The conventional wisdom is that the Greek and Eurozone crises are the result of fiscal profligacy, which has justified austerity as the primary policy to exit the crisis. This interpretation of the crisis fits the case of Greece and, to a lesser extent, Portugal, but cannot explain why Ireland and Spain had to request assistance, given that prior to 2008 they had lower deficits and public debt than most Eurozone countries. The features that set the four peripheral countries apart from the rest of the Eurozone are the large current account deficits they all experienced before 2008. This observation suggests that the origins of the Eurozone crisis are to be found in external rather than fiscal imbalances. The implication is that the exclusive policy focus on reducing fiscal deficits is misguided and the four peripheral countries should be helped to reduce external deficits by recovering competitiveness.