Page - 144 - in Austrian Law Journal, Volume 2/2018

ALJ 2018 Hannes Hofmeister 144 5. Procedure The financial support outlined above will follow a complex procedure, starting with the request by a Member State for financial assistance. This request is to be addressed to the chairperson of the ESM’s Board of Governors.35 Assessment. Following this request, the Commission, in liaison with the ECB/IMF, will assess three aspects: (1) whether there is a risk to the financial stability of the euro area as a whole and (2) whether public debt in the respective Member State is sustainable.36 ‘If, on the basis of the sustainability analysis, it is concluded that a macroeconomic adjustment programme can realistically restore public debt to a sustainable level, the Commission will then assess (3) the actual financing needs of the respective state’.37 Negotiation. Based on this assessment, the BoG shall then entrust the Commission38 to negotiate a macroeconomic adjustment programme, the details of which will be set out in a Memorandum of Understanding (MoU).39 This MoU shall specify the conditionality attached to the financial assistance and be fully consistent with the overall EU framework for economic policy coordination.40 At the same time, the Managing Director of the ESM will prepare a draft financial assistance agreement, specifying the complex financial terms and conditions.41 Signature and approval. The MoU will be signed by the Commission on behalf of the ESM, subject to prior approval by the Board of Governors.42 ‘The Board of Directors shall then approve the financial assistance facility agreement detailing the financial aspects of the stability support to be granted’.43 Surveillance. Once the first tranche of financial assistance has been disbursed, the Commission – together with the ECB and the IMF – will monitor compliance with the macroeconomic adjustment programme.44 6. Dispute Settlement In case of a dispute between an ESM Member State and the ESM regarding the interpretation or application of the ESM Treaty, the dispute shall first be submitted to the Board of Governors for decision.45 Only if the ESM Member State contests the BoG’s decision, will the dispute be submitted to the ECJ.46 The ECJ’s judgment shall be binding on the parties in the procedure, which shall take the necessary measures to comply with the judgment within a period to be decided by the ECJ.47 Such a delegation of jurisdiction is possible under Article 273 TFEU, but is not without problems: 35 Article 13(1) ESMT. 36 Article 13(1)(a)-(b) ESMT. 37 ECB, The European Stability Mechanism, EBC Monthly Bulletin July 2011, 77. See also Article 13(1)(c) ESMT. 38 Together with the IMF and the ECB. 39 ECB, The European Stability Mechanism, EBC Monthly Bulletin July 2011, 77. See also Article 13(3) ESMT. 40 Article 13(3) ESMT. 41 Article 13(3) ESMT. 42 Article 13(4) ESMT. 43 Article 13(5) ESMT. 44 Article 13(7) ESMT. 45 Article 37(2) ESMT. 46 Article 37(2) ESMT. 47 Article 37 ESMT.