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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ratso's picture

As I predicted a short while back.

PaperBear's picture

So the Greeks are slaves to their European Union masters, is that it ?

ratso's picture

No, the Greeks lied their way into the EMU with the help of Goldman Sachs and then sold bonds they knew they couldn't repay and used that money to give themselves a standard of living that they hadn't earned.  It's time for them to be held accountable.  The deserve to be kicked out of the EMU.

Spitzer's picture

They will not be kicked out of the EU. They are lucky to be in. Not having monetary sovereignty is a good thing. Nothing destroys currencies faster then politicians who try to be central bankers. The EU has a more independent central bank then the US.

ratso's picture

Right - they will not be kicked out of the EU just the EMU - The European Monetary Union - that is, the Euro Zone because they can't handle it responsibly and will not be able to do so in the foreseeable future.

edotabin's picture

Once the money is issued locally, it will only reinforce what was happening all these years. This is a matter of mentality, not money.

Spitzer's picture

Looking back at 2010 (just to get a full year's picture) the US ran a $500 billion goods and services deficit for the year. The Eurosystem (even with those lazy PIIGS) actually ran a trade surplus for the year, exporting more goods and services than it took in.

Of course there is a huge imbalance inside Europe between the states running a large surplus and those running a large deficit. But with a shared currency the adjustment pressure for such an imbalance is foisted elsewhere, not on the currency.

For the dollar, the structural deficit and debt of the US places a massive devaluation pressure directly on the dollar.

King Euro



Ghordius's picture

It just means they can leave if they want while nobody can throw them out.

sabra1's picture

but before you leave Greece, sign over all your assets to us, just in case you don't return!

Hedgetard55's picture

So the EMU is sort of like the Hotel California, you can check in but you can never leave. Or a roach motel.

molecool's picture

Exiting EMU still seems easier than quitting mt AT&T Wireless contract.

Escapeclaws's picture

Try closing a PayPal account!

TaxSlave's picture

Try closing a PayPal account!

Impossible.  Even if you close the bank account it was tied to.

That's how I got a flat forehead.  (Smack!  "WTF was I thinking?")

Zero Debt's picture

providing for the possibility of withdrawal might have increased its likelihood

This kind of statement makes it look like they weren't even confident that the benefits of the membership would be enough to retain the members.

Couldn't find a white paper on US secession to compare though.

MobBarley's picture

sounds like the inner dialogue of a man about to get laid


granolageek's picture

The Euro was carefully structured back in 1999 as "you can check in, but you can't check out.

As near as I can tell, the periphery thought they were nailing Germany, and Germany thought it was getting was turning the periphery into vassal states. I'm grinning at seeing they were both right.


TruthInSunshine's picture

This is like getting suspended from school, whether intentionally or unintentionally.

Greece gets to play Xbox 360 all day for a long, long time now.

They may or may not be 'allowed to return' to the EU upon the expiration of the passage of some time, assuming that they want to and that the EU still exists at that point.

MobBarley's picture

As part of the Greek European Austerity Expulsion Agreement,

the Parthenon and all Greek citizens will be relocated

to the Sinai peninsula. They will have 40 years to find a new home.

Good luck!


Ignorance is bliss's picture

I am surprised Gold and Silver have not gone Parabolic on the news of a Greek default. If I were a European, I would be moving everything into Gold and Silver. Hell, I am from the U.S. and have already done that.

SilverRhino's picture

The PM prices actions we are seeing is from the 1-2% of the population that is actually awake.   Just wait until 10% are awake?   Wild rides indeed.

espirit's picture

So, do the PIIGS know that they have litigation possibilities should they be expelled from the EU/EMU?  Greece will try that one on.

This whole ordeal has the markings of an intricate false flag and/or subterfuge to cover the dollah's race to zero.  

Jonas Parker's picture

Ahhh! The European International Lawyer Full Employment Act of 2011! Wish I could invest in this one...

Oh regional Indian's picture

There is a weird rule in these occult circles, where you have to get the permission of your victim before screwing them.
Notice how much wag-the-dog type stuff has been revealed prior to action.

This is what this game feels like. Everywhere, with bombs or drones or torture, they are, in their own twisted minds, asking the question to the listening sheepublic; Can I screw you harder now?

Click to open. Ring a bell?

TruthInSunshine's picture

By the way, does California, or for that matter, Texas (for different reasons), get to leave the United States/Estados Unidos, if even temporarily?

Jonas Parker's picture



That the general, great and essential principles of liberty and free government may be recognized and established,

we declare:

Sec. 1.  FREEDOM AND SOVEREIGNTY OF STATE. Texas is a free and independent State, subject only to the

Constitution of the United States, and the maintenance of our free institutions and the perpetuity of the Union

depend upon the preservation of the right of local self-government, unimpaired to all the States.


Sec. 2.  INHERENT POLITICAL POWER; REPUBLICAN FORM OF GOVERNMENT. All political power is inherent in

the people, and all free governments are founded on their authority, and instituted for their benefit. The

faith of the people of Texas stands pledged to the preservation of a republican form of government, and,

subject to this limitation only, they have at all times the inalienable right to alter, reform or abolish their

government in such manner as they may think expedient.

monopoly's picture

How do you even make this stuff up. I could never do it. Miners in consolidation mode. Hey guys. Imagine if all that cash sitting in MM funds and bonds came out and went to the miners. They might even bring them up to real value. Wow, what a thought.

monopoly's picture

ANF looks good here all. Those 17,000 poor souls losing their job at Borders and Cisco off to Abercrombie to buy new duds for job interviews.

How pathetic this country is.

Seize Mars's picture

what bankruptcy court: Southern New York? Eastern Santorini? Upper Volta? Mars?

Seize Mars!!!

Coke and Hookers's picture

This just demonstrates what has been obvious from day one: The Euro is a political instrument established to bring about political integration. It was never planned as a working currency. Now it has turned in their hands and is causing the disintegration of the EU. I hope the fuckers choke on it.

TaxSlave's picture




Sudden Debt's picture



speconomist's picture

h/t speconomist :)

entendance's picture

The Greek Orthodox Church owns more land than anyone except the state, employs thousands on the public payroll, has a stake in the nation's biggest bank, but campaigners say its tax payments are derisory.
More than 100,000 people have joined a Greek Facebook page "Tax The Church," and 29,000 have so far signed an online petition urging the state to harness "the huge fortune of churches" to reduce Greece's crushing budget deficit.
"The Church must pay its share of the tax burden," said former finance minister Yannos Papantoniou. "It is totally unreasonable in this situation that they contribute so little."

edotabin's picture

Isn't this like the whole tax evasion thing? General misappropriation cannot be corrected by trying to bring others into the fray. Not defending anyone here. Just saying the theft, looting, general laziness and sucking on the government boob people may be looking for additional scapegoats.

Djirk's picture

Statusquocrats I like that one, going into the Djirktionary