Geopolitical Integration vs. fragmentation: the economic geography of disparities in Europe

Rising geopolitical tensions and emerging skepticism against globalization cast doubt on the future evolution of European regional economic growth. We simulate regional GDP growth rates for all NUTS2 regions in the EU27+UK for the period 2021–2035, using the MASST5 model, in two extreme scenarios; the first, termed “Cohesive EU in an Integrated World”; the second, labeled “Nationalistic EU in a Fragmented World”. Results document substantial spatial heterogeneity in the outcomes of the two scenarios, with Integration leading to superior economic performance but at the cost of increasing regional disparities triggered by higher growth opportunities for national champions.