EUROPEAN INTEGRATION AND REGIONAL GROWTH

This objective of this paper is to assess whether the process of European integration has reduced income disparities among regions in the Community. We observe that if the South of Europe seems to catch up in the early eighties, it stagnates, at best, in the second part of the eighties. At the opposite, the regions in the North of Europe tend to stagnate or diverge in the first part of the eighties but converge strongly thereafter. This pattern is consistent with the view that Northern European countries have adjusted better to the implementation of the internal market programme and the entry of the Iberian peninsula in the Community in 1985. This evidence also lends support to the view that trade liberalisation can exacerbate disparities. Preliminary evidence suggests that a lack of adjustment in regional labour markets may explain this pattern.