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Several months ago we deconstructed the EU proposal to introduce the European Stability Mechanism in 2013 on the No Agenda Show.
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In today's 'Fiscal Compact' agreement, signed by all EU member states except the UK, there is an additional change to the ESM:
"In order to ensure that the ESM is in a position to take the necesssary decisions in all circumstances, voting rules in the ESM will be changed to include an emergency procedure. The mutual agreement rule will be replaced by a qualified majority of 85% in case the Commission and the ECB conclude that an urgent decision related to financial assistance is needed when the financial and economic sustainability of the euro area is threatened." Qualified Majority Voting (QMV) was initially agreed to in the Treaty of Nice, and was intended to weigh voting rights in a manner that gave member states with smaller populations a fair share of any important vote.
So, instead of the ESM conditions (I'm getting to that) being changed by mutual agreement, only an 85% QMV is needed to make the desired changes. This means that Germany, France and just one other country could represent the desired majority. There are several that quality: Italy, Spain, Poland or a combo of two smaller states, like Greece and The Netherlands.
Clearly this ESM thing is important. So just what is ESM? I could summarize easily by saying that it is a loss of sovereignty for EU member states, direct levy of taxes that are paid to Brussels to bail out off-shore banks and more scary language, but this video (German with English subtitles) really does a great job of deconstructing the ESM in 3 minutes.
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