The role of the European Union in fostering convergence

Growth, Europe and togetherness are the three necessary elements to accomplish what the Treaty on European Union (EU) promises: economic and social cohesion. This chapter reviews the current state of convergence of Central, Eastern and Southeastern European (CESEE) economies. It then discusses how three key European policy areas can help to accelerate convergence and thereby also foster cohesion: the completion of the Single Market, the launch of a true capital markets union and the targeted use of EU funds. It concludes that convergence requires joint efforts and responsibility. It requires Member States to translate EU initiatives and recommendations into concrete and positive effects on the ground, and candidate countries and potential candidates to achieve institutional excellence as early as possible in the transition process. But accelerating convergence also requires the EU, and the euro area in particular, to help underwrite this process.