Convergence or not?

Economic convergence is one of the main objectives of the European Union. So far, it’s only been moderately successful.

The alignment of living standards – economists call it “convergence” – has indeed seen success on the national level since the 1950s. On the regional level, however, the GDP per capita can differ extremely in some cases.

The Cologne Institute for Economic Research (IW) analysed some 1300 so-called “NUTS-3-Regions” in the EU from 2000 to 2013 and placed them in four categories (see infographic).

• Emerging. Almost all East European countries have made large improvements across the board, as well as a few areas in Spain and Portugal.
• Falling behind. Many regions in Greece, southern Italy, France, Spain and even Great Britain had a below-average prosperity level in 2000, and their economic output since then has partially shrunk.
• Stagnating. Almost all other regions in France and Great Britain revealed an above-average level of prosperity in 2000, and not much has changed since then.
• Flying high. Regions that were already prospering economically in 2000 have often increased in strength.

What differentiates these regions? The local industry lays the foundation for growth and prosperity, and regional development plays a role as well – when it is implemented properly. There is, however, no magic formula – every region has to take its own particular conditions into consideration.