On the origin of European imbalances in the context of European integration

We study the origin of European imbalances in the context of European integration. As a whole, the European Union and Eurozone have had nearly balanced external accounts. However, member countries have presented divergent positions. We analyse the factors underlying the presence of European external imbalances. Our results reveal the existence of a structural component of the current account. This compononent could be related to the economic structure and the non-price competitive advantages of each country.