The EU-20: economic convergence or divergence? An analysis of the retention capacity of productivity increases

Abstract

Among the formal objectives stated in the fundamental treaties of the European Union (EU) are the social welfare of its Member States and their ultimate economic convergence. However, since the outbreak of the 2008 economic crisis, differences among EU countries have grown more pronounced, thus questioning the achievement of those goals and prompting the identification of certain less visible phenomena that may indicate spurious convergence. One example is the difficulty of some Members in retaining advances in productivity – a characteristic that Latin American Structuralism and Dependency Theory have associated with an economy’s peripheral position. Here we analyse for the EU-20, between 1995 and 2014, the convergence (or divergence) demonstrated in terms of labour productivity and real wages. Our intention is to determine whether the EU periphery experiences greater difficulties than do the central countries of the EU in retaining productivity gains internally. In short, we articulate a proposal based in the study of Convergence, but from an approach that may be framed as ‘Uneven development’.