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Re:Latvia becomes 18th state to join the eurozone by _delirium on Wednesday January 01, 2014 @05:12PM (#6996987)
Good point, that's definitely another ability a country in ERM retains (though if done unilaterally it would still constitute pulling out of ERM as a treaty). That's what China does with their unilateral and occasionally revised peg to the dollar, for example.

I'm not entirely sure what the results would be, but you do lose some of the current benefits if people start believing the exchange rate is no longer really fixed. Currently the large amount of Danish-German cross-border trade effectively ignores currency exchange risk, because they assume the EUR-DKK peg as formalized through ERM is solid enough that it won't change in the forseeable future. So it's "safe" to have liabilities in DKK and revenue in EUR or vice-versa without taking any particular measures to hedge your risk. That was part of the goal of both the Euro and ERM, since being able to ignore exchange risk makes it easier for businesses to treat Europe as a single market. Once you change it once, then it might be a while again before businesses feel comfortable relying on the new peg.

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