THE STATE OF THE EUROPEAN UNION. Reforming Europe in a time of war

THE STATE OF THE EUROPEAN UNION 28 Looking at the overall picture back to 2008, apart from all Eastern European regions, the only regions that succeeded in improving their income positions signifi- cantly were Upper Palatinate (2019: 126 percent), Upper Franconia (114 percent), Berlin (123 percent) and Braun- schweig (146 percent) (see column 1). The reasons for this cannot be identified across the board. This also ap- plies to the few regions not losing (but also not gaining) in the period under review since 2008: Galicia (2019: 82 percent), Castilla y León (86 percent) and Extremadura (67 percent) in Spain; South Tyrol (155 percent), Puglia (62 percent) and Basilicata (75 percent) in Italy; southern Finland (99 percent), northern and eastern Finland (93 percent); and Övre Norrland (115 percent) in Sweden, for which no clear pattern of development emerges (see column 2). Double social and spatial dualism When socioeconomic differences are examined more closely at regional level, a clear dualism emerges be- tween successful regions in and around cities that are integrated into global value-added chains and outlying regions that have either not been able to cope with struc- tural change and suffer from the phenomenon of dein- dustrialisation or are highly rural and dominated by the agricultural economy.The transition to a service economy has promoted the formation and strengthening of region- al centres in and around large cities that are responsible for a large part of the nation-wide economic momentum and value creation. This is where comprehensive educa- tional opportunities (particularly opportunities for higher education) are concentrated, often in historically evolved structures – and where there is a variety of employment opportunities and a steady demand for labour shaped by economic activity. Here, infrastructure, public services and social benefits are usually well developed and life appears to be worth living and full of opportunities. The catchment areas of large and medium-sized cities are the biggest winners of the urbanisation process: in the respective country comparison, per capita incomes are highest on average and social problems are lowest. The drivers of economic momentum in the metropolises are modern industries integrated into global value chains, a knowledge-based service sector in the fields of finance and insurance, information and communications, and corporate and public service providers. Here, the trans- formation of the economic sectors and the acquisition of influence in the new European and global competitive Table 1 . No. of NUTS 2 regions with marked changes in GDP per capita. Source: Eurostat/own calculations. Countries: No. of NUTS 2 regions (1) 2019 Improvement of 10 or more percentage points compared with 2008/2015 (2) 2019 Improvement or deterioration of a maximum of 9 percentage points compared with 2008/2015 (3) 2019 Deterioration of 10 or more percentage points compared with 2008/2015 Germany (DE): 38 4 / 1 30 / 34 4 / 3 Estonia (EE): 1 1 / 0 0 / 1 0 / 0 Spain (ES): 19 0 / 0 3 / 19 16 / 0 France (FR): 22 - / 0 - / 22 - / 0 Italy (IT): 21 0 / 0 3 / 21 18 / 0 Romania (RO): 8 8 / 6 0 / 2 0 / 0 Finland (FI): 5 0 / 0 2 / 4 3 / 1 Sweden (SE): 8 0 / 0 1 / 6 7 / 2