50 ROMANIAN JOURNAL OF EUROPEAN AFFAIRS Vol. 19, No. 1, June 2019 Economic Convergence between the Western Balkans and the New EU Member States (EU-13) Dzenita Siljak, Sándor Gyula Nagy 1 Abstract 2 : Te aim of the paper is to investigate if the Western Balkan countries converge towards the new Member States of the European Union, the EU-13. Te analysis is focused on beta convergence, defned as a tendency of poor countries to grow faster than rich countries. Te analysed period is 2004-2017, with two sub-periods; 2004-2008 and 2009-2013. Te subdivision is made in order to test the research hypotheses that the recent fnancial crisis negatively afected the absolute and conditional convergence process of the Western Balkans towards the EU-13. Te relationships between per capita GDP growth rate and selected macroeconomic variables are econometrically tested and the empirical results support the convergence hypothesis. Te convergence rates range 1.3%-3.6%. Te negative efects of the crisis on convergence are not confrmed, i.e., the convergence rates during the crisis period are the highest among the analysed periods. Te poorer countries should open their economies and maintain stable infation and debt, as economic openness and infation have a positive impact on per capita growth in the analysed countries, while general government debt has a negative impact. JEL Classifcation: F15, O47, O52 Keywords: Beta convergence, Western Balkans, European Union, New Member States, Transition, Financial crisis 1. Introduction Convergence is defned as a tendency of poor countries to grow faster than rich countries (Barro and Sala-i-Martin, 1992). Te European Union has focused on convergence since the Treaty of Rome (1957), when the common policies to promote “harmonious economic development and balanced expansions” were adopted. In 1975, with the accession of Ireland in 1973 and the future accession of Greece, Portugal and Spain in 1981 and 1986, the European Regional Development Fund was created. Te Fund’s main objective is assisting underdeveloped regions to catch up (Berend, 2016). Te countries that are in the transition process and want to join the European Union have to fulfl the Copenhagen criteria (1993). Te gist of these economic, political and institutional criteria is for a country to be able to function as an EU Member State. In order to join the Europe’s Economic and Monetary Union, the countries have to fulfl the Maastricht or convergence criteria (1992). In economic literature on European studies, the focus is usually on the convergence 1 Dzenita Siljak is an assistant professor at International University of Sarajevo and associate research fellow at the Institute for Foreign Afairs and Trade, Budapest, Hungary; e-mail: dzsiljak@ius.edu.ba Sándor Gyula Nagy is an associate professor at Corvinus University of Budapest and senior research fellow at the Institute for Foreign Afairs and Trade, Budapest, Hungary; e-mail: sandorgyula.nagy@ifat.hu 2 Te updated version of this article was submitted to RJEA editors on 10 March 2019