Escaping Periphery through Trade. A Tale about Romanias Convergence to the EU

The “ever closer” ties with EU led to Romania’s  de facto integration in
the EU as far as trade flows are concerned (about two thirds of the
Romanian foreign trade takes place with EU).  EU is also the largest
investor in the Romanian economy (63% of FDI stock) and is becoming
its largest donor, through the various pre-accession programs that it
finances.
Nevertheless, convergence towards similar structures of production
between Romania and EU shows little improvement. Moreover, the fact
that Romania is one of the largest net exporters of workforce from the
region (Langewiesche, Lubyova, 2000) indicates that wage differentials
are large enough to stimulate temporary and/or permanent emigration,
meaning that income convergence is still far ahead. Of course, these
situations may end up with short and medium term positive results, as the
differences in the production structures encourage specialization, and the
money earned abroad return as foreign remittances in the domestic
economy. These positive implications may, in turn, create further
incentives for resources’ allocation outside the economic convergence
paradigm.

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