While not always evident from the headlines, an underlying cause of the eurozone crisis – and now an obstacle for growth in the south – has been the divergence in production costs that developed between the peripheral countries, notably the “south” (specifically, Greece, Spain, Italy, and Portugal) and the “north” (for simplicity, Germany) during the first decade after the introduction of the euro. Unit labor costs in the four southern countries increased by 36%, 28%, 30%, and 25%, respectively, from 2000 to 2010, compared to less than 5% in Germany, resulting in an end-2010 cumulative divergence above 30% in Greece and more than 20% in Portugal, Italy, and Spain.