Financial Times
December 6, 2011
An obligatory shutdown of the banking sector, exchange controls and mass litigation resulting in judgments that cannot be enforced. . . These are among the adverse effects that lawyers and advisers are now modelling for clients amid fears that a country could leave the eurozone.
Companies and legal experts are planning for the worst as European Union leaders engage in a frenetic week of talks and diplomatic arm-bending to save the euro.
Leading US and UK legal firms have mobilised teams for clients – ranging from banks, corporates and hedge funds to governments – to try to spell out the implications of what happens if the eurozone starts to fall apart. Their worst-case forecasts show how high the stakes are.
“Clients have a lot of queries, some of which are EU-specific, like how a country could exit the euro and what the timetable would be,” said Jay Modrall, a Brussels-based partner at Cleary Gottlieb Steen & Hamilton, the US firm advising the Greek government.
“Others have questions about the impact of a hypothetical euro exit on different types of contractual obligations in different scenarios, such as whether the exit was legal or not under EU law.”
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