EXPLORING THE PATTERNS OF REGIONAL CONVERGENCE IN THE EUROPEAN UNION

Abstract

Fostering economic, social and territorial cohesion has represented a key principle since the foundation of the European Economic Community. Gradually, the gaps between countries and regions have become more prominent, the European Union reaffirming its commitment towards supporting convergence of the less developed Members. The main purpose of this paper was to study the regional convergence patterns, focusing on the key concepts β- and σconvergence. Considering the interval 2000-2021, we have illustrated that the initially less developed NUTS 2 regions from Central and Eastern Europe experienced higher growth rates compared to the developed ones. Moreover, by estimating cross-sectional regressions, we have found evidence in favor of a universal speed of convergence, with an average catching-up rate among the European regions of 1.9% per year. Complementary, based on σ-convergence, we have illustrated that income disparities diminished between 2000 and 2021 both at the aggregate level and considering the regions from Central and Eastern Europe. However, the Covid-19 pandemic reversed the favorable trend, determining an increase of income gaps among regions, the most affected being the economies belonging to the Old Members. The study draws attention that economic cohesion is an objective difficult to achieve, the crises reversing the favorable trend identified in the first decade of the 21st century.

Keywords

• economic convergence
• cohesion
• nuts 2 regions
• β-convergence
• σ-convergence
• covid-19 pandemic