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bne December 2019 30 Years of transition I 41
The East-West convergence in numbers
constant 2010 US$, however, the Central European countries are still behind as
of 2018, though the Czech Republic and Slovakia at least were not far behind the poorest southern European countries.)
A report prepared last year by the Centre for European Policy Studies (CEPS) think tank for EU finance ministers, and quoted by Reuters, looked at growth
of real income per capita, also finding that while the east-west gap in the EU has narrowed, a north-south gap has opened up since the international economic crisis that started in 2008.
“This pattern, reflecting East-West convergence but North-South diver- gence within the euro area, can be observed for a number of indicators, such as real wages, investment and consumption,” said the CEPS analysis.
Impending slowdown
As another international slowdown looms, the relative lack of impact so far on Central Europe compared to Western Europe has raised speculation as to whether this could promote convergence by slowing down the western EU members relative to their peers to the East, or if all of Europe will be dragged down eventually.
“I think right now it is actually good
for convergence because there is a very severe slowdown in Western Europe, especially Germany, and our region is still growing pretty fast,” said Vasily Astrov, economist at the Vienna Institute for International Economic Studies (wiiw) in a webinar on November 6.
Thus far, Central and Southeast European countries have continued
Clare Nuttall in Glasgow
30 years after the fall of the
Berlin Wall most indicators show that the new EU members from the former Eastern Bloc haven’t yet caught up with Western Europe – but
in a number of aspects they have caught up with or even overtaken the Southern European states that joined the EU
in the previous wave of accessions
and were battered by the international economic crisis that started a decade ago.
Starting with the basics, a look at GDP per capita shows that there
has been a remarkable catch-up
by the six Central and Southeast European states that emerged from communism in 1989-1990 – Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia – compared
to the West European countries that were EU members at that time.
“It’s not full convergence – perhaps it would have been unrealistic to expect full convergence within 30 years – but enormous progress has been made,” said European Bank for Reconstruction and Development (EBRD) chief econo-
mist Beata Javorcik in an interview with bne IntelliNews for this series. "Nine Central European countries are now officially classed as high income countries by the World Bank; they have reached about two-thirds of the income level of the OECD countries.”
A comparison of World Bank data on GDP per capita based on purchasing power parity (PPP) (constant 2011 international $) from 1992 and 2018 puts the Czech Republic, Slovakia and Poland now ahead of Portugal and Greece, while at the start of
the transition period all of the West
“It’s not full convergence – perhaps it would have been unrealistic to expect full convergence within 30 years – but enormous progress has been made”
European counties were ahead of those in Central Europe. (Looking at gross national income (GNI) per capita at
to grow, with growth driven by the boom in domestic private consumption. “Domestic demand is not that badly
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