Thus, there was no currency-mismatching problem - i.e., large, uncovered foreign-currency positions, which, under conditions of currency devaluations, raise the debt burden of domestic foreign-currency borrowers, resulting in bankruptcies and financial crises. In addition to placing the Bank of Greece’s disinflation strategy within a new institutional framework that gave it added credibility, the ERM provided another important advantage.
Competition should be enhanced, since all consumers using payment services, and not just those making cross-border payments, will be able to choose between payment service providers throughout the euro area, regardless of where they might be located. This should foster innovation in the provision of payment services.