"Post-communist Europe" after 20 years in the EU - Economic growth and convergence

TLDR

Mariusz Próchniak and Ryszard Rapacki, in their European Policy Analysis report for the Swedish Institute for European Policy Studies (SIEPS), examine the economic growth and income convergence of Central and Eastern European (CEE11) countries that joined the EU between 2004 and 2013. Their findings highlight the CEE11's success in narrowing developmental gaps with the EU15, mainly due to EU integration, institutional reforms, and financial support. However, current EU candidate countries in Southeast Europe and the post-Soviet region (SEE8) face greater obstacles, including weaker institutions and economic vulnerabilities. The authors call for tailored EU support and comprehensive reforms in these nations to replicate the success of the CEE11.
 
 

Economic Growth and Convergence

In their report, Próchniak and Rapacki document how the CEE11 countries—comprising Poland, Hungary, the Baltic states, and others—significantly improved their economic standing after EU accession. By 2023, these nations had increased their GDP per capita from 44.5% to 75.3% of the EU15 average. This convergence was driven by higher annual GDP growth rates (3.2%) compared to the EU15 (1.1%).
 
EU membership proved transformative, acting as an "anchor" for reforms, fostering institutional improvements, and enabling access to structural funds and foreign investment. Poland, Romania, and the Baltic states emerged as top performers, benefiting from resilience to external shocks like the 2008 financial crisis and the COVID-19 pandemic.
 
 
The report attributes this progress to several factors. EU integration facilitated technology transfers, market access, and increased trade openness. Institutional reforms improved governance and economic freedom, as evidenced by better scores on indices like Transparency International's Corruption Perception Index and the Heritage Foundation's Economic Freedom Index. Collectively, these factors created an environment conducive to sustainable growth and development.
 
 

Challenges for the SEE8

Próchniak and Rapacki compare the success of the CEE11 with the slower progress of current EU candidates in Southeast Europe and the post-Soviet region (SEE8), including Albania, Bosnia and Herzegovina, and Ukraine. The SEE8 faces significantly lower GDP per capita, weaker institutions, and greater economic volatility.
 
 
For instance, the SEE8's average GDP per capita in 2023 was only 28.6% of the EU15's, compared to 44.5% for the CEE11 in 2004. Institutional shortcomings, such as high corruption and inefficient governance, hinder their progress.
 
The authors emphasize that "integration anchoring"—the alignment of reforms with EU standards—has been weaker in the SEE8, resulting in slower income convergence. They argue that without substantial institutional and economic reforms, the SEE8 will struggle to replicate the growth trajectories of the CEE11.
 
 

Concluding Reflections

Próchniak and Rapacki conclude that the CEE11's experience underscores the transformative potential of EU membership. Still, the path to success requires institutional strength, governance reforms, and economic liberalization. For the SEE8, targeted EU support and tailored strategies are essential to address their unique challenges, such as socio-economic disparities and political instability. The authors' work serves as both a success story for past enlargements and a roadmap for future ones, highlighting the EU's role as a driver of economic and social convergence.
 
Thanks for reading. Please follow my blog and write your feedback.