Leaving the Euro

A. Expulsion from the EU or EMU: doctrinal considerations

Unlike the Charter of the United Nations (UN), Article 6 of which expressly provides for the possibility of a UN Member being expelled for persistently infringing the principles of the Charter, there is no treaty provision at present for a Member State to be expelled from the EU or EMU. The closest that Community law comes to recognising a right of expulsion is Article 7(2) and (3) TEU, allowing the Council to temporarily suspend some of a Member State's rights (including its voting rights in the Council) for a 'serious and persistent breach by a Member State of the principles mentioned in Article 6(1)' of the EU Treaty. This might be thought of as a preliminary step to the expulsion of a Member State, but it is not the same as its definitive expulsion. The idea that the treaties should explicitly provide for a possibility of expulsion was discussed in the 2001-2003 Intergovernmental Conference responsible for drafting the ill-fated Constitutional Treaty, but was abandoned. The same idea resurfaced more recently in the discussions on the Lisbon Treaty, but was once again abandoned. If a right to expel Member States from the EU or EMU does not exist, could such a right be asserted or should it be introduced? Several considerations are relevant here, all of which militate against the assertion, by way of interpretation, or otherwise, of a collective right of expulsion from the EU or EMU.

The first objection to reading a right of expulsion into the treaties is a formal one. A Member State's expulsion from the EU or EMU would inevitably result in an amendment of the treaties, for which the unanimous consent of all Member States is necessary under Article 48 TEU. Given that a Member State's expulsion would, by definition, be contrary to the presumed wish of that Member State to continue its membership of the EU, a right of expulsion would be inconceivable, since it would have to entail an unauthorised Treaty amendment, in breach of Article 48 TEU. Besides, it is likely that some Member States would object to the introduction of a right of expulsion in the treaties, coupled with an amendment of Article 48 TEU to make that possible, since this would expose them to the risk of being forced out at some future date.

Moreover, apart from it being politically almost inconceivable, forcing a Member State out of the EU or EMU would inevitably give rise to tremendous legal complexities. This, perhaps, explains why expulsion has not been, and may never be, provided for in the treaties. While, by and large, these complexities would not differ qualitatively from those relating to a Member State's voluntary withdrawal, their resolution would be even more complicated in the case of a Member State's expulsion, because of the risk of legal challenges by disgruntled natural persons, legal entities or even countries, objecting to the loss of the rights that they or their nationals may have acquired from membership of the EU and invoking their legitimate expectation of maintaining these in perpetuity as an obstacle to expulsion. The position has been cogently summarised as follows -

The third and perhaps most serious objection to the assertion or introduction of a collective right of expulsion from the EU or EMU is conceptually similar to one of the more potent objections to the existence of a unilateral right of withdrawal discussed in Part One of this paper. The extent to which asserting such a right would be legally possible must ultimately depend on whether, as a sanction or a remedy, expulsion and its rationale would be consistent with the letter and the spirit of the sanctions and remedies already provided for in the text of the treaties. On the compatibility of a collective right of expulsion with the letter of the treaties, a commentator has rightly argued that 'the EC Treaty provides a set of remedies which can be invoked against the errant State, and there are no grounds for implying any additional remedies in the Treaty'. As discussed above, the exhaustive list of sanctions provided for in the treaties does not include a right to withdraw 'in protest' against a fellow Member State's failure to comply with its treaty obligations; the same is true of expulsion, which is not catered for in the treaties, however serious or repeated a Member State's non-compliance may be and however much its departure may be desired by its partners. On the compatibility of a right of expulsion with the spirit of the treaties, such a right would clearly be irreconcilable with the rationale of the existing body of sanctions for a Member State's infringements of Community law. Even a cursory examination of the sanctions provided for in the treaties shows that their purpose is not to punish a Member State for failing to live up to the expectations of the other Member States, but to encourage it to comply with its treaty obligations. Since expulsion would put a Member State in a situation where it would no longer be able to comply with its obligations, however genuine its remorse for past mistakes and however firm its commitment never again to fail to meet its obligations, such a right would be at odds with the treaties, and in particular with the conciliatory rather than punitive nature of their sanctions for infringements of Community law. From this perspective, it is doubtful whether expulsion is conceivable, even as a measure of last resort, after all other means for turning round an errant Member State have been exhausted. This is because even so restrictive an application of a purported right of expulsion would not obscure the clear discrepancy between the modest effects of the treaty provisions for sanctions and the radical effects of expulsion or, a fortiori, the conflict with the requirement for unanimity in Article 48 TEU for decisions resulting in an amendment of the treaties.

Thus, not only is a collective right of expulsion not provided for in the text of the treaties, but, what is more, the legitimacy of its assertion or introduction would be highly questionable, both legally and conceptually. This main conclusion inevitably raises two further questions. Does the exclusion of a collective right of expulsion deprive the EU of the ultimate deterrent against a Member State's non-compliance, the existence of which would otherwise presumably ensure compliance? And, if so, would there not be a need to introduce such an explicit right in the treaties, so that the risk of a Member State failing to comply with its obligations is countered by the threat of its expulsion? These questions hark back to the fundamental jurisprudential question of whether sanctions are an integral part of any rule of law (even if only implicitly) or whether valid rules of law can exist even in the absence of sanctions for their infringement. An account of the evolution of legal thinking on this matter, and, in particular, of Hart's challenge to Austin's positivist theory of the law as 'the command of the sovereign, backed up by sanctions', lies outside the scope of this paper. However, for those who subscribe to the view that legal rules and sanctions are independent of one another, neither the lack of a possibility of expulsion nor the absence of any other sanction for breaches of Community law obligations is an aberration that some may feel the need to guard against through the assertion of a collective right of expulsion, nor does the lack of sanctions diminish the binding effect of Community law. In any case, the sanctions already provided for in the treaties and the damaging publicity from a Commission decision to commence infringement proceedings against a non-compliant Member State or an ECJ ruling against it are potent enough, even without the legal possibility of the errant Member State's expulsion from the EU or EMU.