European Socio-Economic Integration by Elias G. Carayannis & George M. Korres

Author:Elias G. Carayannis & George M. Korres
Language: eng
Format: epub
Publisher: Springer US, Boston, MA

8.2 European Union: Looking at Regional Convergence

Since its establishment, the European Union has experienced wide ranging and in depth integration. Considering the deepening aspect, the European Economic and Monetary Union (EMU) in 1999 and the circulation of the new common ­currency—the euro—since 1.1.2002 are the most momentous achievements. Concerning the widening process, the 2004 enlargement was the most conspicuous in the EU’s history. The ten new members are now adequately integrated in the single market, and some of them have already adopted the euro as well. The final goal of the EU—to be achieved through the common market and the economic and monetary union—also includes economic and social cohesion, both between members (as the mention of solidarity would indicate) and within themselves.

At this point, special attention is given to the connection between regional growth and spatial development both in the regional economic and the economic geography literature, with elements drawn from economic growth theories. The development of these geographic and economic patterns is closely linked to questions of economic con- or divergence as well as the reduction of regional disparities.

Endogenous growth theories on the other hand explain how rich economies (endowed with human capital and higher R&D activities) can sustain high rates of growth and generally predict divergence of regional growth, but less so with integration. Broadly speaking, one can identify two conflicting hypotheses in the theoretical literature on economic growth: the optimist one, claiming that technological improvements operate in such a way that, in the presence of free trade and relatively unrestrained market competition, economic convergence eventually takes place, and the pessimist one, claiming that the nature of modern technologies is such that market forces, when left to themselves, lead almost unavoidably to inequality and divergence (Fig. 8.1).

Fig. 8.1European Union (25) after the 2004 enlargement (Source: European Union Web site)

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