Greece could be expelled from the Eurozone

[Krumplenump]

In light of the recent and ongoing economical fiasco in Greece, previously 'absurd' speculations that Greece may opt out or be kicked out of the Eurozone are no longer so far fetched.

If such a thing were to happen it would be the first major derrailment of the EUs drive for one Europe and could even herald a decline of the union in terms of expansion.

Could Greece be expelled from the eurozone?


The European Commission has approved Greek government plans for getting on top of its budget deficit. A huge relief in Athens, no doubt.
But the worries won't be dispelled just yet.
The pressing concern is will Greece default on its debts? And if that seems likely will the rest of Europe, or the IMF come to the rescue?
But beyond that there are some even bigger questions about the Euro.
In particular, will Greece quit the euro or even be expelled from the eurozone? It is certainly not an imminent prospect.
But the question is being asked and was recently put to the European Central Bank President Jean-Claude Trichet. His reply? "I don't comment on absurd speculation," he said.
But it seems one of Mr Trichet's in-house lawyers has been engaging in speculation along precisely those lines, whether it's absurd or not.
'Next to absurd'
In a working paper published on the European Central Bank's website, Phoebus Athanassiou writes about the possibility of secession from the European Union and from Economic and Monetary Union - the process which created the euro.

Jean-Claude Trichet doesn't comment on 'absurd speculation' over Greece

Such talk, he acknowledges, would until recently have been "next to absurd". But not now.
"Recent developments have, perhaps, increased the risk of secession, however modestly, as well as the urgency of addressing it as a possible scenario," he says.
The paper doesn't mention Greece by name, but those 'recent developments' must be the fiscal crisis that has engulfed Greece and to some extent other EU countries as well.
Why might one country want to quit - or others to expel? A messy default would be disruptive for other euro countries.
Those also considered by the financial markets to be under similar strain might well find it more difficult and expensive to borrow.
Several countries are potential candidates now for such financial contagion - including Spain, Ireland and Portugal.
And if the problems spread far enough, even those at the core, such as Germany and France, could find European export markets adversely affected.
Expulsion
The appeal of a voluntary departure is that a country would then be free to devalue its currency to improve competitiveness and to set its own interest rates.
That's not to say either expulsion or withdrawal is an easy way out.

Greece has been trying to reassure markets about its economy

Mr Athanassiou concludes that expulsion is legally almost impossible. The nearest thing possible, he argues, is creating some new community minus the state others want to exclude.
A voluntary departure, however, especially if agreed with the other members, is possible. But leaving the euro institutions would only be possible if the country left the European Union altogether.
Another possible scenario he mentions is that a country that has left the EU might still be able to use the euro, as a few non-EU countries already do.
These are the views of a lawyer and, of course, political considerations would intervene. Nor is this an immediate issue for today.
The focus now in the financial markets, and throughout the EU, is on whether Greece can sort its problems out and, if not, whether there will be some sort of international rescue.
In Athens and in Brussels the hope is that this talk about departure will remain speculation.

http://news.bbc.co.uk/2/hi/business/8496839.stm

For Europeans here, are you pro-EU (not Europe but the idea of a union), indifferent or against it?

 

[Sithious]

Eurozone?

Wth is that?

 

[Morgain]

If they expell Greece they can expell Belgium too in the near future!

I think the EU is there to help one on other and not leave them on there own when things don't turn out allright!

 

[Sithious]

If they expell Greece they can expell Belgium too in the near future!

I think the EU is there to help one on other and not leave them on there own when things don't turn out allright!

 

[Morgain]

All for on and one for all!!!!!!!!!

 

[Krumplenump]

lol.

The Eurozone is wherever the Euro is used.

 

[testing]

I heard about this on NPR. Evidently there is concern that some countries' debts (Portugal's, Italy's, Greece's and Spain's -- collectively known as PIGS -- no kidding!) will drag down the larger economy of the Eurozone. That's why there is talk of expelling them. Actually, I was surprised to hear this as I thought the U.S. was the only country with a debt problem.

Belgium's economy is doing relatively well, so I doubt there'll be much talk about expelling them anytime soon.

Sounds like it's one for all and all for one -- as long as things are going well! (Plus ca change, plus ca meme chose, if I can dust off my French.)

I'm not European, but if I was, I think I would certainly want the EU to remain intact for political, economic and military reasons. But it sounds like an even more collossal pain to get all those countries to play nicely together than it does to get our 50 states to play nicely together, and that is not easy!

 

[Roger]

But it sounds like an even more collossal pain to get all those countries to play nicely together than it does to get our 50 states to play nicely together, and that is not easy!

Right and agree.

 

[Morgain]

I heard about this on NPR. Evidently there is concern that some countries' debts (Portugal's, Italy's, Greece's and Spain's -- collectively known as PIGS -- no kidding!) will drag down the larger economy of the Eurozone. That's why there is talk of expelling them. Actually, I was surprised to hear this as I thought the U.S. was the only country with a debt problem.

Belgium's economy is doing relatively well, so I doubt there'll be much talk about expelling them anytime soon.

Sounds like it's one for all and all for one -- as long as things are going well! (Plus ca change, plus ca meme chose, if I can dust off my French.)

I'm not European, but if I was, I think I would certainly want the EU to remain intact for political, economic and military reasons. But it sounds like an even more collossal pain to get all those countries to play nicely together than it does to get our 50 states to play nicely together, and that is not easy!

Belgium has a huge debt too. Our debt was too big when we joined the EU and it is still increasing... the US is far not the only country whit debt problems not at all. Belgiums social security system is taking us down

 

[Stu]

"the south's gonna do it again"

Boy, imagine expelling states from the U.S. We could put Shai in charge of it!

 

[The Jester]

I doubt that belgium would be expelled from this, our influence on the EU is too big.

 

[Krumplenump]

Belgium was a founding member plus the capital of the EU is there, even if they deserved to be kicked out it never would be because to do so would be to kick out the EUs credibility and image.

Janet made a good point about comparing it to the US states, indeed Europeans have more difficulty integrating culturally due to unique and deep rooted local traditions. I am for free travel, right to work and live anywhere in the union you want, close economic and military cooperation, but I am against centralisation. Only laws directly affecting trade and economy should be centralised, the rest should remain local. The only reason I'm anti-Euro is because I liked examining the old monies.

It was a massive mistake letting in Bulgaria and Romania so soon. The ludicracy of centalising certain laws is evident in the fact that the UK taxpayer footed the bill of billions of Euros in the late 90's early 00's for Spains new highways and motorway system. There is severe imbalance. A more autonamous system like the US would foster far less understandable bitterness between countries that give and countries that take.

 

[BenW]

They could always come chill with the USA.

 

[Krumplenump]

How do Americans feel about a future power to rival the US? In fact already the combined GDP of the EU exceeds that of the US at 14.5 trillion USD compared to 14.25 trillion USD according to the cia world factbook. Trouble with Europe is that in the superpower sense, each states priority is their own, so the fiscal and military cooperation is much more fragmented than in the US meaning it's less of a world power.
The Euro is quickly catching up with the Dollar though as a world reserve currency.

 

[Shai Gar]

Boy, imagine expelling states from the U.S. We could put Shai in charge of it!

I'm kicking out Utah, Texas and Wisconsin.

 

[bamf]

How do Americans feel about a future power to rival the US? In fact already the combined GDP of the EU exceeds that of the US at 14.5 trillion USD compared to 14.25 trillion USD according to the cia world factbook. Trouble with Europe is that in the superpower sense, each states priority is their own, so the fiscal and military cooperation is much more fragmented than in the US meaning it's less of a world power.
The Euro is quickly catching up with the Dollar though as a world reserve currency.

I think the only way the EU could truly rival the US as a world super-power would be to essentially combine into one unified nation. I really don't see that happening.

The US, which is roughly the size of Europe, is mostly homogeneous. If you travel 4000 miles from coast to coast, you will pass through one nation, of one language, of one history, of one culture, with only minor local differences. To do such a thing in Europe would be to travel through thousands of years of different histories, numerous different languages, with numerous different cultures.

I really can't see Europe combining under one nation any time in the near future. One would be hard pressed to have so many nations give up most of their sovereignty, vastly different cultures (and it would be required for most of the nations to ignore their hostile histories with one another)

Granted, the EU might rival the US in economic strength, but to truly be a super-power it would need a political and militaristic ability that could rival the US.

 

[Barnabas]

I smell WWIV.

I'd also have to agree with MF, we may look like a split nationa time but were still one country. When something like war needs to be rallied to it's all for one.

 

[Krumplenump]

I think the only way the EU could truly rival the US as a world super-power would be to essentially combine into one unified nation. I really don't see that happening.

The US, which is roughly the size of Europe, is mostly homogeneous. If you travel 4000 miles from coast to coast, you will pass through one nation, of one language, of one history, of one culture, with only minor local differences. To do such a thing in Europe would be to travel through thousands of years of different histories, numerous different languages, with numerous different cultures.

I really can't see Europe combining under one nation any time in the near future. One would be hard pressed to have so many nations give up most of their sovereignty, vastly different cultures (and it would be required for most of the nations to ignore their hostile histories with one another)

Very true. I wouldn't want to see the huge differences in Europe disappear either, so in that sense I wouldn't like a nation of Europe.

Granted, the EU might rival the US in economic strength, but to truly be a super-power it would need a political and militaristic ability that could rival the US.

Well, I think europe can be a super power militarily, and indeed it arguably already is. But the endless squabbling over domestic issues will never cement them into a single force with a common goal.
However because of that very tunnel-visioned domestic agenda each member state tends to have, when they are united they unite loads of well-rounded armies.

I'd never like to see a United States of Europe though.

 

[testing]

How do Americans feel about a future power to rival the US? In fact already the combined GDP of the EU exceeds that of the US at 14.5 trillion USD compared to 14.25 trillion USD according to the cia world factbook. Trouble with Europe is that in the superpower sense, each states priority is their own, so the fiscal and military cooperation is much more fragmented than in the US meaning it's less of a world power.
The Euro is quickly catching up with the Dollar though as a world reserve currency.

The way I feel about this is its about #^% time someone else became a world superpower. Hasn't gotten us anything but deeper in debt and the target of a bunch of violence.

Bleah.

 

[Krumplenump]

hah, true, but that was Europes task in the colonial times. Maybe one of Americas satellites will grow to become a superpower like England's America did and ease the pressure.