FRIEDRICH-EBERT-STIFTUNG – A NEW GROWTH MODEL IN EU-CEE ments« of the Washington Consensus, including external openness and»sound« fiscal policy. 8 Other possible routes, such as the Social Democratic models of Sweden or Aus­tria, the phenomenal systems used in East Asian econo­mies, or the methods that created the post-war»golden years« of managed capitalism in Western Europe, were not followed. While the overall robust convergence performance of 1995–2007 is clear, the debate around the economic poli­cies implemented in this period remains quite heated, es­pecially in relation to the early 1990s. 9 The EBRD found that people born around the time of the»shock therapy« in the early 1990s are 1 centimetre shorter than would be expected(Adsera et al. 2019). Moreover, the mostly robust rates of convergence from the mid-1990s to the mid-2000s were certainly helped by favourable base effects. Mean­while, even during these good years, certain problems were increasingly apparent, including massive population decline across much of EU-CEE, still-high unemployment in some places, persistent trade deficits, and over-specialisa­tion in the automotive sector. 2.2 POST-2008: LEAPFROGGING SOUTHERN EUROPE, BUT SLOWER CONVERGENCE WITH GERMANY The 2008–09 crisis was a seismic event for the European and global economies. However, unlike during the transi­tion recessions of the early 1990s, not all countries in EU­CEE suffered badly. While the three Baltic states suffered real GDP declines of over 14 percent in 2009, Poland avoid­ed recession entirely. Perhaps because of this differentiated impact, the crisis did not fundamentally change basic con­victions about the inherited growth model in the»old« EU, nor in EU-CEE. Since the crisis, EU-CEE’s outperformance over the EU-15 has continued, driving further convergence. As of 2019, the highest level of income convergence had been achieved by the Czech Republic(88 percent of the EU-15 level at purchasing power parity), followed by Slovenia(83 per­cent) and Lithuania(82 percent). Using a simple average, EU-CEE countries had achieved 70 percent of EU-15 per capita GDP in 2019, up 15 percentage points from 2007. However, two important caveats must be kept in mind. First, headline growth in EU-CEE during this period has been substantially lower than pre-2008. EU-CEE countries grew by an average of 2.7 percent per year from 2010–09, compared with 5 percent in the ten years leading up to 2007. Second, the convergence that they have achieved has been in the context of a substantial slowdown in growth in the EU-15. These countries posted average real 8 See Havlik(1991). 9 Even at the time, many expressed doubts and suggested that a more gradual transition would have been better. See, for example Passell (1993). GDP growth per year of 1.5 percent 2010–19, compared with 2.5 percent in the ten years leading up to 2007. These nuances become even more apparent when com­paring EU-CEE performance with individual countries(Fig­ure 2.3). Within the EU-15, there has been a vast range of outcomes since 2008. Compared with Southern European countries badly affected by the 2008 crisis, EU-CEE’s con­vergence performance over the past decade or so looks strong. EU-CEE, on average, went from 67 percent of Greek per capita GDP in 2007 to 114 percent by 2019; among EU-CEE countries, only Croatia and Bulgaria are now poorer than Greece when using this measure. By 2019, the Czech Republic even overtook Spain and reached 98 percent of the Italian level. Measured against Germany, however, a country that has had a decent(albeit not spectacular) post-crisis period, the outcomes look quite different. Particularly for the more de­veloped parts of EU-CEE, convergence relative to Germany has been limited at best since the crisis. By 2019, the Czech per capita GDP reached 77 percent of the German level (from 71 percent in 2008), while Slovenia actually became relatively poorer compared to Germany over the same pe­riod. Progress made against Germany by other members of the region(the Baltic countries and Romania especially) were more substantial, although these countries had low­er starting points. Looked at in this way, there are several observations about EU-CEE’s economic performance since the global financial crisis that we’d like to mention. First, overall real GDP growth has slowed considerably. This is, to a large extent, reflected in generally subdued performance in key markets in Western Europe. Second, real convergence in per capita terms with Western Europe overall has continued at a ro­bust rate. Third, EU-CEE countries have generally shown a substantially higher degree of resilience to the many chal­lenges that the continent’s economies have faced since 2008 than Southern Europe. Although some parts of EU­CEE— especially the Baltic states— suffered badly in the immediate aftermath of the global financial crisis, they have rebounded very strongly. Finally, the data show a large degree of differentiation across both Western and Eastern Europe, and the particular comparator chosen to access convergence dictates the sto­ry. On any measure, even compared with Germany, some parts of EU-CEE(especially Romania, Lithuania, and to some extent Poland) show respectable rates of convergence since 2007. However, this not so much the case for Slovenia, Cro­atia, Slovakia, and the Czech Republic. For the former three countries, even against the EU-15 average, which is weight­ed towards Southern Europe, total percentage-point con­vergence between 2007 and 2019 was in the single digits. Against Spain or Greece, the convergence performance of all EU-CEE countries over this period looks strong. The fact that poorer countries can grow faster than the more affluent states is not unexpected. It is consistent with 10