High external deficits in Greece, Ireland, Portugal and Spain are widely regarded as culprits of recent financial crises in the Eurozone. This chapter examines the main drivers of those imbalances and discusses how the mix of macroeconomic adjustment and structural reforms implemented in the last few years has affected the evolution of those countries’ external positions. The analysis combines modern theories of the current account and of real exchange rate with panel data regressions to shed light on the standing of those economies’ external “competitiveness” broadly defined.