Friday, 25 February 2011

Europe's East-West Divide

Eurostat has recently published statistics that show the richest and poorest regions inside the European Union (thanks to Greig Aitken for pointing this out.) These are based upon the GDP per inhabitant, expressed in terms of purchasing power standards, taken from the end of 2008. They show clearly how the major developmental divide inside the EU continues is between the Western and Eastern regions.

The richest regions of the EU tend to be situated in the centers of Western capital cities – with London leading the way. Of the 40 regions exceeding the 125% level only 2 were found in Central-Eastern European countries – in the Czech Republic and Slovakia. Prague is the only region in the whole of CEE that is situated in the 20 richest regions.

In contrast, all of the poorest regions inside the EU are located in CEE states. 11 of the most impoverished 20 regions are from Bulgaria or Romania. The remaining 9 are divided between Poland (5) and Hungary (4). The poorest region (Severozapaden in Bulgaria) has a GDP per inhabitant level that is just 28% of the European average.

As these statistics are from the end of 2008 and therefore they do not show the extent to which this situation has been worsened by the economic crisis.

Negotiations are set to start around the next EU budget – which comes into force from 2014. There is a need to increase the level of cohesion funds to the poorest regions of the EU in order to close the huge gap in living-standards inside the Union. With Romania and Bulgaria having joined the EU in 2007, they have yet to receive any significant funds. However, with many of the richer states looking to reduce their contributions then the poorer regions situated in CEE could find that the developmental gap between themselves and the rich regions in the West will grow.

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