Paradise Lost: Can the European Union Expel Countries from the Eurozone?
There was a time, not too long ago, when the introduction of the euro was hailed as a tremendous success. Yet the Eurozone now faces an existential crisis. A number of member states have, since 2008, been prevented from defaulting on their sovereign debt only by massive bailouts. Greece has teetered on the verge of insolvency for years despite repeated such measures.
Many observers now believe that Greece should stay in the European Union but leave the Eurozone, a scenario often referred to as the “Grexit.” This would allow Greece to devalue its currency and thereby render its economy more competitive. But just as crucially, from the perspective of Greece’s sharpest critics, a Grexit would rid the Eurozone of a member state that may no longer be willing to abide by the Eurozone’s austerity- oriented economic policies, which aim at limiting budget deficits and government debt even in times of economic distress. The current Greek government is adamantly opposed to leaving the Eurozone, but this has not put an end to the debate. Rather, a growing chorus of politicians and pundits now argue that Greece should be expelled from the Eurozone.
Of course, this demand raises a fundamental legal question: Is it possible—and should it be—to terminate a country’s membership in the Eurozone without that country’s consent? This Article argues that in narrowly defined circumstances, a right to expel countries from the Eurozone not only is desirable as a matter of legal policy but also deserves recognition as a matter of black letter law. However, this Article also shows that such an expulsion has to remain an ultima ratio. As of now, Greece does not even come close to satisfying its conditions.