1 Export or Perish. Can Internal Devaluation create enough good job growth in Southern Europe? Sofia A. Perez (Boston University) and Manos Matsaganis (Polytechnic University of Milan) Abstract During the early 2010s, creditor states and EU institutions demanded that the Southern states of the eurozone liberalize their labour markets to facilitate internal devaluation and export-led recoveries. With some variation, the Greek, Portuguese, Spanish and Italian governments responded complied. This article explains why such a strategy of internal devaluation within the eurozone might fail to produce adequate employment growth to put these countries on stable financial footing. It exploits variation in the timing and intensity of reforms to evaluate the record of the internal devaluation strategy. Our findings suggest that there is no linear relationship between internal devaluation and export-growth. Even where the latter has been impressive, dualism persists and the employment recovery has been weak. Acknowledgements Earlier versions of this paper were presented at conferences and seminars in Florence, Lake Como, Boston, Groningen, and Madrid. The authors would like to thank participants for their comments, and are particularly indebted to Alexandre Afonso and David Luque Balbona. Detailed suggestions from two anonymous referees are gratefully acknowledged. Research for this article was supported by a grant received by Manos Matsaganis under the Reconciling Economic and Social Europe project funded by the European Research Council (Advanced Grant no. 340534), and by the Project Democracy in Times of Crisis: Power and Discourse in a Three-Level Game (PTDC/IVCCPO/2247/2014), led by Catherine Moury.