Challenges For Regional Convergence In The European Union

The European Union has overcome complex challenges since its foundation, being considered a successful story and a guarantor of political and economic stability within the European continent. However, the subsequent waves of enlargement of the European group have been accompanied by an increase of economic and social disparities between countries and regions. The main purpose of this paper is to study income convergence in the European Union by focusing on the regions at NUTS 2 level. In this respect, we have tested the neoclassical growth model assumptions, using the (unconditional) β- and σ-convergence indicators for 236 regions between 2000 and 2018. We have also tried to identify the winning regions of the catching-up process in entral and Eastern Europe. Our study confirms the neoclassical growth model assumptions considering that the less developed regions from Central and Eastern Europe experienced higher GDP growth rates than the developed ones. However, in some Central and Eastern European countries, the improvement of the economic performances of the capitals was accompanied by an increase of income disparities at national level. Overall, our study suggests that Central and Eastern European regions have made impressive progress since 2000, the main winners being the capitals. In contrast, some of the regions from Southern Europe are on a downward path, with negative growth rates, which pose into question the objective of convergence in the European Union.