Assessing the Impact of Smart and Green Transition Policies on Spatial and National Income Inequalities in EU Countries

Green and digital transitions represent a dual strategic objective for the European Union (EU), requiring behavioral changes from citizens, markets, and state institutions. To support these transformations, the EU has developed an extensive policy framework that is backed by significant financial instruments. However, the existing research suggests that these transitions may exacerbate both spatial and socioeconomic inequalities, depending on country-specific conditions and institutional capacities. This paper investigates how environmental and technological contexts, alongside EU-transition-related policies, influence regional and income inequalities within the selected EU countries. Using panel data covering the period 2007–2020 and employing a Generalized Least Squares (GLS) estimator, the present study reveals the complex relationship between structural conditions, policy designs, and inequality outcomes. The results show that smart and green policies tend to mitigate spatial inequalities, though they are found to be less effective in addressing income inequalities. By contrast, the contextual dynamics of the twin transition, such as skill intensity, digital adoption, and emissions, exhibit mixed effects, sometimes reinforcing inequality. The findings underline the urgency of designing inclusive EU policies that combine green and smart transition measures while accounting for country- and region-specific challenges. Such an integrated approach is essential for ensuring that the twin transition strengthens social cohesion in Europe, rather than undermining it.