Wednesday

7th Dec 2016

Dutch PM: Eurozone needs exit clause

  • Rutte - the EU shouldn't be like 'Hotel California' (Photo: NewsPhoto!)

The EU should have legal mechanisms for countries to leave the euro, says Dutch Prime Minister Mark Rutte.

In a letter released on Thursday (31 January) responding to a question in the Dutch Parliament, Rutte and his finance minister Jeroen Dijsselbloem, said that his governing coalition had agreed that "it should be possible under mutual consideration to exit from the community arrangements (Schengen, eurozone, European Union)."

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"This requires in the case of the eurozone and Schengen a treaty change as the current EU treaty does not foresee this possibility," it concluded.

The letter follows Rutte's intervention last week at the World Economic Forum in Davos, where he said that it "should be possible" for countries to leave the eurozone and indicated that certain EU policy areas should be repatriated to national governments.

"In terms of rules and legislation, it's a bit like 'Hotel California', you can check out but you can never leave," he said, adding that "you can never repatriate tasks to the national level."

The move comes a week after UK Prime Minister David Cameron gave a speech promising to renegotiate Britain's EU membership terms before holding an 'in/out' referendum.

The 2009 Lisbon Treaty introduced an exit clause into the EU treaties allowing countries to leave the bloc. Under Article 50 of the Treaty on European Union, "any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements."

A country would be allowed to leave the EU after notifying the other countries and negotiating an agreement on its relations with the Union. If a new agreement could not be reached the country would be deemed to have left the EU two years after giving its notice.

No member state has ever left the EU, although Greenland left the EEC in 1985 after holding a referendum.

Under the terms of the treaties, all EU countries barring the UK and Denmark, are required to join the euro. However, there is no legal mechanism for a country to withdraw from the eurozone, despite speculation during the height of the sovereign debt crisis that Greece and possibly other countries might be forced to leave the single currency. There is also no mechanism for leaving the Schengen agreement which allows for passport-free travel.

A number of countries have also negotiated opt-outs or exemptions from individual policy areas, and the concept of "variable geometry", where some EU countries accelerate the process of integration, has become more widely used. Enhanced co-operation, where a group of countries can decide to legislate amongst themselves, has been used twice in the past year.

All EU countries, except for Italy and Spain, signed up to the recently agreed common European patent framework, while 11 countries were recently given the go-ahead to set up a financial transactions tax.

Analysis

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