Chapter 5 investigates the consequences of the Great Recession on indicators of macroeconomic and microeconomic efficiency and equity. In Europe the financial crisis appeared initially under forms similar to those characterizing the United States, but soon assumed a very different form, due to the state intervention to save ailing banks, and the EMU peculiar institutions. More recently, the crisis has again changed its nature, as sovereign debt has been absorbed by banks, thus causing a problem for them and, in turn, again for the public finances that had to face bank failures. An important role was played by the specific financial imbalances that appeared in the EMU as a consequence of the formation of a currency area. Pre-existing imbalances became more intense when Germany decided to cope with the difficulties of a mature economy and unification with its Eastern Lander by adopting an export-led growth model supported by real devaluation. Then, European financial integration allowed for persistent net lending from core countries to peripheral countries, which compensated for the current account of the latter towards not only the former but also countries external to the EA.