The Speeds of Europe - An Analysis of Regional Disparities Across the EU

This paper aims to shed light on the evolution of regional disparities with respect to economic activity, productivity and employment across the European Union. While the "multiple Speeds of Europe" are a buzzword often quoted to underpin different political strategies and visions, they are usually not connected to an analysis of the actual inequalities and the existing trends. We employ the Theil index of concentration to conduct such an analysis for 191 EU regions from 1991 to 2014, showing the evolution of disparities in terms of regional GVA, labour productivity and employment, both on the between country and within country level. We find a descending trend in disparities following each enlargement period after 2004, which has however slowed down in the wake of the recession and has since been outpaced by the speed of EU enlargement. The differences in economic activity across Europe are driven by labour productivity disparities between EU-27 Member States; however, across the core Member States, we observe a dramatic increase in employment disparities that have been pushing inequality upwards over the last decade. On a regional level, aggregate within-country inequality is determined by employment differences between regions. Nevertheless, there are large increases in inequality as regards the distribution of regional productivity in selected Member States, which fit the hypothesis of spatially concentrated productive hubs against a backdrop of regional polarisation. In order to reflect the socioeconomic reality across the European Union, both the discourse on development and the policies aiming at convergence need to become more nuanced.