The Last Shall Be the First: The East European Financial Crisis

Many argue that Europe has performed anemically as it struggles to recover from the global crisis. But, Anders Aslund argues that the East European countries have masterfully handled the crisis. The Last Shall Be the First: The East European Financial Crisis isolates the causes of the crisis in Eastern Europe, charts the crisis resolution actions of major international institutions, and advances solutions for the region's recovery phase. Specifically, Aslund examines the eruption and resolution of the crisis in the Baltics, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania and Bulgaria. In addition to his focus on individual countries, he also considers the broader implications of the European crisis, and asks why the social and regulatory environment of central Europe enabled it to recover more easily. Overall, Aslund points to current account deficits as the main cause of the crisis, and provocatively labels the European Central Bank the main institutional culprit. He applauds the actions of other international organizations, such as the International Monetary Fund and the European Union, that helped resolve the crisis successfully. This significant analysis concludes that these countries have been fiscally responsible, but must implement reforms including changes in the exchange rate policy, a return to European economic convergence, and an expansion of the Eurozone.