A CLOSE LOOK AT THE CONVERGENCE PATTERNS IN THE EUROPEAN UNION AT THE BEGINNING OF THE 21st CENTURY
Ana-Maria HOLOBIUC
Bucharest University of Economic Studies, Romania
Abstract: Since the first initiatives of integration on the European continent, promoting economic, social and territorial cohesion has remained one of the key principles of the European Union. Over the past decades, the stability and prosperity of the European continent was threatened by diverse and turbulent events, ranging from economic and financial turmoil to sanitary and social crises, which have emphasized the need to strengthen the cohesion between Members. The aim of this paper is to study the economic landscape of the European Union by looking at the evolution of the GDP per capita between 2000 and 2022. Using β- and σ-convergence, we have tried to answer the question if the European Union has come closer to the objective of cohesion in the last two decades. By applying cross-sectional regressions in order to estimate β-convergence, we have identified a convergence speed of 2% for European Union between 2000 and 2022, with higher growth rates experienced by the new member states from Central and Eastern Europe. Complementary, σ-convergence illustrates that income divergences generally decreased both at the aggregate level and in the case of the new member states. However, the progress achieved in terms of cohesion was reversed by Covid-19 pandemic, the gaps significantly increasing mainly in the case of the old members. Considering the divergences that still persist in the European Union, being emphasized by the recent crises, this paper suggests that political decision-makers should strengthen the measures oriented towards promoting cohesion, with the purpose to avoid the division on the continent.
Keywords: European Union, real convergence, cohesion, β-convergence, σ-convergence, Covid-19 pandemic.
