Jože Mencinger focuses on the relationship between foreign direct investment (FDI) and current account deficits. He observes that the nature of the current account deficits has been changing in the new member states (NMS). While the trade deficits were larger than the whole current account deficits until 2002, the predominant role in shaping current account deficits was taken over by the income deficits that have grown dramatically since 1999. The average income account deficit, i.e. the gap between GDP and GNP increased from 0.96% of the GDP to 4.38% of the GDP between 1995 and 2006, though the variations inside the region are considerable. Hungary, Estonia and the Czech Republic topped the list in 2006. Mencinger points out that the data show that, in the long run, the dynamics of the current account balance are shaped by the investment account balance, while the fluctuations and the country-specific levels are formed by the trade balance. The trade balance was particularly negative in the case of the Baltic States, surpassing 10% of the GDP between 1996 and 2006. He concludes that “one could say that NMS, with the exception of Poland (because of its size) and Slovenia (because of its reluctance regarding FDI, and membership of the Euro zone), have become seriously ‘addicted’ to FDI, and that a sudden termination of FDI inflow could create a situation similar to the situation in South East Asia (Malaysia, South Korea, Indonesia, Philippines and Thailand) in 1998.”