But one part of the explanation is clear: the original institutional design of the euro area did not meet expectations. In the euro area we have a single monetary policy, but our economic and financial policies are only loosely coordinated. This is because the euro area is a union of nation-states with strong national traditions and preferences.
At the same time, countries running the fixed exchange rate regime suffered greater economic turbulences. For example, the Baltic countries Estonia and Lithuania had to resort to adjustments through wage reductions, ending the year with a 15% fall in GDP. As for Serbia, the flexible exchange rate regime also paved the way out of the crisis.