The Estonian Supreme Court ruled on Thursday that the treaty founding the European Stability Mechanism (ESM) is in accordance with the Constitution of Estonia.

"Although the contested article restricts the financial competence of the Estonian Parliament, the principle of rule of law and the sovereignty of Estonia, the restriction is justified," said a statement.

In March, Estonian Justice Chancellor Indrek Teder challenged the constitutionality of a provision in the treaty establishing the ESM, taking the position that all decisions on granting aid must be made unanimously among member states, not with the 85 percent majority stated in article four of the treaty.

On May 8, the Estonian Supreme Court discussed the case at a public hearing in which the cabinet and the Bank of Estonia both supported the European legislation.

If the treaty is approved by eurozone members, Estonian taxpayers would place around 150 million euros at the disposal of the ESM and guarantee another one billion euros in loans.

Estonia is currently one of three EU members to be reviewing the ESM in a constitutional court, the others being Germany and Ireland.