The euro zone’s very distinctive functioning since capital mobility between the member countries disappeared

Since the 2010-2013 euro-zone crisis, capital mobility has been missing between the euro-zone countries. T he countries that previously had external deficits had to eliminate them because they were no longer financeable . T his has had two important consequences: Investment is closely tied to domestic savings; If a gap opens up between investment and savings , domestic long-term interest rates rise drastically , as the resulting external deficit is difficult to finance.