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1 May 2024 marks the 20th anniversary of the EU accession of eight economies where the European Bank for Reconstruction and Development (EBRD) invests – Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia. They were followed by Bulgaria and Romania in 2007 and Croatia in 2013.
A new EBRD study examines the experience of these eight countries in terms of income convergence, comparing their progress to that observed in other economies at similar levels of development that did not join the European Union. It also looks at gains in terms of health and life satisfaction over the last 20 years, following up on the analysis in the latest Transition Report. Further analysis will be presented in the upcoming Regional Economic Prospects, which will be launched on 15 May.
EU accession led to rapid growth of per capita incomes. Using Germany as a comparator, GDP per capita in the 2004 accession countries increased, as a share of Germany’s, from 26 per cent 2003 to 50 per cent by 2023 (at market exchange rates). Lower-income economies tended to enjoy faster income convergence: Bulgaria and Romania, which joined the EU in 2007, more than tripled their per capita incomes as a share of Germany’s over this period.
This performance is notable when compared with the speed at which other emerging markets at similar levels of development were converging with advanced economies. Of the 24 percentage points of growth observed by the accession countries over the 20 years, 10 of those percentage points are shared with other emerging markets with similar characteristics, while the remaining 14 percentage points can be thought of as an “EU accession bonus”.
This EU accession bonus was facilitated by the rapid growth of exports relative to GDP as these economies became deeply integrated into European and global supply chains. In contrast, exports-to-GDP have been broadly flat among comparator economies during the last 20 years. |
