Slovakia joined the euro area after a period of unprecedented real appreciation. The response to financial crisis combined internal devaluation with productivity increasing measures, including capital deepening in the banking sector. Although this strategy was successfully restoring an external equilibrium, the economy experienced a strong but short recession in 2009 which was driven by credit reductions. This development is compared with Estonia and Slovenia, two other small and very open economies, recently entering the euro area. The financial crisis reduced the financial integration gains in new euro member states in Central and Eastern Europe.