ESM Breaches Vienna Treaty

In my study of the ESM treaty and the constitutionality thereof, I noticed a curious construction in the treaty:

Establishment and members
1. By this Treaty, the Contracting Parties establish among themselves an international financial institution, to be named the "European Stability Mechanism" ("ESM").
2. The Contracting Parties are ESM Members.
Structure and voting rules
1. The ESM shall have a Board of Governors and a Board of Directors, as well as a Managing Director and other dedicated staff as may be considered necessary.
Board of Governors


6. The Board of Governors shall take the following decisions by mutual agreement:
(l) to make adaptations to this Treaty as a direct consequence of the accession of new members, including changes to be made to the distribution of capital among ESM Members and the calculation of such a distribution as a direct consequence of the accession of a new member to the ESM, in accordance with Article 44;
Legal status, privileges and immunities
2. The ESM shall have full legal personality; it shall have full legal capacity to: [...]

So, we have a treaty that establishes a new legal personality, a new legal personality that is not one of the contracting parties and which is supposedly able to make adaptations to this treaty?

How on earth can a legal party that is no party to a legal contract make adaptations to that contract??

This looked like an absolute legal impossibility to me and when we looked up the treaty of Vienna, I found exactly that:

Article 39
General rule regarding the amendment of treaties
A treaty may be amended by agreement between the parties. The rules laid down in Part II apply to such an agreement except insofar as the treaty may otherwise provide.

As far as I can tell, the Vienna treaty does not mention anything about amending treaties other than by agreement between the contracting parties.

Of course, I also wrote this to the Dutch First Chamber which will hopefully take this into consideration within their process.

It seems to me I may have found something important, because IIRC the same trick has been used with the Lisbon Treaty.

In the ESM case, you do have representatives of States that make decisions, but these act in their role as governors OF the ESM, and NOT in their roles as state representatives. In the Lisbon treaty, you have something similar, but I haven't looked that up (yet).

Either way, the construction is that a new legal personality is established by treaty and then the treaty supposedly becomes self-amending by delegating (a part of) law-making powers to some council OF the new legal personality.

As far as I can tell, in order for this to be legally valid, the decisions would have to be made by persons while performing their role as representatives of the States and this would have to be done under the rules of the Vienna treaty.

In other words: I think that the self-amending aspects of a treaty by delegating decision making power to a party that is not a contracting party is legally doubtful. An agreement between state representatives in their role as members of the council of the ESM instutute is NOT the same thing as an agreement between the contracting parties of the ESM treaty.

It may be possible to more or less establish a supra-national law-making and decision-making body, but then you would have to be very careful to make sure that the different roles of the state representatives are clearly defined and proper procedures are in place.

An agreement to establish a voting procedure amongst the states (representatives) that establish a treaty is something completely different than allowing some third party to make decisions that are legally binding for the states that established the treaty, especially regarding the amendment of the treaty, since that is clearly regulated in the treaty of Vienna.

So, I also wonder if amendments to the Lisbon treaty, such as the recent amendment for establishing the ESM, is actually legally binding for the member states under the Vienna treaty, because the current EU also has legal personality, while under the Maastricht treaty it did not.

The economic situation is of course such that the ESM has no chance whatsoever to succeed. In a nutshell:


Here’s the REAL DEAL NO BS Situation with Europe (Warning What Follows is EXTREMELY BAD).

The media is rife with misrepresentations and analysis of the EU. Here’s the real deal.

1. The ECB is tapped out. Having provided over €1 trillion in funding via LTRO 1 and LTRO 2, taking on over €700 billion in PIIGS debt putting its own solvency at risk, it simply cannot launch another LTRO scheme for the following reasons:

2. The Federal Reserve cannot step in. I know the blogosphere is rife with claims that the Fed will just print and print and print to save the day. The people writing these claims fail to see that:

3. The IMF cannot step in because:

4. Germany is politically fed up and monetarily tapped out:

5. China cannot be a savior:

6. Germany and others have already taken steps to prepare for a break-up of the EU. In Germany’s case:

7. The ECB has taken similar actions permitting it to roll back the losses from its PIIGS holdings onto National Central Banks.

8. Spain is on the verge of a banking collapse. Its efforts to deal with an insolvent banking system by merging crappy banks and shifting losses onto its public balance sheet are proving to be absolute failures due to the fact that:

In plain terms, having spent two years and hundreds of billions (even TRILLIONS of Euros) dealing with the EU Crisis, the powers that be over there have backed themselves into a corner from which they cannot escape. Let me be blunt:


It’s game over for that idea. And the idea that one bankrupt nation (even Germany sports a REAL Debt to GDP of over 200% when you include unfunded liabilities) prop up several others is ridiculous.

And all of this is happening at the precise time that Spain is about to implode.

This is the REAL DEAL for Europe. Anyone who has some kind of counter-argument to these points either doesn’t understand the political environment we’ve entered (even Central Banks are fed up with bowing to political pressure from politicians) or is simply hoping that by ignoring these realities they (the realities) will go away.

They won’t. Europe’s banking system as a whole is at risk a la 2008. And it’s nearly four times the seize of the US banking system.