Luiz Carlos Bresser-Pereira e Pedro Rossi
Paper presented to EAEPE (European Association for Evolutionary Political Economy) Annual Conference, Cyprus, November 6-8, 2014.

This paper presents an interpretation of the European crisis based on the balance of payments imbalances within the Eurozone and highlighting the role of the “internal” real exchange rates as a primary cause of the crisis. It explores the structural contradictions that turn the Euro into a “foreign currency” for each individual Eurozone country. These contradictions imply the inability of national central banks to monetize the public and private debts, which makes the Euro crisis a sovereign crisis similar to those typical of emerging countries, but whose solution presents additional obstacles.