There are many excellent reasons, both economic and political, for European leaders to want to keep Greece in the eurozone. But if Greece and its creditors fail to reach a deal on a new assistance package this weekend, it will be hard to avoid a Grexit. The question is, how can that be managed with the least risk to the stability of the eurozone and the EU itself? Can a country legally leave, or be forced out of, the euro? The only obvious way is by withdrawing from the EU altogether. Neither Greece nor its European partners want this to happen. So EU lawyers are working against the clock trying to find a creative way to accommodate a Grexit if it becomes inevitable. This insight identifies five possibilities. None of these options are desirable. Some are barely legal. But if all else fails, one of them may have to be chosen.
A Greek departure from the eurozone would be undesirable. It would maximise economic and geopolitical risks to both the EU and the currency union. But if an agreement is not found by the end of the emergency European Council meeting on Sunday July 12th, the EU could find itself in the unprecedented situation of having to manage a ‘Grexit’ (a Greek exit from the euro). In this case, whether Greece decides to leave voluntarily or the creditors choose to force the country out, EU lawyers will need to work out a solution to a seemingly unsolvable issue: nothing in the EU treaties allows for a country to leave the eurozone.