Incidentally, but significantly, these current account imbalances between the “core” and the “periphery” are, to an extent, the result of post-1999 fiscal convergence to fiscal divergence story in the eurozone for, unless, net private savings offset it, fiscal deficit typically tends to spill over into current account deficit and, therefore, post-euro launch, there ought to have been a credible, effective and functioning institutional enforcement mechanism to ensure ongoing compliance on Maastricht fiscal parameters.
Of course, this post-1999 fiscal convergence to fiscal divergence story in the “periphery” would not have mattered if, like in the case of Japan, net private savings more than offset the comparable net public dissaving (fiscal deficit) of –9.5%! So the way out of the current crisis is unwinding these imbalances through higher productivity and competitiveness in the periphery relative to the core.