How could Greece exit the Euro legally?

 

             There is no exit in the Consolidated Treaties for countries needing to leave the Euro. There is no provision for a country to organise its own departure, and no provision for a vote of the other members to expel a member state. As the existing members in the Euro wish to remain members, that would seem to be an end to the discussion.

            However, the Consolidated  Treaties do require Euro members to conform to the convergence criteria and obligations of membership. These include tough targets for debts and deficits which many states do not meet. Those states that are far away from meeting these requirements are the most vulnerable to politcal and legal pressures from within the Union.

             In practice, when a member state is no longer able to borrow the money it needs to finance itself in the markets, it is forced into a political negotiation with the rest of the Euro area. Such a member state seeks loans from the Euro area and from the IMF. This triggers a thorough review of that member state’s economic policies, and results in both the rest of the Euro area and the IMF imposing conditions on the state in return for loans. It is at this point that the question of continued membership of the Euro should be placed on the agenda.

                The Euro states, the IMF and the troubled state should explore in their private discussions and briefings whether exit from the Euro would assist the recovery programme, and help the remaining states within the zone. If the troubled state was persuaded, the rest of the Euro area should then facilitate its temporary exit from the Euro. If the other member  states were decided that exit would be best, they could make that a condition for their loans, whatever the view of the troubled state.

                           Legally it would be best to implement a decision for a state to leave by transferring that member state to Article 139 status of an EU country with a derogation from joining the Euro. This would make the exit state technically a candidate state for membership, but would also require that state to demonstrate convergence of interest rates, inflation rates and exchange rate with the rest of the zone, and to show it can get its debt down to 60% of GDP and its annual deficit to less than 3%. These requirements would reinforce the discipline of the EU/IMF loans, but would also mean there would be no early re-entry for a troubled state, given the huge divergence of their debt, deficit and interest rates from the requirements.

                   The advantage of doing it all this way is that it should avoid legal challenge. No amendment to the Treaties would be needed. The exit state would move to a status that works for non Euro members of the EU.  The exit would result from the decision of a member state to seek loans and aid, once that state had decided it could no longer finance itself inside the Euro. That is the right time to ask whether it would  be better for that country to leave the currency. It would enable the IMF to put in a normal IMF recovery programme, with troubled state domestic monetary and currency control to assist the process. If at a later date the exit state wished to assert its wish to remain with its own currency in future, consideration could be given to allowing that state a permanent opt out like the UK.

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47 Comments

  1. Anoneumouse
    Posted February 8, 2012 at 7:44 am | Permalink

    The European Union and the EU Commission draws upon its LEGAL BASIS on budgetary maters from Article 268 to 280 of the EC Treaty. As the European Union has not performed or been in legal compliance for 17 years Greece could now withdraw from the European Union using the provision of Article 61 of the Vienna Convention on the Law of Treaties

    Article 61 Supervening impossibility of performance

    A party may invoke the impossibility of performing a treaty as a ground for terminating or withdrawing from it if the impossibility results from the permanent disappearance or destruction of an object indispensable for the execution of the treaty. If the impossibility is temporary, it may be invoked only as a ground for suspending the operation of the treaty.

    17 years of non compliance feels fairly permanent to me.

    • APL
      Posted February 8, 2012 at 8:57 am | Permalink

      Anoneumouse: “17 years of non compliance feels fairly permanent to me.”

      And of course if Greece has been unable to conply with the terms of the treaty we signed jointly with them and all the other treating countries, we too (the UK) have no need to feel obligated to the terms of the treaties either.

      The EU: smoke, mirrors and a treacherous Political class.

  2. Tony E
    Posted February 8, 2012 at 7:55 am | Permalink

    If Greece were to leave the Euro, what would be the fate of Greek companies whose debts are priced in Euros?

    Their currency reserves would be transferred to Drachma, which would certainly then depreciate, and currency controls would also be likely to ensure that no Euros could be taken abroad for safekeeping. Also, their products and assets would be priced in Drachma.

    With the entire point of leaving being to allow depreciation, how would they remain solvent?

    Reply: Greek companies owing money to GReek banks would have their debts redenominated in drachmas

    • Captain Crunch
      Posted February 8, 2012 at 11:22 am | Permalink

      But the Greek Government debt to British and German pension funds would still be denominated in Euros. As the New Drachma collapses in value, their debt would spiral upwards. The creditors (us?) would be even less likely to be paid.

      Reply: That would depend on the decision about the denomination of the state debts.Given the situaiton we are talking about partial default anyway, so in a way it does not matter much whether it happens via conversion into drahcma or through partial write down of repayments in euros.

    • Tony E
      Posted February 8, 2012 at 1:22 pm | Permalink

      Yes, but is that the reality of how things are inside the Eurozone? Wasn’t the point on currency union that financial services would no longer be purely domestic?

      Do Greek companies rely on mainly Greek domiciled banks for credit, or do they go to the whole European/ Euro market for credit?

  3. lifelogic
    Posted February 8, 2012 at 7:59 am | Permalink

    What an absurd mess, legal structure and subversion of democracy the EU has created. I assume the Shirley William types, the Blairs, Browns, and Majors of this world are proud of it. A “legal” solution needs to be found for all the breakups and devaluations needed. The EU is usually quite good at ignoring or finding ways round the law when it suits them.

  4. Iain Gill
    Posted February 8, 2012 at 8:27 am | Permalink

    what about people carrying around wads of euro notes, some issued in belgium, some german, some french, and some greek? if the greek ones get suddenly devalued isnt that going to shake up any decent citizen anywhere and their trust in the euro as a currency?
    i understand many folk are already transferring their greek bank balances to banks in other countries, this must be putting strains on the system too?
    i’d be interested in your views on what ordinary citizens can expect with various interactions with Greek currency?

    Reply: greek holders of euros would have to switch them into drachmas at a specified rate. Non GReek holders of euros stay with euros.

    • Iain Gill
      Posted February 8, 2012 at 9:58 am | Permalink

      cannot help feeling its going to be more complex than that. so many greek nationals living elsewhere and/or with banking outside of greece. so many non greek nationals living in or banking in greece. and so on.

    • Alan
      Posted February 8, 2012 at 10:29 am | Permalink

      As I understand it all euro notes are claims against the European Central Bank, not against the country where they are printed. They can’t lose their value by one country defaulting.

      I doubt whether the Greek government would force people to convert their euro notes, or euro bank accounts, into a Greek currency.

      Don’t forget that if you had put your money in euros into a Greek bank before this crisis started you would be richer now than if you had put it in sterling into a UK bank. So far the euro has been a stable currency that has held its value reasonably well compared to sterling, and it could continue to do this. (That’s not a bad thing for the UK as a whole: we have been deliberately devaluing sterling to help our economy grow and to reduce our debts to foreigners.)

      Reply: The devaluation cannot work unless Greeks are required to switch euros into drachmas.

      • Alan
        Posted February 8, 2012 at 5:16 pm | Permalink

        I don’t think it is necessary to seize people’s savings in order for devaluation to work: when the UK devalued, for example, it did not seize the assets of those who were wise enough to hold savings in euros or dollars.

    • Bob
      Posted February 8, 2012 at 10:33 am | Permalink

      What if you are a Greek who is owed Euros by a non-Greek?
      Is the loan automatically converted to Drachma?
      Or will it be converted upon repayment?
      Will Greeks be allowed to use Euros is they are held for paying Euro based costs?

      Reply: There are a range of issues re contracts and assets that have to be decided and determined. There will be winners and losers however these issues are decided.

      • Iain Gill
        Posted February 8, 2012 at 5:05 pm | Permalink

        Can we be winners this time for a change then?

  5. zorro
    Posted February 8, 2012 at 8:45 am | Permalink

    But once they’ve joined the Euro, where is the legal mechanism to force them into Article 139 status? Would that not require unanimity, and what if the Greek politicians don’t agree, and stick it out in the hope that the EU will be forced to push money their way?

    zorro

    Reply: Yes, it would be best to have a unanimous vote. It would be the price of further funding for Greece.

    • zorro
      Posted February 8, 2012 at 8:49 am | Permalink

      To be honest, I think that the EU will find it difficult to enforce its moral (sic) authority with the euro entry conditions bearing in mind that they let Greece in knowing that they did not comply with the conditions, and France and Germany have also ignored the conditions for their own benefit on occasions.

      zorro

  6. javelin
    Posted February 8, 2012 at 8:46 am | Permalink

    So if Greece puts itself back into “Article 139” (i.e. 60% debt/GDP ratio) then surely this means that **ALL** the other states need to go back to Article 139 as well. It would be a farce if Greece needed a 60% ration when even Germnay cannot manage it.

    Even if the state of being in imminent catastrophy dies away that doesn’t mean that the general standard of living will get better. In fact to move away from disaster the EU must move towards falling standards of living.

    ** The EU must swap the risk of acute failure for the reality of chronic failure to survive **

  7. Nick
    Posted February 8, 2012 at 8:54 am | Permalink

    Step 1. Greek banks move their domicile to Frankfurt. (Or other Eurozone area)

    Step 2. Greek government defaults.

  8. javelin
    Posted February 8, 2012 at 9:15 am | Permalink

    I think form a political perspective what interesting is seeing how LEFT wing Greece is. Remember if youre not paying taxes how nice it is to receive a state hand out !!

    Also how the bulk of the population has shifted further to the left as a consequence.

    Socialist PASOK 8% (from 40% at the election)
    Communist Party (KKE) 12.5 (unchanged)
    Coalition of the Radical Left (SYRIZA) 12% (unchanged)
    Democratic Left 18% (up from 12% last month)
    Right wing Popular Orthodox Rally (LAOS) 8% (down from 5%)
    Far Right – Golden Dawn – 3% (and eligible for Parliament)

  9. Disaffected
    Posted February 8, 2012 at 9:32 am | Permalink

    Does it matter? Whether legal or not if the country was determined to leave it would. The EU coup detat of Greece put in place its own Government for Greece, therefore it will be odd if they voted to leave the EU.

    John,
    Is Clegg trying to sneak out reforms about the House of Lords? He did the same with the Right to Recall MPs after his inappropriate outburst on the veto that never was. All though some think this is all a show to demonstrate differences between him and cast iron U turn.

    reply: There will be plenty of time to talk about his wish to reform the Lords – and plenty of Parliamentary ping pong, as the Lords have their own strong views on all this!

  10. Brian Tomkinson
    Posted February 8, 2012 at 9:32 am | Permalink

    The so-called EU elite have created a Frankenstein monster in order to achieve by lies and deception the creation of a country called Europe or a United States of Europe – call it what you like. The idea of this was, we are told, to end wars and conflict in Europe. The removal of democracy from the people in the individual member countries was regarded as either irrelevant or a necessary price to pay for acievement of the dream. It always seemed inevitable that at some time this form of European fascism would result in insurrection and the “dream” would be seen for what it really is – a “nightmare”. Those polticians here and in the EU who are so exercised about the insurrection in Syria should look nearer to home when they are encouraging the overthrow of the Syrian regime – it may be their turn next if they carry on riding roughshod over the wishes of the people in the EU. The EU is not just undemocratic it is anti-democratic. The situation in Greece could have been dealt with years ago if it had not conflicted with their dogma.

    • uanime5
      Posted February 8, 2012 at 6:03 pm | Permalink

      The situation in Greece wouldn’t have occurred if the Greeks had managed their economy better.

  11. backofanenvelope
    Posted February 8, 2012 at 10:04 am | Permalink

    As usual Mr Redwood, you lay out before us a sane and sensible policy. The trouble is that sanity and common sense are in short supply. Especially amongst the people running the EU, who are, in the main, the same people that created the current shambles.

    I find it rather ironic that the Greeks are in the front line of democracy, given that they gave us the idea in the first place. I wonder what I would do if I were in their position. My pension slashed, prices sky high, and my electricity bill (due in a couple of days) comes with a hefty surcharge. Would I pay up or would I default?

    • Alan
      Posted February 8, 2012 at 5:28 pm | Permalink

      I don’t think it was the people running the EU who caused the problem. It was the terribly clever, highly paid, people in the banks, who made loans to countries and companies that could not repay. When this went wrong (largely because of errors made by US and UK bankers) the bankers said to the governments that they would ruin the financial system unless they were given money by the taxpayers.

      This the governments agreed to do, then discovered that in some cases they too did not have enough money. The governments then went to the EU (and the ECB) and said they had to think of a way out.

      The EU may not be doing very well in solving the problem, but it is a bit much to say they caused it.

      • Bob
        Posted February 8, 2012 at 7:13 pm | Permalink

        Hold on a moment, surely the Greek government knew they couldn’t run a deficit indefinitely?

        If they didn’t, then surely the head of the ECB should have told them?

        I hope our government moderate their high spending habits before we get ourselves into a similar mess.

        I hope George Osborne reads this blog.

        • Alan
          Posted February 9, 2012 at 1:55 pm | Permalink

          I don’t suppose George Osborne does read this blog, but I’ll bet he’s got someone that reads it for him and sends him the best bits, so if you have any good ideas you should certainly send them in.

  12. A different Simon
    Posted February 8, 2012 at 10:11 am | Permalink

    As soon as a Govt starts to borrow money it will need to roll over , it derelicts responsibility for policy into the hands of the lender .

    You would think that everything which has happened would be lesson enough for Governments but even if this is eventually sorted out , they will revert to their ruinous ways of becoming beholden to their mates in finance .

  13. Alan
    Posted February 8, 2012 at 10:18 am | Permalink

    I rather doubt that Greece will leave the euro, but I can see that discussing the topic has a fascination for eurosceptics, and stranger things have already happened so maybe the discussion is not a complete waste of time.

    As I understand it changing the currency would not alter the fact that Greece is in debt, and that the debts are denominated in euros. The debts can’t be changed to a new currency except by agreement with the lenders or by default.

    It seems to me most unlikely that euro bank notes and euro current accounts would be seized and forcibly converted to a new currency by the Greek government. They are all claims against the European Central Bank which will honour them whether they are held or printed in Greece or elsewhere. And what would be the point?

    In fact why bother leaving the euro? The Greek government could just issue another currency to run in parallel with the euro, and pay all its internal debts, including wages, benefits, and pensions using that currency, and insist that all Greeks pay their taxes in this new currency. It could require all businesses operating within Greece to accept the new currency as payment for bills and to use it for the payment of wages. Then the new currency could be devalued against the euro, so that all wages, benefits, and pensions would lose value and Greek products and services would be cheaper for foreigners, which is the desired result. Sir John Major raised the idea of something similar when the UK was considering joining the euro, and it maybe deserved more consideration than it received at the time.

    But actually I think Greece will stay in the euro and either default or restructure its loans, sell what assets it can, receive further cash from Germany and the European Central Bank and others to keep it going, until eventually austerity lowers Greek wages, benefits, and pensions to a competitive level. The Eurozone seems at the moment to be more interested in long term re-balancing of its economy than in short term solutions. As the short term difficulties mount this emphasis will probably change.

    • Tedgo
      Posted February 8, 2012 at 5:24 pm | Permalink

      I am inclined to agree with you. Converting accounts and loans based on nationality to Drachmas would be impractical. Any plan to introduce a new currency has to be openly published so that legislation and other measures can be put in place several months in advance.

      One should not forget that it is the Greek Government and State that is in dept, the people themselves are not necessarily so. Any plan must aim to maintain existing private and business wealth to avoid runs on banks and capital flight, though I think the latter has already happened.

      My plan for Greece, would be;

      1) Introduce the new Drachma initially with parity to the Euro. Government bonds and the like would be converted to Drachma immediately.

      Converting all bonds to Drachmas is to encourage the markets to consider their actions, if they force the Drachma down too much then they will take a bigger haircut.

      In the short term Government borrowing requirements would be met with freshly printed Drachmas.

      2) All existing private and business bank accounts etc, would remain Euro accounts. The only condition would be that these accounts would be able to take and give Drachmas at the current prevailing exchange rate, there would be no separate buy and sell rates and no commission.

      This is to avoid a run on the banks and does not destroy existing private and business wealth. A business with a million Euro’s in an account, in readiness to pay for materials and services recently supplied to them, will still need a million after D day.

      Banks needing support on this aspect would be supplied with freshly printed Drachmas.

      3) Banks would offer Drachma accounts, with the same provision as the Euro accounts on currency transactions.

      4) All government employees and state benefits would be paid out in Drachmas. This might seem unfair, but will encourage employees to move to the private sector.

      5) All financial legislation, such as income tax allowances etc, would be changed to Drachmas.

      6) All new government contracts would be in Drachmas. Old ones would remain in Euros though renegotiation would be encouraged.

      7) Both Drachma and Euros would be legal tender. Ultimately real Euro notes in circulation would dry up, if only through wear and tear.

      8 ) All existing private and business loans and contracts would remain in Euros. This would encourage interested parties to renegotiate. On future loans and contracts businesses would be left to choose for themselves as appropriate.

      9) Businesses would be free to pay employees in Euros or Drachmas.

      This plan would take a bit longer to improve the Greece’s competitiveness but it would be less destructive.

    • Denis Cooper
      Posted February 8, 2012 at 5:57 pm | Permalink

      For the government to “insist that all Greeks pay their taxes in this new currency”, especially, but also to “require all businesses operating within Greece to accept the new currency as payment for bills and to use it for the payment of wages”, the new currency would have to be given legal tender status; but while Greece is in the euro under the present treaties there’s only one legal tender allowed, and that’s the euro.

      Article 128 TFEU, reiterated in Article 16 of the ECB Statute.

      Reply: Which is why i propose they change status under the Treaties so they can legally use another currency.

      • Alan
        Posted February 9, 2012 at 2:02 pm | Permalink

        Thanks, I didn’t know that. I’ll get round it by saying that my new currency would not be legal tender, it’s just that the Greek government would accept it in payment of its bills. Those who wanted to pay in euros could do so.

        You leave me in a problem when it comes to whether the Greek government could force those it pays to accept another currency and require businesses to accept it in their own transactions. I’ll get my lawyer…

  14. javelin
    Posted February 8, 2012 at 10:34 am | Permalink

    Let’s understand how BUSTED Greece is – the negotiations all assumed a 8.9% increase in tax revenues – actually there was a 7% fall. VAT fell 18.7% too – IN January YOY.

    “Revenues posted a 7 percent decline compared with January 2011, while the target that had been set in the budget provided for an 8.9 percent annual increase. Worse still, value-added tax receipts posted an 18.7 percent decrease last month from January 2011”

    http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_25206_07/02/2012_426623

    If you’re expecting growth in Greece forget it – only 40% of people have used the internet. They are good at putting sun loungers out, but everybody is going to Turkey because its cheaper.

    Don’t being to think that Italy is going to be any better. They have a lower tax take than Greece, less tourism and the Chinese have taken all their jobs.

  15. Neil Craig
    Posted February 8, 2012 at 11:04 am | Permalink

    I think that rather then legal the main problem for Greece may be a practical one. If the greek government cannot legally prevent people carrying euros in Greece & I assume they can’t thenlots of people will continue to do so. In the way that that peoples in the eastern european countries liked to deal in dollars but with no state apparatus to prevent it and millions of tourists carrying it.

    On the other hand in a purely libertarian way it would be rather good & insgtructive for the country if the people in the productive part of the economy were being paid in Euros while government employees were getting the same numbers of “new drachmas”.

  16. oldtimer
    Posted February 8, 2012 at 11:26 am | Permalink

    You describe a mechanism that conceivably could result in a transition to a new drachma.
    That leaves the other question I asked yesterday. What if the Greeks stay with the euro and default on their sovereign debts? What then? That sounds to me like a recipe for a very disorderly default with unknown consequences for the EZ and EU. Is this the Greek nuclear option?

  17. startledcod
    Posted February 8, 2012 at 12:03 pm | Permalink

    Near as dammit: nail – hammer – head – on – hit.

  18. Denis Cooper
    Posted February 8, 2012 at 12:08 pm | Permalink

    As an aside, the Telegraph reports:

    “German Chancellor Angela Merkel also told a Greek student at a meeting with young people in a Berlin museum:

    “I will have no part in forcing Greece out of the euro.””

    But then on March 1st 2010 she said just as emphatically:

    http://www.dw.de/dw/article/0,,5299788,00.html

    “We have a treaty under which there is no possibility of paying to bailout states in difficulty.”

    and it was just over two months before she decided that there was such a possibility after all.

    So on that timescale, she’ll get Greece forced out of the euro in mid-April, and even if she has no overt part in doing that.

  19. sm
    Posted February 8, 2012 at 3:12 pm | Permalink

    Would this approach work for other countries and keep the EU intact to allow them another go in the future at monetary union before political union. I am sure its a backup, but why not blow the ‘ever closer union’ into touch and replace with friendly co-operation and no sub fees.

  20. Denis Cooper
    Posted February 8, 2012 at 3:56 pm | Permalink

    Article 139 TFEU is the first article in:

    “CHAPTER 5

    TRANSITIONAL PROVISIONS”

    starting on page 107 here:

    http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0047:0200:EN:PDF

    The Article starts:

    “1. Member States in respect of which the Council has not decided that they fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as “Member States with a derogation”.”

    Then, naturally enough, there comes Article 140, starting on page 108, which lays down the steps for a country with a derogation to finally join the euro, and the high point of that is:

    “2. After consulting the European Parliament and after discussion in the European Council, the Council shall, on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and abrogate the derogations of the Member States concerned.”

    Nowhere in the treaties is there any procedure for a country’s derogation to be restored once it has been abrogated; as you say:

    “There is no exit in the Consolidated Treaties for countries needing to leave the Euro”.

    So while a decision to put a country back into “Article 139 status” could be taken, it could certainly not be taken in conformity with the present EU treaties but only through an ad hoc intergovermental agreement which breached the present treaties.

    Therefore it can’t be true that:

    “No amendment to the Treaties would be needed”;

    the question would be whether the necessary EU treaty change was made before the occasion arose, so that a legal exit route was already available, or the necessary EU treaty change was made afterwards to retroactively legitimise a decision which had been taken in breach of the treaties as they stood at that time.

    It seems to me that making sure something is legal BEFORE it is done will always be preferable to having to change the law retroactively to make it legal AFTER it has been done, but we’re talking about the EU here and the second approach is quite often that which is adopted.

  21. Thomas E
    Posted February 8, 2012 at 4:14 pm | Permalink

    Are capital controls legal under european laws? I would have thought not, personally. If they are illegal how could you possible enforce any conversion into neodrachma? Especially given the fact it is readily apparent that there is a massive bank run already going on with greek banks (and has been for over six months).

  22. Electro-Kevin
    Posted February 8, 2012 at 4:27 pm | Permalink

    The original question poses the idea that Greece could exit the Euro illegally.

  23. Barbara Stevens
    Posted February 8, 2012 at 6:02 pm | Permalink

    I’ve just watched a video from UKIP, where it suggests it’s critera for the UK to leave the EU if they were to gain power. Its interesting watching. Firstly, we the people would decide via a referendum, and if we said yes, then the PM would formally send notification and the date for this state to leave the EU. It can be done, whatever politicians tell one, it’s easy, straight forward and precise, and this film gives us that knowledge. We have in effect been brainwashed into believing we cannot leave, we can if we so wish. I’m afraid that if many people watch this film they will vote UKIP, mostly for the reason it’s been maded; the detriment of the Conservative party.
    If the Conservatives had thought of doing the same thing, and keeping any promises made they would have total majority at the next election. They are fools not to do so. They know only to well, seeing the saga from Greece, the cost to this country, that the EU is doomed and not working as promised. It is an expensive exercise which taxpayers here are paying the price for. The film shows a sensible exit, taken over two years, with out contribution decreasing over this time, it makes an orderly removal from the EU and a way that is suitable for all. It could also be one way for Greece to exit properly.
    It will eventually leave, that’s obvious, and others will follow suit, as they will be stifled by the laws, regulations, and millstone round their necks. We have half the millstone and we are suffering, just imagine the weight their millstone must be?
    Mr Redwood you offer good suggestions on Greece and what it should or try to do, but millstones have a habit of pulling you down, and Greece’s millstone is pulling and harder to fight off. May I suggest all try and see the U-tube film called ‘I day’, its revealing and makes sense.

    Reply: Most Conservatives agree the UK can leave the EU if the people vote to do come out. That is not the issue. The issues are 1. How do we get a vote given the large majority in Parliament against 2.If the public did vote to come out – which looks unlikely given the polling – what trade and other arranegements would the UK negotiate with the EU? Even UKIP agrees we want to carry on trading with them, and would need bilateral agreements on air traffic control, pollution of common seas, rail and ferry links and a host of other issues. The large majority of UK voters want a common market, but they want a lot less common government than they are being served up. THe issue is how we create sufficient political pressue to get the new relationship with the EU that many of us want. It’s no good just saying an In/Out referendum will settle it, when there is no way at the moment to secure one, and no guarantee it would give you what you want.

    • Steven Whitfield
      Posted February 9, 2012 at 7:28 pm | Permalink

      Mr Redwood, surely lending your support to the Peoples Pledge would be a step in the right direction.

      http://www.peoplespledge.org/

      Reply: The People’s pledge is to pressurise MPs into supporting a referendum. I am an MP and I do support a referendum!

      • Steven Whitfield
        Posted February 9, 2012 at 9:06 pm | Permalink

        Thank you for your reply Mr Redwood. I accept that you are a supporter of the referendum but would you consider making your support more visible by adding your name to the list of Mp’s that have signed the pledge. Forgive me if you have already done this.

        http://www.peoplespledge.org/about_us/mps_that_have_signed_the_pledge

        Happy for my name to be counted as one who wants a referendum, but there is no point in me trying to pressurise my MP, as I am alreadfy a supporter!

  24. Anoneumouse
    Posted February 8, 2012 at 8:39 pm | Permalink

    Euro banknotes to avoid by country of issue code

    Example: code number on a Greek 50 Euro note; Y05189191934

    Cyprus G
    Greece Y
    Italy S
    Malta F
    Ireland T
    Spain V
    Portugal M
    France U

    • Alan
      Posted February 9, 2012 at 2:21 pm | Permalink

      Where they are issued has no effect on their value, although you should be particularly wary of those beginning with J.

      (J is the code for United Kingdom euro notes).

  25. Andrew Smith
    Posted February 8, 2012 at 9:47 pm | Permalink

    Why are we spending time working out how Greece could legally leave the Euro?

    The EU does not usually worry about legality and if Greece decided to leave, or the others simply refused to pay for its bond redemptions, then politics takes over.

    To try to apply legalistic rules to member states cannot ultimately work unless force is to be used. While it is applied in a civilised manner most of the time it is only force (or the threat of it) that ensures the power of law within nations.

    Let Greece work out its own destiny and it is bound to leave the Euro and the EU. By helping the EU to continue putting off a major bust up we are doing ourselves and any friends in the EZ17 we may still have a serious disservice. Just as the Tory party should have broken up over Maastricht, so the EU needs to break up now; let those with common interests stick together if they can bear each other’s company, and the rest leave and carry on with their lives in peace.

  26. David Langley
    Posted February 9, 2012 at 11:46 am | Permalink

    John, What is the scenario should the UK decide to kick all the ECHR judgements and other directives into touch that don’t suit us. Do we get fined or kicked out, what then if we fail to pay our fines and contributions as our fine to the EU say? Is there any EU Sheriff to constrain on our goods, does the EU have any actual powers at all to punish transgressors, what have we got ourselves into?

    Reply: If the UK wished it could pull out of the ECHR arrangement. For the time being the UK is trying to reform it from within, by proposing an end to individual cases going before the Court to avoid the kind of problems we have seen recently. If this proves non negotiable the government will need to tell us how far it is willing to go to sort this out. This is a non EU Treaty arrangement which we could rescind.
    If the UK no longer wishes to accept the powers of the European Court of Justice (the EU court) then it would have to repeal or amend the 1972 European Communities Act and pull out of membership or renegotiate its membership of the EU.
    I do not think in either case they would send an army to enforce!

  27. Anne Palmer
    Posted February 10, 2012 at 10:26 pm | Permalink

    You ask, “How could Greece exit the Euro legally?” I ask, “How can Greece remain in the Euro illegally?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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