Chapter 4: It’s OK to Be Different: Policy Coordination and Economic Convergence

In the debate over the economic and political development of the European Union, the perception of growing economic divergence plays a key role. Economic convergence is a declared political objective of the Union. Article 174 of the Treaty on the Functioning of the European Union states that “The Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions” (European Union, 2012). There is a widespread view that economic convergence among the EU member states progressed until 2008, but that divergence seems to have prevailed since the outbreak of the global financial crisis and the eurozone debt crisis. At the same time, economic disparity and inequality within member states is a hotly debated topic. In fact, some aspects of convergence were not occurring even before the global financial crisis, as will be shown in this chapter.