Real Convergence in the European Union: Insightful Evidence from the New Member States

The European Economic Communities have been established in the second half of the last century in order to promote cooperation instead of confrontation, endowing the Western European countries with the appropriate means to perform the values of a modern economic integration process, based on sustainable and long-term development. With the advancement of the integration process, one of the main objectives of the European Union aimed the economic, social and territorial convergence between and within countries and regions. The main purpose of the paper is to study income convergence in the European Union between 1995 and 2018, using ) beta- and sigma-convergence indicators. The results of our study confirm the (absolute) beta-convergence hypothesis, as poorer European countries experienced a higher catching-up speed comparing to the developed Member States from Western Europe. Furthermore, the catching-up process in the New Member States was accompanied by a reduction in the income gaps between countries (sigma-convergence). These trends are encouraging for the European Union and confirm its potential to assure economic convergence between its Members.