Embargoed till 00.01 Monday 30 July 2007
European Regional Press Release
Economic drivers expected to
reinforce Europe’s regional
divides
Europe has a core of rich regions, while poorer regions tend to be on the periphery
The regions of the EU display large wealth disparities between a core of rich regions and poorer peripheral regions. The core of rich regions starts at the river Rhein with the Dutch Randstad and Flanders, and continues to the Ruhr and Alsace into Switzerland. It then extends south through Rhône-Alpes and Provence-Alpes-Côte d’Azur into northern and central Italy; north into the south-east of England; and east into Bayern and most of Austria (see figure 1: GDP per Capita, 2005). There are only a few outliers to this core, with Bremen and Hamburg in northern Germany and the capital regions of the Nordic countries being the most obvious. On the British Isles, eastern Scotland, eastern Wales, Cheshire and south-eastern Ireland also stand out, while in north-eastern Spain (centred on Barcelona) economic growth is in sharp contrast to the rest of the country, with the exception of Madrid. Capital regions in general tend to have markedly higher GDP per capita than the EU27 average.
This core of rich regions, and the few outliers, also shape the divides in prosperity and economic performance within countries. The UK, the Netherlands, Belgium and Italy display a north-south divide, while Germany and Austria have an east-west divide, with the most prosperous regions bordering each other. Switzerland also shows a divide, where the regions bordering Germany and France are the most prosperous. Similarly, Spain shows a north-south divide between the regions in the north-east of the country, including Barcelona, and Madrid, and the rest of the country. France on the other hand displays no clear divides, instead being polycentric (see Table 1: Regional Wealth Divides Across Europe).
Meanwhile the highest concentration of disadvantaged regions is in the New Member states where GDP per capita is generally less than 75% of the average, the cut-off for receiving structural funding, and the Cohesion Fund countries, ie Spain, Greece and Portugal. In these more peripheral regions of Europe growth is centred on the capital regions. This development is beginning to spill over to surrounding regions, although in Poland regions nearer to the German border are also growing faster.
The divides in prosperity and economic performance are unlikely to narrow in the medium term
The more peripheral regions are unlikely to catch up with the rich core of Europe in the medium term. Regions with the fastest GDP per capita growth in the New Member states and the Cohesion Fund countries are experiencing catch-up growth (see figure 2: Real GDP Per Capita Growth, 2005-11). Although this might imply convergence to the EU average GDP per capita levels, the rationalisation and restructuring driving this growth is not a viable means of achieving growth over the longer term.
Growth in the medium term is more likely to take place in the already prosperous regions. This is because these regions also have higher economic potential and they will therefore continue to attract more investment than more peripheral regions further away from centres of economic activity. The already prosperous regions are better placed to take advantage of globalisation and so divergence is more likely to continue with the concentration and agglomeration of economic growth in the existing core of Europe.
This is consistent with studies of historical growth in Europe. Although convergence between countries in Europe may have taken place, there has been increasing divergence between the regions within countries.
Notes for Editors
Cambridge Econometrics prepares its European regional forecast in collaboration with a wide network of European institutes, including Cardiff Business School, CEDRES / FEP (Porto), CEET-Tomillo (Madrid), COWI (Lyngby), COWI Hungaria (Budapest), ECORYS-NEI (Rotterdam), Ecotec (Birmingham), FEEM (Turin), Ifo (Dresden and Munich), Infras (Zürich), IRPET (Florence), Russian Academy of Sciences (Moscow), SEGESA (Paris), University College Dublin, University of Barcelona, University of Bergen, University of Duisburg (Essen), University of Economics (Prague), University of Gdansk, Urban Research (Helsinki), Wifo (Vienna), and WSP Analysis & Strategy (Stockholm). Cambridge Econometrics has co-ordinated the production of the report ‘European Regional Prospects’ since 1991.
The European regional area of the Knowledge Base has three parts: Part 1 covers general macroeconomic, regional and urban trends; Part 2 contains sub-sections covering 46 city-regions around Europe (including Moscow); Part 3 contains tables of a range of regional indicators.
Price €3,385 (£2,335); also available as part of a European regional forecasting subscription service.
A reduced level of access, including Part 1 and three cities of choice from Part 2, is available for €885 (£610).
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