* Country could continue to use euro after EU exit
* Consensual euro use could continue after negotiated exit
* Only way to exit EMU is to withdraw from EU
(Adds details, background)
FRANKFURT, Dec 22 (Reuters) - The new European Union treaty could allow a country to keep using the euro even if it left the euro zone, a European Central Bank paper said on Tuesday.
Expelling a country from the EU and monetary union was also technically possible under the newly-ratified Lisbon treaty, although very unlikely, ECB legal counsel Phoebus Athanassiou said. The legal working paper looks at the implications of a new exit clause in the new EU treaty, which spells out arrangements for the voluntary withdrawal of member states from the EU.
"Recent developments have, perhaps, increased the risk of secession (however modestly) as well as the urgency of addressing it as a possible scenario," the author said.
Some analysts have said there was a chance of the euro zone shrinking as uneven economic development within the union could harm some members. ECB officials, including ECB President Jean-Claude Trichet have dismissed any such speculation.
A country could choose to withdraw unilaterally from the EU in three circumstances -- another member state fundamentally infringes the treaties continuously, EU institutions act beyond their powers, or a member state cannot comply with obligations due to extraordinary difficulties, Athanassiou said.
The other option for withdrawal within the treaties was negotiated withdrawal, the author added. A negotiated withdrawal from the EU would be inconceivable without a parallel exit from the monetary union, the study said.
Withdrawing from monetary union was not specifically mentioned in the exit clause, but the paper concluded that if a euro zone state withdrew from the common currency region, it would also have to leave the wider EU -- although not necessarily give up the euro completely.
"The only way to withdraw from EMU is to withdraw from the EU," the paper said, and added the country could perhaps continue using the euro currency even outside the EU.
"Even if institutional membership of the euro area would not survive a member state leaving the EU, this would not necessarily prevent it from using the euro," the paper said.
"This (exit) does not necessarily mean that the euro could no longer circulate in its territory."
In case of a voluntary withdrawal from the EU and the EMU, consensual euro use could be possible, it said, but added the ECB and the European Commission would almost certainly view a unilateral decision to continue using the euro as negative.
Expulsion from the EU or monetary union was technically possible but "would be so challenging, conceptually, legally, and practically, that its likelihood is close to zero," the paper said.
"Persuading a member state to withdraw, by making use of the proposed exit clause or resorting to the regular treaty revision procedure, may be the better option," the paper said. (Reporting by Krista Hughes; Editing by Stephen Nisbet)