In search of sustainable paths for the euro zone in the trouble post-2008 world.

Summary The diversity in the eurozone has costs and advantages, respectively, for countries whether they are confronted with an overvalued or undervalued euro. Rough estimations of these costs and benefits help to assess the adjustments that could lead to a sustainable eurozone. A purely financial type of federalism, set up under the pressure of financial markets, risks falling short of the objective. A budgetary federalism, if it is based on long-term investment programmes with an enlarged political support, is more likely to meet the objective. A scheme of multispeed Europe could constitute a fallback solution if the political support for a budgetary federalism is not attained.