Estonia’s parliament approved the euro area’s permanent rescue fund as the Baltic nation’s drive for closer integration with European institutions outweighed concerns over supporting richer countries.
Lawmakers in the capital, Tallinn, voted 59 to 34 with one abstention to ratify the European Stability Mechanism today. The ESM will succeed the temporary European Financial Stability Facility, or EFSF, which was used to provide emergency loans to Ireland and Portugal and a second round of aid to Greece.
Estonia’s Supreme Court in July ruled that the ESM’s founding treaty is in line with the Baltic nation’s constitution, overcoming an appeal by Justice Chancellor Indrek Teder, a constitutional watchdog.
“I certainly won’t agree with those saying that after today’s vote, Estonia will hemorrhage money,” Jaanus Tamkivi, the parliamentary head of the senior ruling party, the Reform Party, said before the vote. “Still, I also don’t agree with those saying the guarantees we are providing now can’t ever materialize. But we have to be optimists.”
Estonia, which joined the euro in January 2011, is the poorest member of the 17-nation single-currency region. Its ESM contribution would be 0.186 percent of the total, compared with guarantees of 2 billion euros ($2.4 billion), or 0.27 percent, to the EFSF.