It can seem surprising that governments were so confident about market discipline and reactive national policies when one major factor of self-correction within a currency union was by design rather weak in Europe, namely labour mobility. True, progress has been made in language knowledge, university students exchange, diploma recognition and access to professions.
Over the same period, the current account balance of Ireland went from a deficit of around 5% of GDP to a surplus of around 5% of GDP. Some of the adjustment certainly reflects a decline in imports due to the cyclical compression of domestic demand. But in Spain, Portugal and Ireland, the larger part of the adjustment is attributable to robust export performance.