Thursday

22nd Aug 2019

EU states seek advice on Greece exit scenarios

The European Commission on Tuesday (12 June) confirmed it is giving legal advice on possible capital controls and border checks should Greece leave the eurozone.

"We are the guardians of the EU treaty and we provide info to whomever asks what is possible under European law to cover these scenarios. This doesn't mean we are preparing a particular plan," commission spokesman Olivier Bailly said during a press conference.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Public safety may be a reason for capital controls and border checks in Greece (Photo: Contact)

He was asked whether the commission - as part of the so-called Eurogroup Working Group, comprising eurozone finance ministry officials - is aware of contingency plans being discussed.

"I have not said I am not aware of discussions, but that I was not aware of plans. Some people are working on scenarios, we are providing information on EU law."

Reuters on Monday quoted unnamed officials saying such plans could put limits on cash withdrawals from Greek subsidiaries and reintroduce border controls to prevent large numbers of Greek citizens leaving their country.

"Our role is to say what is possible under EU law, not to draw up scenarios. We are not scriptwriters for disaster movies," Bailly said, adding that the commission's sole concern is to keep Greece in the eurozone.

The spokesman confirmed that capital controls were possible under article 65 of the Lisbon Treaty, but only for reasons of "public order and public security."

Citing EU jurisprudence, Bailly noted that "economic security" cannot be invoked to trigger such a mechanism.

The same is valid for border checks. Member states are allowed to re-introduce temporary controls only in case of threats to public order and security - ranging from terrorism attacks to large football events.

According to Reuters, the Greek contingency plans were discussed in conference calls over the past six weeks.

They reflect growing concerns in the eurozone that the radical left Syriza party will win the elections on Sunday and carry out its promise to cancel the second bail-out, de facto forcing Greece out of the common currency.

Switzerland last month also said it is considering capital controls if the eurozone were to "collapse." "We're preparing ourselves for turbulent times," Thomas Jordan, head of the Swiss central bank told SonntagsZeitung in a recent interview.

A special taskforce has been set up to look at various scenarios, one of which would be controls on foreign capital entering Switzerland.

Meanwhile, a spokesman for the Austrian finance ministry told this website he could not confirm any eurozone contingency plans.

"As far as capital flight is concerned, it is true that there has been a continuous, slow drain of capital out of Greece during the last couple of years. However, the situation has been stable for some time now," spokesman Harald Waiglein said.

Euro fears rise as Greeks withdraw money from banks

Greeks have withdrawn billions of euros from their banks in recent days, with the country's president warning of "panic" at the prospect of the country leaving the eurozone. Markets are equally jittery, pushing Spain closer to a bail-out.

Opinion

Greece has bought itself only a little more time

The Greek people bought themselves a bit more time at the weekend. But we are still kicking the now infamous can a little further down the road, writes Martin Callanan.

Agenda

Greek election aftermath to dominate this WEEK

With Greek voters having given a majority to pro-bailout parties on Sunday, the EU's immediate agenda is likely to centre on offering some sort of sweetner to any future coalition government.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Open Arms may face fine in Spain 
  2. Belgium's EU commission hopeful in free press row
  3. Conte turns on Salvini, as Italy prepares for change
  4. Nordic-German climate action signals broader alliance
  5. The EU committee's great 'per diem' charade
  6. Spain calls for legal action against Italy on migrants
  7. Trump to meet Greenland leader in Denmark
  8. Irish border plan is 'anti-democratic', Johnson tells EU

Join EUobserver

Support quality EU news

Join us