Greece: EU's legal, political headache
The prospects of Greece abandoning the euro sent EU legal experts scrambling for the law books Thursday as it became clear that European Union rule provide for exit from the entire 27-nation bloc - but not from the eurozone.world Updated: Nov 04, 2011 00:58 IST
The prospects of Greece abandoning the euro sent EU legal experts scrambling for the law books Thursday as it became clear that European Union rule provide for exit from the entire 27-nation bloc - but not from the eurozone.
Analysts warned that a walkout by a country seen as Europe's ancient cradle of democracy would spell political disaster.
"On balance, I think Greece is likely to be outside the eurozone within 12 months but I don't believe it will be forced out of the EU. It would be playing with fire," Simon Tilford, chief economist at London's Centre for European Reform, told AFP.
Fears of the EU losing a member emerged as Brussels experts confirmed that the bloc's rule book, the Lisbon Treaty, omits to provide for a member of the 17-nation eurozone to opt out of the 12-year-old single currency.
"The treaty doesn't foresee an exit from the eurozone without exiting the EU," said European Commission spokesperson Karolina Kottova.
A European Central Bank report, penned as economic strains grew in late 2009, concluded that "exit from European Monetary Union, without a parallel withdrawal from the EU, would be legally inconceivable."
Article 50 of the Treaty that came into force in December 2009 introduced an EU exit clause for the first time but it has never been used.
"Nobody can be forced; the other member states have to agree and both sides have to work out an agreement on the conditions of the exit," Janis Emmanouilidis of the European Policy Centre think-tank told AFP.
A Greek exit from the union, he added, "would be a catastrophe for the country and for the EU," while London-based Tilford said it would represent "a catastrophic failure for the EU."