The financial crisis of 2008 left many EU Member States struggling to overcome the lingering effects on their economies. How is the process of economic convergence going in the EU ten years later? On our 8th annual conference a distinguished group of economists, researchers and representatives from EU institutions examined this question looking at different parts of the EU, the impact of institutions and policy measures, alternative approaches such as the 'convergence of opportunities for people and firms' and the specific regional factors at play.
Cinzia Alcidi opens this issue with a look at trends in income convergence patterns in the EU. She finds that deeper economic integration does not necessarily lead to income convergence - in fact, full income convergence is not a realistic objective. Cristobal Ridao-Cano and Christian Bodewig suggest the EU should upgrade its 'convergence machine'. Using the 'equality of opportunity' principle, the authors argue that policies should focus on leveling opportunities and compensating for inequalities for both firms and people.
Regional factors may help provide insight into patterns that promote or hinder convergence. László Andor calls out the lack of social convergence in the convergence process in East-Central Europe that may undermine the continuation of strong economic performance in the future. The EU should pay attention to the East-West imbalances and consider strategies to address them. Giuseppe Celi, Dario Guarascio and Annamaria Simonazzi examine the roots of the EMU crisis and the impact of the response to it. They call for something like a 'Marshall Plan for Europe' that would help to coordinate efforts.
Barry Eichengreen looks at the Italian example and finds both convergence and divergence. The reason for this, so Eichengreen, is the mismatch between the country's inherited institutions and the requirements of new technology. Michael C. Burda also examines one country but focuses on different regions - the convergence of the new and old German 'Bundesländer'. Burda finds that while incomes per capita and standards of living have converged, value added per capita has not and shows little sign of doing so soon. And finally, while Charles Wyplosz looks at macroeconomic imbalances and cautions about Europe scapegoating itself, Mathias Dolls, Clemens Fuest, Carla Krolage, Florian Neumeier and Daniel Stöhlker propose strengthening national responsibility for the convergence process by giving Member States the possibility to propose a convergence roadmap in the context of the European Semester.
To the Forum