Austrian parliament forms panel to screen ESM requests

Reuters

Austria set up on Tuesday a parliamentary panel to review confidential requests for help under the euro zone's new European Stability Mechanism (ESM) bailout fund.

The 16 members of the committee will also screen any plans to change the ESM treaty or top up its capital. The panel needs to approve any of these things in camera before the Austrian government can back them in Brussels.

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Binding parliament into the ESM decision-making process was a key component of getting the ESM through the Austrian assembly in July with the required two-thirds majority vote.

The assembly's approval prompted rightwing opposition parties which object to bailouts in principle to seek to launch a constitutional court challenge to ratification via the regional government of Carinthia.

The parliamentary panel, whose members are not named publicly, will be headed by Gabriele Tamandl of the conservative People's Party (OVP), the OVP said.

Germany was the last country in the 17-member euro zone to ratify the 700 billion euro ($903.35 billion) ESM, a main tool to stem the debt crisis that required bailouts of Greece, Ireland and Portugal and threatens big countries like Spain and Italy.

Germany's Constitutional Court gave the bailout fund the green light on September 12 but said Berlin must meet certain conditions, including giving parliament veto rights over any increase in Berlin's 190 billion euro ESM contribution.

(Reporting by Michael Shields; editing by Stephen Nisbet)