In the wake of economic damage (EMU)

The crisis also had political causes. Doubts had arisen about the commitment of EU countries to Economic and Monetary Union (EMU) as established in the 1992 Maastricht Treaty that created the EU.

EMU originally met with a great deal of skepticism, and early in 1992 the Danish electorate rejected the Maastricht Treaty in a referendum. The treaty was passed in Denmark in a subsequent referendum and EMU eventually went into effect; however, the uncertainty concerning the future of EMU was an important factor in the speculative attack.

In the wake of economic damage caused by trying to maintain fixed exchange rates during the crisis, Italy and the United Kingdom left the ERM and allowed their currencies to fluctuate freely against those of other states. Other countries retained formal membership in the system, although Spain, Portugal, and Ireland devalued their currencies several times.

There was another speculative crisis in 1993; in response, the margins of fluctuation were widened to 15 percent. Such a wide margin of fluctuation made the ERM essentially useless for regulating currency rates and signaled the collapse of the ERM as an anchor against inflation.