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European Union (EU) central and eastern economies have gone through a process of structural change since 1989, when the post-communist transition started. This process was afterwards reinforced by the three EU enlargement waves that took place in 2004, 2007 and 2013. Though exhibiting low levels of aggregate productivity, this group of countries joined the EU with higher levels of human capital than the southern member states, an advantage that should have accelerated real convergence towards the EU15. However, evidence to date suggests that the convergence process came to a halt in 2007–2008 when massive capital inflows stopped, highlighting the fragilities of the growth strategies implemented so far. In these peripheral countries, structural change has been characterised by an expanding services sector alongside growing income inequality. The two strands of literature on these issues highlight that: (a) an expanding services sector may not be detrimental for growth, quite the opposite, depending on services composition and on the capacity of services sub-sectors to incorporate information and communication technologies (ICTs); and (b) inequality is negatively related to growth through the fiscal policy, socio-political instability, borrowing constraints to investment in education and endogenous fertility channels and positively through the savings channel and incentives. We analyse the nexus between structural change, inequality and growth in this group of countries highlighting income inequality as a potential mechanism that connects the other two variables. We provide a descriptive quantitative analysis of the profiles of structural change and income inequality in our sample and apply dynamic panel methods to investigate the existence of causality among services sector expansion, inequality and aggregate productivity considering a maximum period between 1980 and 2010.

The main aim of this chapter is to analyse whether recent economic developments in Central and Eastern European countries have been subjected to a typical process of Dutch Disease (DD). We investigate the impact of foreign aid and other external inflows on the economies of these countries through their effect on the real exchange rate (RER).

After a review of the literature on the DD, we apply robust new generation augmented Dickey-Fuller (ADF) tests, and autoregressive distributed lag models following the methodology of Arellano and Bond (1991) and Blundell and Bond (1998) to establish the impact of capital inflows on output growth for the period 2003–2013.

We find no significant role for financial costs in the determination of the RER in the integration process of these countries. The evidence supports a positive influence of external capital inflows, and in particular European structural funds, on the determination of RER. This positive influence also extends to non-tradable goods and public investments.

In order to promote medium-long run sustainability, Central and Eastern European countries should carefully apply European funds in a way that does not bring about higher internal prices, or, if possible, control the nominal exchange rate in accordance. They must invest more in the higher qualification of human resources, research and development, innovation, entrepreneurship and industrial clusters, in view of the development of the tradable sector.

It is the first chapter that analyses the presence of DD originated by European structural funds and external inflows of funds for this group of countries.

The recent European crisis has raised a number of concerns among economists about the persistence of significant productive and competitiveness differences across national economies within the European Union (EU). Such differences can be seen as both a major root cause underlying the crisis and as an important factor explaining the current political difficulties within the EU.

The big divide between core and periphery is taken into account in this chapter, which focuses on the processes of structural transformation in the European periphery. We intend to contribute to a better understanding of structural changes in Europe and of their potential impact on future growth prospects and overall convergence/divergence dynamics.

A comparison of the experiences of two groups of peripheral countries is undertaken, based on a sample of old member states of Southwestern Europe and of new member states of Eastern Europe. A descriptive analysis is made of the trends occurred in the structure of production, employment and trade, examining this evidence in the light of technology and skill-based industrial classifications. Comparisons are made for both the pre and post-crisis periods.

Changes in the economic structure towards more skill- and technology-intensive sectors were relatively modest in Southwest Europe, whereas they increased rapidly in Eastern Europe. Notwithstanding, both groups of countries have experienced a strong deterioration of the growth dynamics after 2008, which seems to reflect the strong emphasis of economic policy on financial market stabilisation and a relative neglect of policies targeted to the recovery of investment and to the reinforcement of exporting capacities.

The solution to overcome economic retardation requires inevitably export-led growth and the building up of a more competitive economy. This, in turn, requires the design of an adequate industrial policy.

The theoretical contribution provided by the transitional theories has fundamentally helped develop a better understanding of the migration process, by showing how migration is interacting with other processes of development. They show that along with development, emigration is following an upside down ‘U’ shaped pattern, being overreached by immigration, while the region changes its migration profile from emigration to immigration. This was the case for the southern European states, which followed a rapid migration transition during the second half of the twentieth century. After large emigration to Western and Northern Europe, these managed to attract large immigration flows from the less developed countries in Africa and Latin America, but also from Eastern Europe after the fall of communist regimes. This chapter aims to test whether Eastern Europe is heading to the same migration transition pattern as the South and change their current status of net migration provider. Thus, the impact of the migration transition drivers in explaining net migration balance is analysed using a panel data for the 2000–2013 period. As a country can encompass both emigration and immigration regions, the current analysis is carried out at European Union (EU) regional level data (NUTS II), while controlling for the regional specifics and unobserved time effects. Overall, most of the factors which led to the migration shift, from emigration to immigration, in Southern Europe were proven to be fundamental at EU regional level as well. Migration flows were shown to be more sensitive to unemployment, urbanisation, segmentation of the labour market and active population share in the eastern as compared to the southern European regions. Nevertheless, accessing the transition drivers evolution during 2011–2013 period, eastern regions are still highly unattractive and their chances for becoming destination regions are currently at low levels.

The unequal distribution of economic activities, transposed in economic, social and territorial disparities is the general characteristic of the European economy. Gaps increased in the context of European Union (EU) enlargement towards Eastern and Central Europe and of the economic crisis, thus bringing new differentiations among member states’ economies. The main aim of the chapter is to emphasise the centre-periphery differentiations in the European economy, by using a composite index of peripherality, in order to better understand the determinants of growth and convergence in Central and Eastern European countries and to reach normative conclusions for increasing Cohesion Policy (CP) effectiveness. The first part of the chapter provides a short overview of the main theories and models of the peripherality analysis and the relationships between the centre and the periphery, in order to find out how this analysis relates to the research in the field. The second part provides a comparative analysis of the evolution of European economies during 2003–2014, in order to find out whether the EU enlargement process stabilised the EU core-periphery pattern or, on the contrary, the process of core-periphery structural convergence occurred. The third part includes the suggested model of analysis (methodology, data, and main results) from a multidisciplinary perspective, underlining the centre-periphery differentiations on the two axes, North–South and West–East. The results have been interpreted in conclusions, with a focus on their relevance for the European CP challenges.

The last enlargements of the European Union (EU) shifted the geographical focus of the periphery from the south to the east, upgrading the position of many southern European countries and regions, which were already in a process of convergence with the EU average. The current financial/economic crisis, however, which has particularly hit southern European countries, revitalized the traditional core-periphery division, known as the North-South divide. In parallel, the relocation of economic activity (industrial production and services) within the EU territory, from western-core countries to the eastern periphery, raised the competitiveness and economic significance of many areas in the new, vis-a-vis the old, periphery, leading to the emergence of a number of new centres in its metropolitan regions. A number of questions are raised in the context of the above development, such as: Which factors underlie the differences in growth paths and ‘resilience’ between the eastern vis-à-vis the southern periphery? How important has the industrial relocation from the West to the East been? And what has been the general impact of the EU’s Cohesion Policy? What would the implications of a possible further expansion towards the EU’s ‘Eastern Neighbours’ be on its core-periphery pattern? This chapter approaches critically some of the above issues, adopting a qualitative methodology with the use of graphical presentations. In its conclusions, the chapter examines the appropriateness of the new economic geography’s theoretical interpretation.

This chapter contributes to the conceptual effort to find an ‘encompassing framework’ to understand the rugged landscape of territorial development. A paradigmatic shift is in need to reflect the gains from trade increasingly as a result of territorial communality rather than market optimality.

This contribution reviews first the tenets of the core-periphery models premised on three interpretations of space, that is, uniform-abstract space, diversified-relational space and uniform-stylised space. The conventional (spatial) models of peripherality are increasingly questionable when considering the relevance of more appropriate ‘aspatial’ concepts for understanding the conditions for growth and development across territories.

The conclusions emphasise the need to drop the norm of a universal policy related to a space of development divided in advanced and lagging areas. The implications range from re-stating the unit of analysis to re-stating the role of policy coordination in a multi-core integration environment.

This chapter attempts to evade the ‘illusion’ of the coincidence of political space with economic and human space. We aim at gaining ground towards a framework of analysing development that substitutes relational specificity of local economies for uniform territories of aggregate socio-economic features.