This paper explains the underlying causes of the current account deficits in the New Member States of the European Union focusing on both unusually high investment and low savings. It is argued that rapidly growing and fundamentally sound economies should be able to borrow externally to finance their growth. This development model is now being tested by the current financial crisis. If these economies should experience severe economic crises, it will suggest that the current international monetary system is unable to carry out what should be one of its primary objectives and will therefore need to be fundamentally redesigned.