The Treaty Establishing the European Stability Mechanism was signed by the member states of the eurozone to found the European Stability Mechanism (ESM), an international organisation located in Luxembourg, to act as a permanent source of financial assistance for member states in financial difficulty, with a maximum lending capacity of €500 billion.

[3] This threshold was surpassed with Germany's ratification on 27 September 2012, bringing the treaty into force on that date for the sixteen states which had ratified the agreement.

[5] In June 2015, an updated EMU reform plan was released which envisaged that in the medium-term (between July 2017 and 2025) the ESM should be transposed from being an intergovernmental agreement to become fully integrated into the EU law framework applying to all eurozone member states, so that the ESM can be governed more smoothly by the EU institutions - under the competence provided for by the amended article 136 of the TFEU.

In particular, EFSM funding was granted under Article 122 of the TFEU, which stipulates that only states facing "severe difficulties caused by natural disasters or exceptional occurrences beyond its control" were eligible.

[21] As of February 2024 it had been ratified by all ESM member states except Italy, whose parliament rejected ratification in December 2023 and imposed a moratorium on reconsidering the decision for 6 months, preventing the amendment's entry into force.

[5] According to the text of the treaty, the ESM is open to accession by any EU member state once their derogation from using the euro has been lifted by the Council of the European Union.

If the court found the ratification unconstitutional, Holzinger stated that the government would have to "either defy the constitution by some means or other, or to negotiate after the fact with the other parties to the pact".

[137] In October 2012, Heinz-Christian Strache, leader of FPÖ, officially filed an individual constitutional challenge against the ESM,[139] and the Government of Carinthia voted in favour of launching their own case.

[140] The Austrian Constitutional Court ruled on 25 February 2013 that Strache's petition was inadmissible on procedural grounds,[141] and began deliberations on the Carinthian complaint on 6 March with a public hearing.

On 6 December the Senate urged then President Václav Klaus to give his assent,[144] arguing that he is constitutionally obliged to do so "without undue delay" after both houses have given their approval.

[147][148] Zeman, who is considered to be "pro-EU",[149] announced shortly after taking office that he would "respect parliament’s decision"[150] and gave his assent to the TFEU amendment during President of the European Commission Jose Barroso's visit to the Czech Republic on 3 April.

[100][151][152] The Estonian Chancellor of Justice concluded that Article 4(4) of the ESM treaty may violate the Constitution of Estonia and could not be ratified by Parliament in its present form.

[160] After the European Central Bank announced their intention to buy unlimited amounts of government bonds from troubled ESM states, another court challenge was launched requesting that ratification stop until this decision was reversed.

[166] Furthermore, the court stated that "Germany must express that it does not wish to be bound by the ESM Treaty in its entirety, if the reservations made by it should prove to be ineffective.

[167][4] After a German court rejected a last minute appeal claiming that this declaration failed to satisfy the imposed requirements, Germany completed its ratification of the treaty.

[175][176][177] Thomas Pringle, an independent member of the Oireachtas, challenged the legality of the ESM treaty under both Irish and European Union law.

On 9 July 2012, High Court judge Mary Laffoy decided that the ESM treaty violated neither EU nor Irish law.

It also highlighted that the ESM treaty basically replaced the intergovernmental temporary EFSF and the EU-law enacted EFSM, and that it did not limit the competence of the EU to introduce a similar support mechanism in the future.

[125] Members of the opposition Law and Justice party filed a complaint with the Constitutional Tribunal of the Republic of Poland on 26 July 2012, requesting that the bill ratifying the treaty be declared illegal as it had not been passed by a qualified majority.