Socio-economic divergence of Ukraine and the EU: new challenges

Abstract

The research characterizes current dynamics of Ukraine’s socio-economic development in the process of its European integration in view of the Association Agreement with the European Union concluded in 2014. The comparative assessment of the development of Ukraine and individual EU countries by the criteria of GDP per capita is given. The recent increasing tendency of divergence of the socio-economic systems of the European Union and Ukraine is highlighted, describing the institutional phenomenon of the divergence trap as a result of the synthesis of poverty and non-convergence traps. The risks of Ukraine’s falling into the divergence trap, which are related to the effect of several major internal factors are outlined. The article addresses such factors as Ukraine’s adoption of conditions for restructuring a part of the national debt in 2015; unacceptably low levels of national economy capitalization in the context of convergence; galloping labour migration from Ukraine, which accounts for significant loss of domestic GDP growth potential; and small value of innovation and technology in the macroeconomic development of the state.