CASE Policy Briefs, EU New Member States, Europe, Post-communist transition and development issues, regional inequality, Trade, economic integration and globalization

Europe's recent transition: growth, convergence and regional disparities

Since the fall of the iron curtain, Europe has undergone dramatic reforms and changes, most notably East-West integration, expansion of the European Union (EU) internal market and monetary integration. Two decades after the initiation of reforms we now have data to assess whether they have caused dramatic changes to the economic landscape of Europe. Specifically, has European integration contributed to regional convergence or greater income disparities? Using data from 1995-2005, recent findings from the ENEPO (Eastern Neighbourhood: Economic Potential and Future Development) project show that economic integration has resulted in greater EU-wide convergence, but also that regional inequality has increased considerably in Central and Eastern Europe (CEE); in new member states as well as outside the EU.