GREXIT: A Preliminary Review of the Legal Literature on Withdrawal from the Eurozone

Following the inconclusive results of the Greek election on May 6th 2012, talk of a Greek exit from the Eurozone (known as Grexit in the financial press) has dominated international media. A lot of discussion however by policy makers, political and economic commentators in Greece and internationally ignores the legal realities of an exit from the Eurozone. This short paper offers the results of a preliminary literature review on the issue of withdrawal from a legal perspective. It is hoped that this will offer some context to debates as to the feasibility of a Greek exit. The analysis here suggests that the legal framework shows no obvious route out of the Eurozone. The only technically secure way to leave the Eurozone seems to be via unanimous agreement to Treaty changes at EU level, something logistically and politically challenging. The Greeks cannot choose to leave unilaterally, nor can their partners choose to expel them from the Eurozone. For Greece to leave, both the Greeks and their partners need to wish to terminate the relationship. Even then the legal and institutional barriers to exit remain significant.