02078cas a2200253 a 4500 AALejournalIMF006528 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455201228 1018-5941 BD-DhAAL BD-DhAAL Jaumotte, Florence. Current Account Imbalances in the Southern Euro Area / Florence Jaumotte, Piyaporn Sodsriwiboon. Washington, D.C. : International Monetary Fund, 2010. 1 online resource (49 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper examines the causes, consequences, and potential cures of the large current account deficits in the Southern Euro Area (SEA). These were mostly driven by a decline in private saving rates. But it was the European Monetary Union and the Euro, which enabled these countries to maintain investment rates, and thus run larger current account deficits, by improving their access to the international pool of saving. The paper finds that the deficits in SEA in 2008 were larger than can be explained by fundamentals, though the situation varies substantially across countries. It also finds that although the global financial crisis has started to force some unwinding, the current account deficits are expected to remain high in the medium run, though again with substantial variation across countries. The paper argues these large external deficits pose risks to the economy and therefore matter, even in a currency union, and discusses some policy options to reduce them. Mode of access: Internet Sodsriwiboon, Piyaporn. IMF Working Papers; Working Paper ; No. 2010/139 Full text available on IMF http://elibrary.imf.org/view/journals/001/2010/139/001.2010.issue-139-en.xml IMF e-Library