ROMANIAN REVIEW OF REGIONAL STUDIES, Volume XI, Number 1, 2015 3 INTER-REGIONAL DISPARITIES IN THE EUROPEAN UNION CONSTANTIN POSTOIU 1 , IONUȚ BUȘEGA 2 ABSTRACT – One of the European Union’s major goals is to reduce disparities between countries and regions. We compute sigma-convergence at national and regional level (NUTS2) on GDP per capita and employment rates to analyze the evolution of convergence in the EU. Results show growing disparities both at regional and national levels. Quartiles are used to separate the best and the worst performing regions. Comparing the average performance of the 25% most developed regions with the one of the 25% least developed regions reveals that the widening gaps are due to the increasing performance of the former and the worsening situation of the latter. In terms of both GDP and employment, after 2009 the leading regions enjoy high growth rates, while the regions lagging behind show small or negative growth. According to the results, the divergence in regional employment rates is currently at the highest level since 2000. Choropleth maps are used to illustrate the levels and the evolution of the two indicators at regional level. Keywords: regional development, regional economic disparities, sigma-convergence INTRODUCTION The Cohesion Policy is the main financial instrument available to EU institutions in order to fulfil the targets of the Europe 2020 and the objective of reducing disparities between countries and regions of the European Union. Economic disparity is not just about income, but also about an overlapping of features that contribute to the quality of life for EU citizens: transport infrastructure (highways, bridges, airports, etc.), the education system and training of human capital, environment infrastructure, research and development facilities, etc. This policy expresses the solidarity of the UE for less developed countries and regions by concentrating funds to those areas and sectors that can promote economic competitiveness. 3 Cohesion Policy is one of the basic principles of the European construction and dates back to its founding Treaty (Treaty of Rome, 1957). According to the 1957 Treaty, one of the main objectives of the European Community was to promote "the harmonious development of economic activities" (Art. 2). In addition, with the first enlargement of the European Community (Ireland, Denmark and the UK in 1972) and the shaping of the Economic and Monetary Union, the Regional Development Fund was created in December 1974. The need for this fund came as result of the fact that with progressive enlargements there were recorded increasingly higher economic disparities between member states, amid gradual accession of new, less developed countries. In the new multi-annual programming period, 2014-2020, the Cohesion Policy represents approximately 32.5% of the total budget of the European Union. In nominal terms, 351.8 billion euros are allocated for promoting competitiveness, creating new jobs and supporting regional economic growth. 1 Assistant professor, Ph.D. candidate, Bucharest University of Economic Studies, Romania, Faculty of Theoretical and Applied Economics, 15-17 Dorobanți Street, Sector 1, 010552, Bucharest, Romania. E-mail: postoiu.constantin@gmail.com 2 Assistant professor, Ph.D. candidate, Bucharest University of Economic Studies, Romania, Faculty of Theoretical and Applied Economics, 15-17 Dorobanți Street, Sector 1, 010552, Bucharest, Romania. E-mail: busega_ionut@yahoo.com 3 European Commission, http://ec.europa.eu/regional_policy/what/index_en.cfm.