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A Greek bail-out may lead to questions over Lisbon treaty

Wednesday 12 May 2010 - by Bernadette Mill

The Finance Ministers of the 16 Euro zone countries have pledged to guarantee the debt of any member state in the zone.

The wider package comprises of €440bn in loans or guarantees from eurozone states, €60bn from the European Union budget and an extra €250bn from the International Monetary Fund.

The severity of the financial crisis in Greece has plunged the eurozone into a state of emergency, with Southern euro zone members concerned about possible contagion.

As a member of the eurozone, Greece is not eligible for the Medium-Term Financial Assistance loan. Article 143 of the Lisbon Treaty states that the facility is only available to member states with, ‘a derogation’ – countries who have not committed to the third pillar of Economic and Monetary Union in other words, those outside of the euro zone.

Article 125 of the Treaty expressly prevents the European Union and individual nation states from fiscal irresponsibility and therefore expecting financial assistance from any individual member states or the Union collectively due to its circumstances.



The principle of zero co-responsibility was created by the Maastricht Treaty as a vital component of Economic and Monetary Union. This suggests that the partial bailout of Greece by other eurozone states and especially Germany, as the largest donor State, runs counter to the spirit of the Article.

The recent agreement to guarantee eurozone debt could face a legal challenge in the German Constitutional Court.

The creation of a European Monetary Fund as a means to securing the stability of the common currency has also been suggested by the German Chancellor Angela Merkel and the French Prime Minister Francois Fillon.

But this would only be possible through amending the Lisbon Treaty. Another option available to proponents of an EMF could be to integrate the amendments needed to Article 125 in the accession treaty of an EU membership candidate state.


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