CEE still struggling for convergence with EU peers

By bne IntelliNews June 20, 2012

Tim Gosling in Prague -

Convergence with the developed economies of Western Europe was one of the biggest selling points for CEE voters in joining the EU in 2004 and 2007. However, growing skepticism in the region towards Brussels driven by the Eurozone crisis is unlikely to ease as figures show that the east end of Europe continues to lag significantly when it comes to economic output and the volume and value of cash in people's pockets.

Issuing its first preliminary estimates for 2011 GDP per capita - adapted by purchasing power - Eurostat notes that the results across member states range from 45% to 274% of the EU27 average. Most notably, not a single CEE state manages to join Italy and Spain - both beset by struggling economies and banks through last year - in recording average GDP per capita.

Slovenia and the Czech Republic were the top dogs in the region, joining Malta, Greece and Portugal with results 15%-25% below the average, whilst Slovakia was around 25% under the bar. That strongly suggests its not only economics driving attitudes, with the Czechs probably the most Euro-skpetic nation in the bloc and Slovakia continually complaining about having to help bail out "richer" EU members such as Greece.

Poland, perhaps the most enthusiastic supporter of the EU in the region, helps round out that theory, given that it falls well behind the CEE leaders with GDP per captia just 65% of the average. Estonia, Hungary, and Lithuania join the Poles in a category of countries 30-40% below, whilst Latvia brings up the rear in Central Europe and the Baltics with just 58% of the average.

However, dragging their feet even further behind, Romania at 49% and Bulgaria at 45% prop up the table, in stark contrast to economies to the west, and even well below member-in-waiting Croatia, which posts 61% of the average. Turkey also trumps the two countries that joined the EU in 2007 on 52%, however, SEE candidates and hopefuls Serbia, Montenegro, Macedonia, Albania and Bosnia and Herzegovina all lag at between 43-29% of the average.

The highest level of GDP per capita in the EU27 was recorded in Luxembourg with a level of more than two and a half times the EU27 average. The Netherlands came in 31% above the average, while Denmark, Sweden, Ireland and Austria were between 25% and 30% above. Finland, Belgium and Germany were between 15% and 20% above the average, while France and the United Kingdom were between 5% and 10% above.

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