In the past, the volatility of these exchange rates has been most harmful to the closely interdependent national economies of the European common market. Let’s think back for instance to the ERM-crises in 1992 and 1993.
The single currency has completely removed exchange rate risks for exporters and importers, debtors and creditors across the 12 countries of the euro area and has thus eliminated the costs of hedging exchange rate risks vis-à-vis other euro area countries.