European leaders rushed to make it clear that Sunday’s Greferendum is actually a vote on euro-zone membership and not on the creditors’ proposal.
Yet as there are no official mechanisms for leaving the euro-zone (“Hotel California”), Greece might opt for appealing for an injunction in the European court of justice.
The Daily Telegraph quotes Greek finance minister Yanis Varoufakis:
“The Greek government will make use of all our legal rights,” said the finance minister, Yanis Varoufakis.
“We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable,”.
Yet even if Greece has a good case, on the grounds of the lack of a mechanism to throw a country out, it is hard to see how Greece could continue using the euro if the ECB cuts the ELA. Without a supply of euros, Greece might be forced to use a parallel currency, even if it is not kicked out. So far, the ECB only limited ELA, and triggered capital controls.
And as we know, the wheels of justice move slowly, so even if Greece eventually wins the case, it might be too hard to return to the currency union.
Perhaps the threat to go to court could impact leaders. It is important to remember that once one country leaves the euro-zone, it becomes reversible, akin to a fixed exchange rate arrangement and of lower political importance.
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