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Monday, 11 January 2010

I CAN HAZ DRACHMA?

[post under construction]

How does a country go about leaving the Eurozone? Do you have to leave the EU in order to do it? Does it make any difference whether you jump or are pushed?



First, I think it's important to note, partly in response to George MUPPET Romaios, that the German Bundestag was first to put the word out that Greece cannot be kicked out the EU even if we become insolvent. Although we can have some of our rights as an EU member revoked for breaking the rules.

However, a recent working paper from one of the legal minds over at the European Central Bank (a Greek Cypriot too by the looks of it) also says that we can't leave the EMU without leaving the EU, and in fact, we can't do that at all unless we do it unilaterally - an endeavour that will be next to impossible in legal terms in the sense that it may not free us of our obligations to our former partners.

The law geek says:

"negotiated withdrawal from the EU would not be legally impossible even prior to the ratification of the Lisbon Treaty, and that unilateral withdrawal would undoubtedly be legally controversial; that, while permissible, a recently enacted exit clause is, prima facie, not in harmony with the rationale of the European unification project and is otherwise problematic, mainly from a legal perspective; that a Member State’s exit from EMU, without a parallel withdrawal from the EU, would be legally inconceivable; and that, while perhaps feasible through indirect means, a Member State’s expulsion from the EU or EMU, would be legally next to impossible. This paper concludes with a reminder that while, institutionally, a Member State’s membership of the euro area would not survive the discontinuation of its membership of the EU, the same need not be true of the former Member State’s use of the euro."
The lesson here seems to be that Greece will almost certainly come out of the mess it's in an EU and EMU member.

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