Once such a country joins the monetary union, there is then a danger that its parity does not correspond to the fundamentals and that the country consequently joins EMU at the “wrong” exchange rate. From a formal point of view a currency board is hardly compatible with the framework of ERM II.
However, the sheer size of these financial flows into the United States is not sustainable indefinitely. We know that U.S. external indebtedness-even with that country's reserve-currency status-cannot keep growing forever. This is especially so given that this borrowing is being used mainly to finance current consumption.