According to most analyses, the economic crisis has revealed the existence of two Europes: northern Europe, which is generally speaking more efficient and disciplined; and southern Europe, prodigal and politically unstable. But is this generalization true? Obviously, it is an exaggeration. Nevertheless, there are some elements of truth that can be found in this superficial division of the European states. Within the eurozone, for example, northern states are the ones with better economic performance – even in the case of the Ireland. The terrible economic crisis which blasted the banking sector has already passed, even though their sovereign debt is higher than 127% of GDP. Outside of the eurozone, the case of Iceland is also worth mentioning because it can be considered a typical example of northern efficiency. The little country went bankrupt in 2008. After a bailout plan and measures to help families and consumers, the country is on its way toward a complete recovery. On the contrary, Portugal and Greece, two of Europe’s southern states, are still experiencing troubles due to high levels of sovereign debt and a stagnant economy. Both are led by coalition governments and undergoing a bailout process that severely restricts their ability to make decisions. Both are in recession and both are politically unstable countries. What will the future of this two-speed Europe be? It’s hard to say, but conventional wisdom would suggest incentivizing structural reforms to narrow the gap.