Withdrawal From The EU

Today I've been catching up with some reading and link-following.  One of the things I looked at is this legal working paper from the European Central Bank: Withdrawal and Expulsion from the EU and EMU and below are some interesting snippets.  It's a fifty-page .pdf but I paid closer attention to the first twenty-eight pages which are concerned with unilateral withdrawal and negotiated withdrawal of a 'Member State':
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Intro: The Union’s slow but continuing progress towards a more advanced level of integration, involving closer political and economic ties between its Member States and the transfer of an ever-increasing share of their essential sovereignty to the supranational European institutions, in conjunction with the EU’s declared ambition (unpopular with the public of some Member States) to bring new members within its fold, have created new tensions or exacerbated existing ones, testing the Member States’ commitment to the furtherance of European integration.

P.8 This paper is divided in three parts. Part One examines the issue of a Member State’s voluntary withdrawal from the EU and/or EMU. Part Two looks at the legal and conceptual issues arising from a Member State’s possible expulsion from the EU and/or EMU. Finally, Part Three provides an overview of the implications of a Member State’s exit from the EU and/or EMU for its use of the euro. It will be argued that unilateral withdrawal from the EU would not, as a matter of public international law, be inconceivable, although there can be serious principled objections to it; and that withdrawal from EMU without a parallel withdrawal from the EU would be legally impossible.

P.11 As for a Member State’s withdrawal from the EU, the complexities surrounding it are legion, affecting the rights and obligations of every natural or legal person inside or outside the territory of the withdrawing Member State who is or who may be affected by it.

P.17 The European Court of Justice has ruled: "By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to Community, the Member States have limited their sovereign rights and have thus created a body of law which binds both their nationals and themselves … The transfer by the States from their domestic legal system
to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights."

P.22 ...the conclusion is that the assertion of an implied right of unilateral withdrawal from the treaties, even in exceptional circumstances, would be highly controversial (especially in the case of EMU, where in the text of the EC Treaty it is clear that no such right was intended) except, perhaps, as a last resort in the event of an extremely serious and lasting infringement of the treaties or extraordinary circumstances affecting a Member State’s ability to fulfil its treaty obligations.

P.24 Article 50 of the Lisbon Treaty explicitly makes provision for the voluntary secession of a Member State from the EU. Specifically, the exit clause provides that a Member State wishing to withdraw from the EU must inform the European Council of its intention; the Council is to produce guidelines on the basis of which a withdrawal agreement is to be negotiated with that Member State; and the Council, acting by a qualified majority and after obtaining the consent of the European Parliament, will conclude the agreement on behalf of the EU. The withdrawing Member State would cease to be bound by the treaties either from the date provided for in the withdrawal agreement or, failing that, two years after notification of its intention to withdraw.

P.24 The exit clause, as formulated, raises at least three concerns. First, despite the references in it to a negotiated agreement on the details of the withdrawing Member State’s departure, the exit clause recognises, effectively, a unilateral right of withdrawal as well as a possibility for a Member State to negotiate its agreed exit from the EU. Second, ...a mass exit from the EU. A third, and perhaps the most serious, concern, ... the euro.


P.25 There are at least three clear indications that the exit clause embodies a unilateral right of withdrawal. These are: (i) the reference, in Article 50(1), to a Member State’s withdrawal ‘in accordance with its own constitutional arrangements’; (ii) the fact that a Member State’s withdrawal is not conditional on the conclusion of a withdrawal agreement, since a Member State can withdraw even if negotiations with the Council break down, provided that two years have elapsed since the notification to the Council of its decision to withdraw; and (iii) the fact that ‘the right to withdraw is not connected with the adoption of a constitutional change that a Member State cannot accept, but introduced without such restrictions. This third consideration is crucial since it is not the element of negotiation that would make a Member State’s withdrawal consensual (as opposed to unilateral), it is the absence of restrictions on a Member State’s right to withdraw that is decisive. Negotiations would, in any case, be necessary to organise a Member State’s departure.

If this assessment is correct, that Member States have a unilateral right of withdrawal under the Lisbon Treaty, the exit clause would appear to represent a notable departure, rather than a mere codification of international or Community law on the right of Member States to withdraw from their treaty commitments. For the reasons explained earlier, this does not sit comfortably with the fundamentally integrationist rationale of the treaties, with the sui generis nature of the Community legal order and, not least, with Article 48 TEU and with the specific procedure for amending the treaties that this provides (of which a Member State’s withdrawal would be a prime example).  Why the drafters of the Lisbon Treaty introduced such an abuse-prone provision into the treaties can only be a matter of speculation.

P.26  ...the exit clause recognises the practical reality that, politically, a sovereign Member State cannot be coerced into honouring commitments it no longer has an interest in.

P.29 While a Member State may be free to denounce its EU participation and repudiate its treaty obligations in their entirety, it would not be free to go back on its decision to join EMU without breaching a binding obligation, under the EC Treaty, unless it were also to withdraw from the EU...Such a genuinely unilateral right of withdrawal would be unthinkable in the context of EMU...

Intermediate Conclusions:
That negotiated withdrawal from the EU would not be legally impossible even prior to the ratification of the Lisbon Treaty, and that unilateral withdrawal would undoubtedly be legally controversial;
That, while permissible, a recently enacted exit clause is, prima facie, not in harmony with the rationale of the European unification project and is otherwise problematic, mainly from a legal perspective;
That a Member State’s exit from EMU, without a parallel withdrawal from the EU, would be legally inconceivable;

Next stage: euro
Footnote 35 This clearly follows from Articles 122(2) and 123(4) EC, pointing to the obligation of non-participating Member States to maintain momentum towards the abrogation of their derogations and transition to the single currency.

Four gems in the footnotes:

In a sense, some lack of legal certainty is desirable. As suggested above, if expulsion is impossible this may deprive Member States of an incentive to comply with their obligations. The hitherto silence of the treaties on the issues of withdrawal and expulsion may therefore be preferable to clarity.

For an account of the abusive use to which the exit clause could be put, see Zeh, pp. 204-205; Eerola p. 1, argues that, because the exit clause could encourage national governments to use the threat of withdrawal to extract concessions (and national electorates to elect confrontational politicians willing to act on such threats) the exit clause should be amended to require a withdrawing Member State’s voters to approve withdrawal in a referendum.

The advisability of a referendum is highly questionable, considering the grave political implications of such a step for the stability of the Union and its impact on the future relations between an expelled Member State and its former partners.

The insertion of the exit clause probably reflects the desire of the drafters of the Lisbon Treaty to avoid giving the impression that the Member States are captives of an undemocratic EU. The reasoning may well have been that if Member States have an institutionalised right to withdraw from the EU, they are unlikely to object so strongly to surrendering more of their sovereignty to its institutions.
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From all the above the next two items on the EU agenda will be (a) close the loopholes around the exit clause and (b) increase pressure on Britain to join the euro asap.

The distinction between natural and legal person on P.11 may be of interest to those considering becoming Freemen.

Withdrawal From The EU