At the end, they operated an unsustainable model based on structural deficiencies. Reforming this model is the most promising approach to facilitate rebalancing. Not every deficit country needs the same structural reforms, of course, but all require some sort of adjustment. And a number of reforms have already been undertaken. The process of rebalancing through structural reforms is therefore well under way.
The current accounts of deficit countries have improved dramatically since 2008. The improvements range from nearly 9 percentage points of GDP in Ireland to more than 15 percentage points in Greece. According to recent estimates by the European Commission, most crisis countries will achieve a current account surplus this year.