The Netherlands was the second most prosperous country in the European Union (EU) in 2011 after Luxembourg. Bulgaria and Romania are the least prosperous countries in the EU. Relative to 1995, the prosperity gap between the various EU countries has narrowed. This applies in particular to the prosperity gap between Eastern Europe and the rest of the European continent.
Netherlands in second place
The Netherlands was the second most prosperous country in 2011. The level of prosperity per capita in the Dutch population is more than 30 percent higher than the average across the European Union. In 1995, the Netherlands was in seventh place. The growth rate of the gross domestic product (GDP) in the Netherlands has been above average over the period 1995–2011, but the price level has increased less rapidly. Luxembourg has the highest standard of living in Europe and has made rapid strides towards a high level of prosperity between 1995 and 2011.
Substantial improvement standard of living in Eastern Europe
The prosperity gap between the EU countries has gradually narrowed compared to 1995. The relative level of prosperity varied most in Ireland. After a period of substantial improvement until 2007, the standard of living plummeted on account of the economic recession, but the Irish standard of living is still approximately 30 percent above the EU average.
The Eastern European standard of living has improved gradually since 1995 towards the EU average. The improvement is particularly manifest in the years prior to and immediately after joining the EU, although the countries in Eastern Europe are still less prosperous than the countries in Western and Southern Europe. The prosperity level has improved rapidly in the Baltic states. In 1995, the prosperity level in Estonia and Lithuania was still only one third of the EU average. Powerful economic growth brought the level up to two thirds of the EU average in 2011.
Prosperity level in Southern Europe crumbling
In the pre-recession years, Greece had already dropped just below the average EU prosperity level. Since then, the relative prosperity level in Greece has dropped dramatically; by no less than 15 percent over the past two years relative to the EU average. The prosperity level in Italy was still 20 percent above the European average in 1995, but Italy dropped back to the European average EU in 2011. The GDP growth per capita was the same as in Europe, but rising prices caused prosperity to deteriorate.
Per capita GDP in the European Union (adjusted for price level differences)
Michel van Kooten and Sidney Vergouw