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ERM IINew Exchange-Rate Mechanism
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These dates do not coincide with the dates on which these countries joined the ERM II (May 2005 for Latvia and June 2004 for Lithuania) because the Reinhart and Rogoff (2004) fixed regime classification requires narrower fluctuation bands than the 15% fluctuation bands dictated by ERM II.
Finally, the Dutch experience does not necessarily imply that accession countries should adopt explicit target zones, join ERM II quickly, or participate in ERM II for a long time.
Given that the Baltic countries have been pursuing a pegged exchange rate long before they joined the EU in 2004, it is not surprising that all three of them adopted the ERM II mechanism soon after becoming EU members.
Finally, the exit strategy from the ERM II needs to be set out to ensure a smooth transition to the single currency.
A somewhat less ambitious target regarding early ERM II and Eurosystem membership might offer candidate countries greater leeway for achieving a proper balance between nominal and real convergence.
Each candidate country should spend at least two years in the ERM II to prove that it meets the criteria for membership in the euro zone--the so-called Maastricht criteria.
This paper reviews the strategy of the Bank of Slovenia designed for ERM II entry and inside ERM II policy management.
13]: "One of the conditions of Poland's accession to the EMU will be the inclusion of the zloty in the ERM II system for at least two years.
Monetary policy in Hungary is conducted in the shadow of the ERM II framework.
They also discussed the topic of Bulgaria's future membership in ERM II and subsequently in the euro area.
These are, in his words: joining the Schengen borderless area, entering the transitional single-currency mechanism ERM II, joining the EU's Single Supervisory Mechanism and taking steps towards entering the EU's nascent energy union by pursuing liberalization, diversification and an inclusion into Eastern Europe's energy exchange.