Great Recession Widened Real Exchange Rate Misalignments in New EU States.
The Great Recession changed how countries in the EU handle their exports and imports. This affected their real exchange rates and sustainable levels. Some countries with fixed exchange rates and high debts saw their real exchange rates misaligned more than before. Countries with balanced trade will see their currencies appreciate, while others may need to devalue to manage their debts. The estimates show bigger imbalances than what the IMF predicted, but predicting the right exchange rates is tricky.