As the problems in Greece continue to deepen, the possibility has emerged that the country could be forced out of the Eurozone if it should fail to secure a deal for the repayment of its debts. A prominent Greek politician has suggested that if events reach a stage where this looks likely, the country could seek legal action to prevent such a forced exit.
Since the creation of the euro, no country has yet left the common currency either voluntarily or otherwise. However, in recent months Greece has been having problems with repaying the debts it was left with after high-profile bailouts. This, combined with the anti-austerity stance of the country’s current government, is leading to significant and sometimes heated talks between the Greek government and its creditors in an attempt to renegotiate the terms of the debt and secure a more manageable deal. Most recently, Greece has made it clear that it will not be able to meet its latest repayment to the International Monetary Fund – 1.5 billion euros or over £1.06 billion – by today’s deadline. As well as requiring the country to default on its payment, this puts future instalments of bailout funds at risk.
Over the weekend, talks neared the point of collapse when the Greek government rejected a potential deal. The deal in question would have seen Greece receive much-needed money, but would have required the country to introduce austerity measures. Rather than rejecting the terms of the potential deal outright, the government agreed to hold a referendum on Sunday.
A number of European leaders urged Greek voters to accept the terms, saying that voting against the deal would amount to voting against Greece retaining its place in the Eurozone. However, the situation did not look promising. The Greek public voted the current government into power on the back of its anti-austerity platform just a few months ago, and after the referendum was announced protesters took to the streets with banners urging people to reject the deal.
Regarding the prospect of a forced exit from the eurozone if it cannot meet its repayment obligations, the Greek government has said threatened a legal battle to try and hold onto its membership of the common currency. According to Yanis Varoufakis, Greece’s finance minister, “the Greek government will make use of all our legal rights.”
Varoufakis continued: “We are taking advice and will certainly consider an injunction at the European Court of Justice,” and pointed out there are no provisions made in EU treaties for a situation where a country refuses to exit the eurozone.
“Our membership is not negotiable,” he said.