Gergely Hudecz (on the staff of the European Stability Mechanism) presented the results of research, undertaken with Edmund Moshammer and Thomas Wieser, on the evolution of disparities across European sub-national regions, over the medium term and in response to the COVID-19 crisis. (Detailed results are available in Hudecz, G., Moshammer, E. and Wieser, T. (2020), “Regional disparities in Europe: should we be concerned?” ESM Discussion Paper 13.) They look at income and employment in individual regions, investigating what factors have contributed to relatively good performance and where there has been convergence or divergence. On this basis they offer suggestions on what policies might be effective in helping weaker regions catch up and share in the benefits of integration.
Regarding developments since the turn of the century, they find a complex picture: there has been a tendency for relatively poor countries to grow relatively quickly, and in particular the “new” EU member states have converged towards the mean. However, performance differences within countries have been pronounced, not least in the “old” member states. The differences do not fall into a simple urban/rural or north/south divide. Rather, the ex-urban areas surrounding vibrant metropolitan centres seem to have been most successful in attracting well-paying jobs in expanding, knowledge-based sectors. The research suggests that education levels and also the quality of local administration contribute to regional success, as does labour force flexibility, but no one factor is sufficient in itself: investment in education, for example, may facilitate emigration if attractive local jobs are not available. A weak region risks entering a vicious circle of poor growth, emigration, and lack of resources for public goods such as human capital, infrastructure, and efficient administration.
