Exploring Economic Convergence and Political Disparities: Insights from our Comparative EU Study

Roberto Morea & Tatiana Moutinho

The conference “100 Shades of the EU:The Political Economy of the EU Peripheries between Pandemic and War”, held in April in Trieste, advanced the academic and political discussion initiated by the eponymous study published by transform! europe last year. Our facilitator Roberto Morea spoke to conference organiser Tatiana Moutinho.

The conference “Hundred Shades of the EU: The Political Economy of the EU Peripheries between Pandemic and War” was held in Trieste on April 3 and 4 by transform! europe together with CGIL and the Rosa-Luxemburg-Foundation. Its objective was to discuss the economies and their transformation during the recent phase of European integration by building upon the study Hundred Shades of the EU — Mapping the Political Economy of the EU Peripheries published by transform! europe in 2022.

Initially centered on the “Mediterranean  issue” and the analysis of the socioeconomic conditions in southern European countries (PIGS), the original study aimed to challenge misconceptions and to devise shared strategies. As the project advanced, the authors broadened the scope of their investigation to include Eastern European EU states that were former members of the Warsaw Pact bloc. Eventually, the study also encompassed Balkan EU-member countries, namely Slovenia, Croatia, Hungary, Romania and Bulgaria. The findings of the study revealed an intricate and multifaceted economic model intertwined with national characteristics. The authors highlighted varying regional capacities and social impacts despite integrated production chains.

The study was coordinated by Dagmar Švendová, responsible for Central and Eastern European Strategy and Tatiana Moutinho, transform! europe facilitator in the programme “Cooperation Strategies for Southern Europe”. Tatiana Moutinho also organised the conference in Trieste. Roberto Morea spoke with her on both the study and the conference.

Roberto Morea: What were the premises and intentions of the transnational study Hundred Shades of the EU — Mapping the Political Economy of the EU Peripheries?

Tatiana Moutinho: The study we conducted was built around the three main axes that we had identified. The first axis focuses on the economy, encompassing economic policies and activities within two regions. One region is the Southern Mediterranean one, comprising six countries, including Malta and Cyprus. The other region is Central and Eastern Europe, comprised of multiple countries which can be further regrouped into two subregions, as described in the publication. The economies of this second region, Central and Eastern Europe, can generally be characterised as experiencing some imperfect convergence towards the core countries of the EU.

But we were also able to observe diverging trends in the countries of the South — the case of Italy is paradigmatic. The entry into the euro zone (European Monetary Union) has triggered for all these economies a decline in their industrial power. This, along with the financial crisis of 2009 and the austerity policies, was the final blow that dramatically exacerbated divergences.

It becomes evident that the European Union is far from being a process of convergence and solidarity among its member states. This disparity is apparent not only in economic terms but also in the underrepresentation of the peripheries throughout the EU institutions. This aspect forms the second axis of our study, where we delve into a thorough examination of the representation of these regions in the EU. We also observe that political differences between Southern and Eastern European countries are multiple, making it challenging to establish alliances between these regions.

The study’s third axis focuses on ideological representations and cultural perceptions of the peripheries within the European Union. It is evident that the way these regions are depicted, i.e. through the constructed lens of “Otherness”, is not solely a result of the so far unsuccessful integration process, but also further accentuates the divergence between core and peripheral countries. Our most challenging task now is to translate these analyses into policy proposals.

The conference in Trieste initiated a political discussion based on these analyses. It is important to note that this research was launched during the pandemic, and, while the evolution of economies was uncertain at that time, it primarily refers to the state of affairs up until 2019. Today in 2023, the effects of the pandemic have become clearer, and the outbreak of the war in February 2022 has been a turning point both economically and politically. Therefore, our further objective with the conference was to understand the impact of these two events on the EU peripheries.

Will the upcoming steps of the “100 Shades of the EU” initiative focus on the same countries?

Our forthcoming work is to focus on the same countries we analysed thus far. However, we are considering expanding our scope in the future to include countries that are in the process of joining the EU. It would be valuable to understand the economic developments in those areas as well. Such an expansion of our scope would provide insight into how new countries become peripheral economies and how the EU enlargement leads to increased competition among states. This would allow us to anticipate the consequences. Drawing from my experience with Portugal, where the EU accession process began in the 1980s, there are many similarities between Portugal’s path to the EU and the later developments experienced by Eastern countries. These shared characteristics include de-industrialisation and the gradual shift towards peripheral economies. I recall how the Portuguese textile industry, renowned for producing high-quality garments, was faced with new challenges due to a competition based primarily on wage compression. As Eastern countries entered the common market, factories were relocated to those countries, as they offered even lower wages than Portugal.

This appears to be an ongoing narrative, which also emerged during the intervention of FIOM representatives from Fincantieri in Trieste…

Yes, exactly – union representatives shared how a sector like large engines, which was acquired by a Finnish company, is now being closed down to make way for a sister plant in Finland, where machinery and contracts will be transferred. This means not only an economic loss, but also the loss of the expertise and professionalism embodied by the workers themselves. In fact, this pattern is being replicated across Europe with slight variations but remarkable consistency.

Furthermore, the political landscape itself highlights disparities between both regions. While the countries of the South, with the exception of Italy, are marked by a strong presence of the Left, the Left is by contrast nearly absent in Eastern European countries. Instead, right-wing and far-right political forces are gaining ground across the board. Such circumstances arise when political and economic solutions fail to incorporate elements of social justice, leading to a popular discontent that doesn’t necessarily align with left-wing ideologies. Future developments will shed light on this, but ultimately, an EU that is completely unbalanced between the core and the periphery will be detrimental to everyone, including to the countries at the forefront of Europe’s productive system. This holds true especially for the working class, as the elites—whether they belong to the periphery or the heartland of production — stay firmly in place and do not bear the burden of the disparities between the core and the periphery!

What was your impression of the event in Trieste? 

I believe it was an excellent and captivating event, both in terms of its content and regarding the organisation of the sessions. It encompassed academic discussions as well as more politically-oriented gatherings involving activists and journalists. On a personal note, I found this heterogeneous combination to be intriguing. 

Furthermore, it has become apparent in our research that there is a general lack of awareness about the developments in other countries and about the diverse realities of the two regions we examined, which both are part of the peripheralisation process. Therefore, it is crucial to establish connections and exchange about our different experiences.

Thank you, Tatiana, and congratulations on your work. I also feel a small connection to it as I initiated this path in Lisbon five years ago with the presentation of the “Coalition of Labour” project.

Indeed, and it was encouraging to see our comrades from Eastern Europe also taking part in that event. They recognised that what was happening there was not merely a local matter but a shared process.