According to the specialized lawyers at Cadwalader, Wickersham & Taft, the possibility of a Eurozone state withdrawing from the monetary union is slim, and expulsion near impossible.
Though Article 50 of the Treaty of the European Union allows for a member states to withdraw from the union in accordance with its constitutional requirements it is doubtful that his cover a Eurozone member and only extends to other member states.
Theoretically there are three ways a member of the Eurozone could leave the EU: negotiated exit, unilateral withdrawal and expulsion.
Even that a negotiated exit would be harmonious and smooth though it would be by no means easy as it would need negotiations of the EU treaties. Furthermore the country's new currency would likely go through devaluation and in the case of Greece would probably see defaults due to the weakness of drachma.
According to Adam Blakemore - tax partner at Cadwalader - a unilateral withdraw "would be of doubtful validity" as foreign courts would refuse to recognize any redenominations due to the infringement of the EU law".
If unilateral withdraw is unlikely, then an expulsion of a Eurozone member is practically impossible. As there are no provisions for the expulsion at the treaty it would need an amendment which in turn require a unanimous agreement, including that of the expelled state.
Richard Nevins, senior partner in restructuring at Cadwalader says that withdrawal will cause foreign investment in the state to dry up and the state's economy to plunge in chaos. Finally, the reintroduced currency will inflate versus the euro, which will increase the cost of any foreign debt that remains enforceable in the euro. Local courts are likely to honor the redenominations, foreign courts dealing with foreign law contracts, are not.
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