Mind the Gap: European Policies Facing Centre-Periphery Development Gaps in the EU

Europe’s economic integration has had uneven distributional effects between core (Western and Northern Europe) and periphery (Eastern and Southern Europe). Several market-correcting instruments have been introduced by EU in order to mitigate such divergence, or further common developmental goals including cohesion policy, state aid measures, the Common agricultural policy, investments of the European Investment Bank and the EFSI. The distributive effects of such actions are assessed, finding that most policies have reinforced gaps among member states and did not serve longer term common European interests. In fact, such policies lack coherent guiding principles and reflect built-in bias in EU institutions and the dominating bargaining power of core countries. In order to raise the effectiveness of these instruments, the decision-making architecture of the EU must be reformed.