Page - 148 - in Austrian Law Journal, Volume 2/2018

ALJ 2018 Hannes Hofmeister 148 transmission. The Council may object to the decision. In the event of an objection, the Council may itself adopt another decision on the matter, or refer the matter back to the Board of Governors for another decision. […] (4) Where the Council acts in accordance with paragraphs 1 or 2, [...] the votes of members of the Council representing Member States whose currency is not the euro shall be suspended. A qualified majority shall be defined in accordance with Article 238(3) TFEU.61 In other words, if the Council objects to a decision made by the Board of Governors, it can adopt another (diverging) decision on the matter. This decision is made on the basis of the qualified majority rules of Article 238(3) TFEU (55%/65%).62 In summary, under the old system unanimity used to be the rule, whereas the 85% threshold was the exception (‘emergency procedure’). In contrast, under the new system, the 85% threshold becomes the rule and the new exception for emergency cases lowers requirements even further (55%/65%). d. Modified Conditions for Activating Stability Support Moreover, the Commission proposal modifies the conditions under which stability support can be activated. Article 12(1) of the draft statute stipulates that the EMF may provide stability support if this is ‘indispensable to safeguard the financial stability of the euro area or of its Member States’. In contrast, under the old ESM Treaty such support could only be provided if necessary ‘to safeguard the financial stability of the euro area as a whole and of its Member States’.63 Although only four words have been changed, the implications of this modification should not be underestimated. In the future, financial support could thus be provided even if it is only the financial stability of a single Member State that is in danger, while so far the stability of the euro area as a whole had to be at stake. Such a softening of the conditions for stability support might increase the incentives for moral hazard by individual Member States. 2. Conclusion: ‘Honni soit qui mal y pense’ In conclusion, the draft proposal contains a plethora of changes. Apart from the provisions on the common backstop to the Single Resolution Fund (SRF), these changes are often difficult to detect – sometimes only a few words are changed and sometimes they result from complex cross- reference. Hence, one is left guessing: Is this a case of suboptimal legal drafting or a deliberate strategy? III. Integrating the ESM into the EU legal framework – a critical analysis 61 Article 3(2) and 3(4) COM (2017) 827 final, supra note 6, at 27. 62 Note that the votes of the members of the Council representing Member States whose currency is not the euro shall be suspended, see Article 3(4) COM (2017) 827 final, supra note 6, at 5. 63 Articles 3 and 12 ESMT.