The adjustment of current account imbalances within the European Monetary Union since the beginning of the Great Recession

High and persistent current account imbalances in its Member States have been a feature of the European Monetary Union (EMU) ¹ from its onset. Although the euro area as a whole has remained relatively close to external balance with the rest of the world, ² this balance has been the result of a highly differentiated behavior between countries (Figure 7.1). On the one hand, Greece, Portugal and Spain ³ have experienced significant current account deficits and, on the other hand, Germany and other small countries such as the Netherlands and Finland have registered large surpluses.