52nd Congress of the European Regional Science Association: "Regions in Motion - Breaking the Path", 21-25 August 2012, Bratislava, Slovakia
Europe as we know it, the European Union of 27 countries, has evolved from the European Coal and Steel Union of a few developed countries in a comprehensive economic and political union, which now embraces and unites most of the European continent (EU 2011). Each successive transformation and enlargement of the Union has brought in new people and countries with large differences and particularities. Countries of southern Europe and later the former eastern socialist republics joined the initial core of the developed Western economies. Today, between countries of the European Union, different zones are distinguished in relation to levels of economic and social development. One group consists of the prosperous western and northern economies and includes countries such as Germany, Finland, the Netherlands, or Denmark. The second group includes regional and Mediterranean countries with less developed economies such as Spain, Portugal, Italy, Greece or Ireland. Finally, the third group includes countries of former Eastern economies, relatively weak, completing the transition from socialism to capitalism. In this group are countries such as Bulgaria, Poland, Romania, Latvia. The existence of many different countries in a broad geographic area designates the regional problem at three levels. The first level concerns the groups of countries mentioned above. At a second level variation exists within countries. Finally, at a third level, in the unified Europe, differences are between regions across national borders. Many studies argue that while disparities between member countries are decreasing gradually, the disparities within countries are increasing. As a result, the overall gap between the rich and developed regions on one hand and the less developed regions on the other hand is expanding. The current economic crisis has affected almost all European countries but the countries of the European south and the former eastern socialist republics have suffered the most. Our objective in this paper is to quantify regional disparities as expressed by several growth indicators, such as GDP per capita, employment/unemployment rates, household savings and use them to compare the regional disparities at the three levels described above before and after the crisis.