On balance, however, in the euphoria deriving from the new prospects, the financial markets were initially prepared to accept the parities prevailing in the EMS, despite the lack of economic convergence. Alas, the policy makers in those days failed to adjust the exchange rates in good time in that “window of opportunity”. Thinking in terms of political prestige was unduly prevalent.
But when, in Denmark, the first referendum on the Maastricht Treaty resulted in a “No”, the financial markets began critically to reconsider the parities in the EMS. That gave rise to the massive, but avoidable, monetary upheavals of the autumn of 1992.