Heading for Divergence? Regional Growth in Europe Reconsidered*

Abstract This article analyses regional growth in the European Union (EU) in the postwar period. We examine the levels and growth of per capita GDP for a sample of 70 regions, covering six of the EU Member States. We find that after a slow, but steady reduction of differences in GDP per capita across European regions during most of the post‐war period, there are now some signs of a reversal in this trend. This does not imply that differences in levels of productivity and income across European regions are now reduced to a negligible level. Rather, the explanation is that other variables, notably R&D effort, investment support from the EU, the structure of GDP and differences in unemployment have had a diverging impact. We also find some support for the idea of a ‘Europe at different speeds’, with at least three different ‘growth clubs’ characterized by different dynamics, productivity and unemployment levels.