There is really no straight forward answer here but looking at the commentators who have dealt with the topic recently it does not seem as a total impossibility. John Kay from the FT is consequently asking this question in today's edition (hat tip EuroZone watch) and aptly he has chosen Italy as his proxy for a possible dissident.

Can you really leave the EMU?

According to Mr. Kay it might be feasible but with some difficulty. This is of course evident and a sudden situation of Lira re-vival is certain to cast off some market wobbles. Kay is suggesting something like 1 Lira to 1 Euro domestically (it would initially have to be like this) and an exchange rate of 0.75 Euro to the Lira in financial markets. Well perhaps but if Italy opted out it would be to devalue and as such it is difficult to be certain of just how much leverage a new Italian currency would hold in the markets ... my immediate bid is; not a lot. Furthermore, a move like this would obviously create all kinds of problems with Euro denominated debt and futures not to speak of Italian bank deposits. Even regarding all this Kay ends his article saying that a sudden opt out of the EMU might actually be a future scenario given that problems  are to be solved based pragmatic policy making ...even more (dis)comforting he leaves it to the Bank of Italy to pull out a plan from the safe ...

'Civil servants, lawyers and bankers are there to ensure that a client's wishes are met even if misconceived and if the Bank of Italy does not have a plan in its safe, its officers have been failing in their plain duty.'  

We are talking Italy here, right?

Meanwhile Sebastian Dullien from Eurozone Watch (linked above) also takes time to contemplate the idea of Italy opting out of the EMU. Actually, Sebastian is a whee bit more 'optimistic' than Kay when it comes to the practical issues of leaving the Eurozone. For him the lesson from Argentina is comforting ...

Concerning the technical problems of leaving EMU, I would be even more optimistic than John Kay. After all, there is a precedent for leaving a fixed exchange rate regime with a high degree of foreign currency denomination of contracts, liabilities and assets: Argentina.

(...) 

Concerning the technical problems of leaving EMU, I would be even more optimistic than John Kay. After all, there is a precedent for leaving a fixed exchange rate regime with a high degree of foreign currency denomination of contracts, liabilities and assets: Argentina.

In the end Sebastian argues that an opt-out from the Euro actually might not be that big of a problem in a practical sense  even given the difficult aftermath which according to Sebastian is well, more or less, managable. .So Sebastian's and Kay's joint conclusion here would be that exiting the EMU definitely is a feasible yet difficult manoeuvre but that Italy should not do it ... As such Sebastian concludes ... 

'I am not saying that pulling out of EMU would be a good option – neither for Italy nor for the rest of the euro-zone. Frankly, I believe it would be catastrophe for Europe. However, technically, it might be rather easy. We all who are in for a united Europe will have to address populist critics of EMU with better arguments.' 

Can Italy actually stay in? 

I actually agree with many things here and especially the point about a united Europe ... I am very much in favor of this. However, as I have articulated so many times on this blog I cannot get to grips with the Eurozone/EMU as an economist because the structure of the agreement and the scheme itselt are contradictory. The issue about Italy is telling here and in stead of asking the question of whether Italy can actually stay out or not we should really be asking the question of whether Italy can afford to stay in; this goes for Portugal as well for that matter. My view on the EMU here is a bit like a bowl filled to the edge with ping-pong balls each representing a member of EMU. Now, the path towards total unification and integration in Europe was always going to be bumby and tough; in an economic sense this means that the idea of fostering convergence between the EMU countries through demands of convergence and common monetary policy also wouldn't be totally smooth. My point here is figuratively simple ... as we move closer towards a united Europe we shake the bowl so that the balls become aligned to each other, but in the process some balls migth just fall out and this is the way I see Italy's and to some extent also Portugal's situtation in the EMU.