Opt-out clause for euro states not on the cards, says Hänsch

Date: 31/10/02

By Karen Carstens

A PROMINENT member of the Convention on the future of Europe has dismissed the idea of giving a member state the option of quitting the EU but staying in the eurozone, or vice versa.

'There can be no special withdrawal clause for the euro,' Klaus Hänsch, chairman of the Convention's working group on economic governance, told European Voice.

A 'skeleton' constitution unveiled on Monday by Valéry Giscard d'Estaing, the Convention chairman and former French president, envisages an unprecedented mechanism for member states to leave the Union.

Since membership of the euro has until now been seen as irrevocable, there is speculation that Giscard's plan might, for the first time, offer countries a formal exit route from the single currency.

Hänsch insists there is 'no way' this could happen.

'The single currency is enshrined in the Treaty. Only Denmark and the UK have the opt-out clause,' he said, referring to the 1992 Treaty of Maastricht which allowed those countries which did not wish to join the eurozone initially to join in future.

'No one else will get it,' he added. 'New members must therefore join the eurozone.'

However, this will not happen as soon as accession countries join the Union.

The Maastricht criteria assumes that the entrants will stay for at least two years in 'ERM II', the new exchange rate mechanism, before adopting the single currency.

Even if it were possible for a member state to suddenly leave the eurozone, it is still too early to worry financial analysts.

'The reason why euro membership was fixed and irrevocable was to avoid the possibility of currency instability. What we are talking about is an extreme scenario and from a market point of view it's not quite on the agenda yet,' Neil MacKinnon, chief economist at the ECU Group in London, told Reuters this week.

Hänsch said: 'We want to address the issues of substance first. The discussion now has been to plan for a new basis for the Union and not how we conceive a clause about leaving the Union.'

But the sweeping changes that would allow for such an 'opt-out' to the single currency for member states just isn't in the cards, he stressed. 'Whoever leaves the Union, leaves it totally' he added.

A prominent member of the Convention on the future of Europe has dismissed the idea of giving a Member State the option of quitting the EU but staying in the eurozone, or vice versa.