Regional convergence in the European Union: From hypothesis to the actual trends

Economic convergence or non-convergence between countries and regions conti nues to attract analytical attention in Europe. To converge in real terms a nd not only in terms of nominal variables is one of the basic aims of the E uropean Union Treaty. A first objective of this paper is to offer an overvi ew on what is actually happening in the European Union in contrast to some generally accepted hypotheses and models predicting regional convergence. E mpirical evidence shows that after a period of (relative) regional converge nce in GDP per capita as well in terms of labour productivity, this process has almost completely ended. Possible explanations go from the most pro-co nvergence theories (optimists) to those that outweigh real obstacles to the oretical assumptions (pessimists). As a second objective the paper examines two important facts that can contribute to explaining the actual trends. T he first is named the 'national effect', where regions of each country have economic behaviour strongly linked to the national economy as a whole. The second is the 'differential' behaviour of many European regions in terms o f economic outcomes. Some suggestions and conclusions are drawn from the facts and the trends ob served in the European integration process.