Telegraph Pulls Story: ECB Prepares Legal Grounds for Euro Rupture as Greece Festers

Fears of a euro breakup have reached the point where the European Central Bank feels compelled to issue a legal analysis of what would happen if a country tried to leave monetary union.

"Recent developments have, perhaps, increased the risk of secession (however modestly), as well as the urgency of addressing it as a possible scenario," said the document, entitled "Withdrawal and Expulsion from the EU and EMU: Some Reflections."

The author makes a string of vaulting, Jesuitical, and mischievous claims, as EU lawyers often do. Half a century of ever-closer union has created a "new legal order" that transcends a "largely obsolete concept of sovereignty" and imposes a "permanent limitation" on the states' rights.

Those who suspect that the European Court has the power pretensions of the medieval papacy will find plenty to validate their fears in this astonishing text.

Crucially, the author argues that eurozone exit entails expulsion from the European Union as well. All EU members must take part in EMU (except Britain and Denmark, with opt-outs).

This is a warning shot for Greece, Portugal, Ireland, and Spain. If they fail to marshal public support for draconian austerity, they risk being cast into Icelandic oblivion. Or for Greece, back into the clammy embrace of Asia Minor.'

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The original pulled story in the Telegraph on sunday was here...