Republic most likely EU state to reach US wealth level

The Republic is the only EU economy that could catch up with wealth levels in the US in the foreseeable future, a new analysis has concluded.

If the US economy were to have stagnated since 2000, the Republic would be in a position to catch up in terms of GDP per capita in 2005.

The research, produced by Swedish business think-tank, Timbro, also finds however that if the Republic were a US state, it would be the twelfth poorest.

This would make Irish people better off than residents of states such as Florida, Alabama and Montana, but worse off than most of the US. The richest US state is the District of Columbia, surrounding Washington, followed by Delaware and Connecticut.

Timbro, which describes itself as a "free-market think tank", has tried to benchmark the 15 states of the pre-enlarged EU against the US in terms of wealth.

It concludes that the wealth gap that currently separates the US from the EU is so large that it would be extremely hard for most EU states to catch up, even if they enjoyed sudden growth spurts.

Timbro's calculations, which are based on Eurostat forecasts for EU economic growth, suggest that the Republic would be the first to catch up.

If the US economy were to have stagnated since 2000, Switzerland (the only non-EU state included in the study) would take about two years longer to meet US levels of wealth than the Republic - 2007 - while the UK would only catch up by about 2009.

All other EU states would remain behind the US 2000 GDP per capita until after 2010.

Sweden, Italy and Portugal would have to wait until 2022 to catch up.

"The differences between the American and the European economies are very great, so great that most of the European countries will need 15 years of normal growth to catch up on the American economy as it now stands," the think-tank notes.

Timbro says the success of the American economy is not a result of "casual cyclical phenomena".

"Quite simply, the USA has succeeded with something in its growth policy (or rather absence of policy) where the European countries have not."

Taking the 50 states of the US individually, Timbro has worked out that Luxembourg would be the only realistic EU rival to the richest parts of America.

Luxembourg is richer by GDP per capita than all of the US apart from Delaware and the District of Columbia. Timbro concludes that this positioning can be attributed to a heavy inflow of foreign capital.

The UK, France and Italy would vie for a position among the five poorest states of Mississippi, West Virginia, Montana, Arkansas and Oklahoma.

Greece would meanwhile be the poorest US state of all, with a GDP per capita that is less than half of that of the US.