the author, which do not necessarily correspond to the opinions of Deutsche Bank AG or its affiliates. Opinions expressed may change without notice. Opinions expressed may differ from views set out in other documents, including research, published by Deutsche Bank. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.
In Germany this information is approved and/or communicated by Deutsche Bank AG Frankfurt, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht. In the United Kingdom this information is approved and/or communicated by Deutsche Bank AG London, a member of the London Stock Exchange regulated by the Financial Services Authority for the conduct of investment business in the UK. This information is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in Korea by Deutsche Securities Korea Co. and in Singapore by Deutsche Bank AG, Singapore Branch. In Japan this information is approved and/or distributed by Deutsche Securities Limited, Tokyo Branch. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product referred to in this report and consider the PDS before making any decision about whether to acquire the product.