Economic development

GDP per capita (US$1995) by sub-region: Europe

Although GDP per capita has climbed steadily in Western Europe and thus in the region as a whole, there are marked contrasts with GDP per capita levels in Central and Eastern Europe

Note: data for CEE are unreliable pre-1989.

Source: estimated from World Bank 2001

The economies of Western Europe have recovered from the recession of the early 1990s and were growing at around 2.5 per cent a year by the end of 2000 (UN 2000a). An important factor has been the realization of the single market. Starting with the creation of the European Monetary System in 1979, the completion of the European Single Market became a fact in 1993, and the European Monetary Union became a reality for 300 million people in 12 EU countries with the debut of the Euro on 1 January 2002. The currency is likely to be an instrument of economic stability and growth throughout Europe, which will strengthen economic and political cooperation in the region.

Per capita GDP (measured in constant US$1995) has grown steadily for the region as a whole from about US$9 000 in 1972 to an average of US$13 500 in 1999 (see graph). Nevertheless, there are major sub-regional differences, ranging from US$25 441 in Western Europe in 1999 to US$3 139 in Central Europe and US$1 771 in Eastern Europe (compiled from World Bank 2001). Between 1980 and 1999, real GDP declined in 14 CEE countries and by more than 50 per cent in four of them - Georgia, Moldova, Ukraine and Yugoslavia (UN 2000a).

Average per capita consumption has increased steadily by an average 2.3 per cent a year in Western Europe over the past 25 years (UN 2000b). Consumption in some CEE countries has started to increase in recent years, as some of the population has achieved increased purchasing power, particularly in Poland (which has experienced a 65 per cent increase since 1991), Hungary and Slovenia (UN 2000b).

Energy consumption in Europe
Although the per capita consumption of fossil fuels in Europe as a whole has hardly changed over 30 years, this is partly the result of negative growth in energy consumption in CEE countries due to economic restructuring. In Western Europe, however, the link between economic growth and energy use has not been broken (EEA 2001). Per capita energy consumption varies considerably throughout Western Europe but is increasing in most countries with the exception of Germany, where it decreased by 5 per cent between 1987 and 1997. While per capita energy consumption in CEE is often lower than the Western European average, energy intensity is three or more times higher (OECD 1999). This is due to the high share of heavy industries, obsolete technologies and low efficiency of energy use. Current and future changes in industrial activity will have major implications for the link between energy use and economic growth. Replacing obsolete technologies with modern cleaner technology provides a potential for a more sustainable development.