
Any country leaving euro zone must settle bill first: ECB's Draghi - cinquemb
http://www.reuters.com/article/us-ecb-eurozone-idUSKBN1542KL
======
abduhl
My understanding of how withdrawal from the EU works is that a country's
withdrawal occurs 2 years after they invoke the Article 50 process regardless
of whether a final agreement has been made with the EU. Is this not correct?
If it is correct, how can the ECB make this statement without it essentially
being a threat of war?

Edit - many below have noted that leaving the Eurozone and leaving the EU are
distinctly different. I disagree. As I understand the EU charter, there is
currently no way to leave the Eurozone without also leaving the Union. From
Wikipedia, this is actually the exact position that Draghi espouses:

"Regarding your question on withdrawing from the euro without leaving the EU,
this possibility is not foreseen in the Treaties. The Treaty of Lisbon does
not include this possibility, precisely because of the irreversibility of the
move to the third stage of EMU for Member States."

[http://www.ecb.europa.eu/pub/pdf/other/20121107_morganti.en....](http://www.ecb.europa.eu/pub/pdf/other/20121107_morganti.en.pdf)

~~~
cperciva
I'm reading "must" as meaning "or else we'll declare that you've defaulted on
your loans". It's unlikely that Germany would invade Italy or Greece in order
to seek loan repayments, but it's quite likely that such a declaration would
be ruinous for their economies.

~~~
abduhl
The economies of these countries have already been ruined by ECB policies -
that is why they are (and have been) discussing leaving the EU. Britain is the
first of many, in my opinion, and their economy was strong relative to others
in the EU who are being screwed.

It appears to me that the EU is finally learning what the USA learned long
ago: economic policy _is_ sovereignty. If you cannot control your own economy
then you are subordinate to who can: the states are subordinate to the federal
government just like the lesser EU countries (Greece, Italy) are subordinate
to France and Germany.

~~~
jimnotgym
Leaving the Euro zone has nothing to do with leaving the EU. Italy and Greece
have borrowed too much money from Germany and want a way out of it. At the
moment the EU seem rather keen to stay together against Britain and against a
hostile sounding US president

~~~
candiodari
You do realize the US was the driving force behind the creation and cohesion
of the EU ?

It seems to me that lack of US support might turn out to be very, very bad for
cohesion in the EU rather than good.

~~~
pikzen
No. The money might have been from the US. But the creation of the CEE, then
later the EU was born of the will of European leaders. Martin Schultz had
listened to the US but they weren't _the_ driving force.

------
Mikeb85
I'm curious how he figures a nation leaving the Eurozone would be 'required'
to pay off their debts first. Wouldn't the debts just carry over anyway?

It's not like a country leaving would necessarily default on their loans, just
like staying in the Eurozone doesn't ensure timely payment of loans.

Good luck enforcing this, especially when multiple countries vote for
nationalist governments...

~~~
toomuchtodo
Its actually pretty easy to enforce if you still need a trade partner. We'll
just embargo your goods at the dock and charge you daily storage fees. (We as
in countries exacting their pound of flesh).

If you don't want an activity to occur, you must disincentivize it
financially.

~~~
Mikeb85
And how do you ensure compliance when half the Eurozone wants to exit? Yes,
you can exact revenge against one rogue member, but several at the same time?

Not to mention, ruining their economy also ensures you won't get paid. Will
private creditors stand for that?

~~~
toomuchtodo
Have you not seen the negative financial consequences Britain has experienced
from Brexit? Their currency has lost its strength and companies are looking at
moving out. It's not all sugar plum fairies and nationalism.

~~~
laughfactory
Wow, that's quite the personal attack there. One of the things we learn in
Economics is short run versus long run. Yes, Brexit is causing and will
continue to cause a great deal of short run pain for Britain, but in the long
run I believe it will prove to be the better choice. The problem is that we
all want things to be great and pain-free in the short run, and in the long
run. But almost by definition that isn't possible. There are always trade-
offs. If you over consume today on credit, you will be paying a future premium
for the short run easy living.

The point is, attacking someone personally, for their opinion that the long
run gain will outweigh the short run pain of Brexit makes you look less
informed, and more like someone who (without critical thought) believes the
media propaganda: which focuses exclusively on the short run pain of Brexit.

Read up.

------
rokosbasilisk
It seems like they are preparing for more exits, the world has changed a lot
in one year.

~~~
cm2187
I think the big question is the Italian elections of 2018. I understand the 5*
movment is already pretty much the strongest political party. If they take
over the parliament, this may mean the exit of the EU or euro. The Netherlands
are probably close too, with elections in March this year, though I understand
Wilders is unlikely to have enough seats to take power. Le Pen in France is
unlikely to make its break through at the elections this year, but it is not
inconcievable in 5 years.

I am of the opinion that the days of the EU are numbered. High unemployment,
slow growth, combined with African & Middle-East immigration and Muslim
fundamentalism are going to put increasing pressure on traditional social-
democrat parties, and with this a general momentum (Brexit, Trump). It may be
that the UK might enjoy the status or independant safe heaven when it all
happens and investors run to the door and that Brexit turns out to be a
blessing in disguise.

~~~
alva
Extremely interesting times indeed. Massive political changes will always
involve a certain amount of pain, but I believe the writing has been on the
wall since 2008 and from political actions taken since.

The problem as I see it, is that the EU is trying to stop the tide. I believe
this will fail due to the sheer amount of frustration felt by many of the
populations who have not necessarily received or appreciated the globalisation
as it has been implemented so far.

Unfortunately for the EU, the only changes that could save itself are
antithetical to its hardcore believers and leaders who are in charge. Those
who are looking to turn Europe into essentially one country (sounds crazy, but
that has been the long and relatively successful game from the beginning),
will not budge on a few key issues which are vital to their end game. The
David Cameron negotiation was an example of this. If the EU had dropped
Freedom of Movement, UK would have almost certainly remained.

Ideology vs pragmatism. Old story.

~~~
cm2187
Rather, the EU is in a deadlock. It is stuck with a partial integration. The
only solution that would save it, i.e. complete the integration and make it a
federal government, is now impossible in the current political climate. So it
is left being a collection of laws and treaties with no clear leadership and
direction of travel, and therefore will keep accumulating grievances without
being able to do anything about them.

~~~
alva
Yes I think you are right about their current situation.

The federal goal however is never what the people of Europe were sold. This
mission was essentially hidden to the people of the countries as it was sold
as a trade union. They likely knew that the people of these countries would be
almost completely opposed to the United State of Europe and so very slowly and
quietly implemented measures to achieve it. With the new calls for an EU Army
one step closer to this I think we will see greater resistance to the grander
project.

If the federalists give up on their hidden dream of the Europe becoming a
single country, they can save the EU.

------
ww520
Are leaving euro and leaving EU the same thing? Can a country leave EU but
keep the euro?

UK was lucky to retain its currency independence.

~~~
microtherion
As far as I can tell, "keeping the Euro" would simply involve for the country
to declare the Euro legal tender. Even if the EU wanted to prevent that, it's
not clear to me how it would.

That does not mean that the country would have a say in Euro governance
(controlling the mount of Euro "printed"), but the ECB is fairly independent
anyway.

According to this list, several smaller non-EU countries are using the Euro
already (and several countries worldwide are using the Dollar, including
Zimbabwe—pretty sure they don't get invites to FOMC meetings):
[https://qz.com/260980/meet-the-countries-that-dont-use-
their...](https://qz.com/260980/meet-the-countries-that-dont-use-their-own-
currency/)

~~~
cm2187
But I think it is unlikely to go that way. Countries would either leave the
euro and remain in the EU, or leave both. Monetary independance is high on the
agenda of pretty much every populist party in Europe.

------
SFJulie
Europe is actually looking like a drug dealer. They give to countries like
Poland "free" funds that are not required, and when you say you want to leave,
they brag that your dose worthed a lot more.

Being french, but seeing french predating companies (SG, orange, carrouf,
auchan, go sport, decathlon, campanile, renault, vinci, valeo...) setting
themselves in Poland with EU funds and destroying local economies (fr & pl)
makes me want to puke.

I fucking hate THIS europa.

I don't hate europa, I love my polish wife as much as she loves me. I am just
pissed off that the we let private interests rule our countries.

Well, now that Trump is elected, I know americans will be as much fucked in
the arsch as we are. lol

At least now, we are not alone to be fucked

------
spikels
Surprised to see this at the top of the page. Doubt HN is a good place to
discuss this.

~~~
cm2187
The only interesting things in this world are how Rust can do it better and
how to negociate stock options in the silicon valley.

~~~
closeparen
It's rarely a high-quality discussion when people who loudly profess their
contempt for serious students and practitioners of the social sciences and
humanities go on to make broad, confident claims about international
relations, economics, and political philosophy.

It's like a homeopathy forum discussing a medical research paper.

~~~
cm2187
I think you would be surprised by the diversity of HN readers. It has a much
broader audience than just technologists.

