Since their emergence in the 19th century, territorial state-controlled currencies reflected basic issues of national identity, self-representation and ideology. In consequence, beyond its broad objectives of national macroeconomic management, monetary sovereignty (the control and authority over monetary issues) played a critical role in the process of state-building and nation-making. The concept of sovereignty has always played a defining role in designating “insiders” and “outsiders” of political projects. As sovereignty over a shared currency was redefined and reallocated in Europe from the 1980s, a new inside-outside dynamic was set in motion. It was in this context that the North-South divide within the European Union became a prominent political issue in the process of monetary integration. It was then that the famous derogatory acronym PIGS became increasingly popular to designate Southern European countries (Portugal, Italy, Greece, Spain) affected by common symptoms of economic vulnerability and institutional weaknesses, deeply rooted in their histories. The post-2007 crisis has revived a debate only temporarily soothed by the initial enthusiasms for the single currency. By conflating economic indicators, cultural stereotypes and anecdotal evidence, the past has been used again in the public discourse to convey an impression that their crisis is rooted in their history of incomplete and controversial modernization. Consequently, austerity measures have been presented as a deserved redress for that original sin just as much as for financial and macroeconomic imbalances. This work package will focus on how the past has been used, and could be better used, to understand the longer term sources of the recent economic difficulties in Southern Europe. It will combine an analysis of the use of history in the public discourse on the process of European monetary integration and the Euro crisis with a long-run quantitative and institutional analysis of the causes (both common and idiosyncratic) of recent financial and macroeconomic imbalances.