France's parliament on Tuesday ratified the European Stability Mechanism (ESM), the European Union's future permanent rescue fund. Following approval by the lower house National Assembly on February 21, the Senate cleared two treaty changes that will lead to the replacement of the temporary European Financial Stability Facility (EFSF) with the ESM.
The upper house approved the changes in a vote of 169 to 35, with lawmakers from President Nicolas Sarkozy's right-wing UMP and centrists backing the bill, the opposition Socialists abstaining and Communists voting against. The first change alters an article in the EU treaty to authorise the creation of the ESM while the second change defines its operating methods.
The permanent 500-billion-euro ($657-billion) ESM, finalised last month and due to being operating in July, aims to prevent the eurozone debt crisis spreading throughout the 17-nation eurozone. A financial firewall against any repeat of the sovereign debt crisis, there are still issues that need to be resolved about the fund, including its ultimate size.
Eurozone leaders had been due to meet Friday on the second day of an EU summit to discuss combining the EFSF with the ESM, giving the debt-wracked zone total funds of about 750 billion euros with which to help weaker member states. But German reluctance to bolster the EU debt rescue funds delayed the talks despite calls from the G20 for Europe to make progress on the issue, a eurozone governmental source said Tuesday.
The treaty changes for the ESM are distinct from changes required for the new EU fiscal stability pact, which is to be officially signed on March 1 and which the frontrunner in France's April-May presidential vote, Socialist Francois Hollande, has promised to re-negotiate. European Affairs Minister Jean Leonetti slammed the Socialists for refusing to back the mechanism.
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