European Commission, (2013), Quarterly report on the euro area, 1/2013.
The focus section of this edition takes a look at the growth convergence experiences of euro area Member States following the introduction of the euro. Generally speaking, faster growth in relatively poorer countries has helped to narrow income gaps between EU Member States, but this convergence process is weaker for euro area members and appears to have stalled a few years after the inception of the euro. This mainly reflects a poor growth performance of catching-up countries due to disappointing productivity and TFP growth. There is also evidence of capital misallocation, with the accumulation process becoming gradually less efficient in terms of growth during the first decade of the euro. While capital investment was generally stronger in converging economies in pre-crisis years, it was concentrated in less productive industrial sectors, particularly those in services sector.