Presenting The ECB's Own Reflections On A Member Country's "Withdrawal And Expulsion From The EU and EMU"

Tyler Durden's picture

The trope du jour in Europe now appears to be that Greece will be temporarily expelled from the eurozone following the ECB agreement to allow Greece to default "temporarily" whatever the hell that means. Good luck pushing a freefall (not a prepack) through bankruptcy court (what bankruptcy court: Southern New York? Eastern Santorini? Upper Volta? Mars?) in the 1-2 weeks that the idiot bureaucrats think it would take. And while they can come up with whetever BS to paint the tape as idiot algos once again go berserk on positively emoting headlines at least until tomorrow when everything collapses again, and send the EUR higher, the truth is that the biggest refutation of this approach comes from none other than the ECB, which in a paper titled: "Withdrawal and Expulsion from the EU and EMU - some reflections" tells us that this is pretty much impossible. To wit: "This paper examines the issues of secession and expulsion from the European Union (EU) and Economic and Monetary Union (EMU). It concludes that 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." The fact that the paper was written by a Greek back in 2009 is oddly ironic. That said, we assume this is merely yet another observation that will be ignored by the Statusquocrats who continue on irrelevant of facts of reality with their failed plan to preserve the EUR for a few more months no matter the taxpayer cost.

Full paper.

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