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Convergence of the EU Member States in Central-Eastern and South Eastern Europe (EU11): A Framework for Convergence Inside a Close Regional Cooperation

In: Does EU Membership Facilitate Convergence? The Experience of the EU's Eastern Enlargement - Volume I

Author

Listed:
  • István P. Székely

    (DG ECFIN, European Commission
    Corvinus University of Budapest)

  • Robert Kuenzel

    (DG ECFIN, European Commission)

Abstract

This chapter offers a framework to analyse the impact of EU membership on economic (“means”), institutional (“ways”) and social (“ends”) convergence of EU11 countries to the frontier. It identifies the channels through which this impact works: trade, investment, finance, migration and institutions. Using this framework, the analysis finds that EU membership shaped the convergence process in important ways. EU11 countries as a group were among the fastest converging countries in the world. The main drivers were trade and FDI. However, the finance channel injected volatility into the convergence process. Through the trade, investment and finance channels, EU membership unleashed strong market forces. However, the institutional channel remained weak, and institutional convergence lagged behind economic convergence. Thus, the unleashed market forces also caused negative side effects. Rapid economic convergence did not translate into a commensurate social convergence. Moreover, fast economic convergence also brought about major imbalances and vulnerabilities. Slow social convergence and imbalances in economic convergence may in turn jeopardise the sustainability of the rapid economic convergence the region has achieved so far.

Suggested Citation

  • István P. Székely & Robert Kuenzel, 2021. "Convergence of the EU Member States in Central-Eastern and South Eastern Europe (EU11): A Framework for Convergence Inside a Close Regional Cooperation," Studies in Economic Transition, in: Michael Landesmann & István P. Székely (ed.), Does EU Membership Facilitate Convergence? The Experience of the EU's Eastern Enlargement - Volume I, chapter 0, pages 27-90, Palgrave Macmillan.
    • Handle: RePEc:pal:stuchp:978-3-030-57686-8_2
    DOI: 10.1007/978-3-030-57686-8_2
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    Cited by:

    1. Golub, A. & Potashnikov, V., 2022. "Theoretical analysis of development traps: On the example of Russia," Journal of the New Economic Association, New Economic Association, vol. 54(2), pages 56-74.

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