Eastern European currencies need help now
Zsolt Darvas and Jean Pisani-Ferry warn that markets are worried that the EU has no real response to the crisis in the postcommunist member states. Decisive action is therefore needed, which the authors outline in six different possible steps: avoid further excessive exchange-rate depreciations; temporarily substitute missing private capital inflows with public capital inflow; make the entry to the euro criteria not softer, but economically sensible; have the ECB further recoginise the extent of its regional responsibilities; put the issue of private debt restructuring on the agenda; avoid Europe displaying the lack of coordination it has openly demonstrated in recent time.
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