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Southern Europe vs Northern Europe: a quick comparison.

Reference to the European economy is often thought to refer to the European Union or even continental Europe as a whole. What is clear, is that most individuals unanimously overlook the intrinsic and pivotal differences between them. Even though they are geographically and culturally close, there are huge disparities between the countries that compose Europe. In this article, I will specifically highlight the key differences between Northern and Southern European countries.

For starters, the GDP per capita and industrial production in the North are much higher than in the South, with the North's origins traced back as far as the Industrial Revolution in the 18th and 19th centuries. All four of the southern countries were, and in comparison, to their northern counterparts, continue to be underdeveloped and rely heavily on agriculture and manufacturing. This led and continues to lead to low productivity and a high input of workers in unspecialized roles. Another key factor for the slower development of these less industrialized societies is the low levels of literacy and investment in their education systems, which may, in turn, be related to religion. Given that Luther’s Protestant Revolution was rooted in the belief that everyone should have access to the sacred texts, not only the clergy, as the Catholic and Orthodox Churches preached. To achieve this, those countries made significant efforts to enroll children in school and get them into higher education which allowed for easier implementation of new technologies and higher success in Research and Development for decades to come.

The lack of investment created a vicious cycle, where the poorer class did not want their children to pursue higher education, rather choosing to push them towards a profession that would allow them to provide for their family, perpetuating the same mistakes made before them, until the proper investment was made, and legislation was implemented to force said changes. The long-lasting effects can still be seen in these countries, and have greatly impacted their economies, most of them rely heavily on the tertiary sector, like tourism, given that their industries, with some exceptions, never truly developed enough to match the centuries of industrialization in the northern countries. Another interesting aspect to compare is the productivity in these two groups, meaning the output per hour. There is a lot of prejudice regarding the south and the usual running joke of the “siestas”, but in fact, that does not seem like the case, as evidenced in the corresponding figure.

In fact, those in the South seem to work even longer hours than their richer neighbors. Clearly, productivity is crucial, which can in part be related to their rate of education, their level of industrialization, and consequentially at how much each hour of their work is worth.

Our four southern countries on the bottom, having the worst output per hour worked and therefore justifying their weekly hours of work, on a nominal scale.

Bear in mind that this only one of many aspects of analysis when comparing the major southern and northern European countries. This can also help explain how the effects of the financial crisis of 2008 lasted so much longer in this less industrialized part of the world, with economies biased towards services like tourism. These effects still last 13 years later and will continue to in this post-Covid world.