Support for Eurosceptic parties has surged from the political fringes to encompass nearly a third of European voters. These movements promise a ‘free lunch’: prosperity through less integration and more national control. This column offers new evidence from across 1,166 European regions from 2004 to 2023 that Euroscepticism carries a significant economic cost. The more Eurosceptic regions have seen slower GDP per capita, productivity, and employment growth, particularly since the euro area crisis. Far from liberating local economies, Euroscepticism imposes measurable economic penalties on the very places embracing it, creating a vicious cycle of discontent and decline.
In less than two decades, Euroscepticism has moved from the margins of protest to the centre of European politics. Once confined to populist outliers – in the mid-2000s it represented a mere 3.7% of votes in national legislative elections – parties promising to ‘take back control’ now command as much as a third of the vote across EU member states. In some regions, more than half of voters now back Eurosceptic forces. The rise of such parties has reshaped electoral maps from the Po Valley to eastern Germany, from northern France to rural Sweden (Figure 1). The story being told is seductively simple: European integration has shackled prosperity. Only by reclaiming ‘sovereignty’ will prosperity be set free.
Figure 1 Change in the regional share of votes for hard Eurosceptic parties in EU national legislative elections, 2004–2008 vs 2020–2023 electoral cycles
Figure 1 Change in the regional share of votes for hard Eurosceptic parties in EU national legislative elections, 2004–2008 vs 2020–2023 electoral cycles
Source: Authors’ elaboration.
Our research (Rodríguez-Pose et al. 2025) examines the consequences of the rise of Euroscepticism and challenges this assumption head-on. Drawing on regional data for all 27 EU member states between 2004 and 2023, we ask what happens to places that turn against European integration. The analysis shows that places that yield to the temptation of Euroscepticism have, over time, grown more slowly, created fewer jobs, and lost ground in productivity relative to their more Europhile peers. In other words, Euroscepticism is no free lunch and appears not merely as a symptom of economic malaise but as a contributor to it.
Going beyond the causes of Euroscepticism
Most economic research to date has focused on the causes of Euroscepticism, treating it as a consequence of economic distress. The argument that long-term economic pain breeds political backlash (Rodríguez-Pose 2018) has been central to understanding its rise. The geography of EU discontent closely mirrors that of long-term stagnation (Dijkstra et al. 2020). There also appears to be a strong link between external economic threats, such as the rise of import competition from China, and anti-EU voting (Stanig and Colantone 2017).
Yet this research only covers one side of the story. What happens to economies after voters embrace Eurosceptic parties, even when these parties are not in government? Can political discontent itself become an economic liability, even before Eurosceptic forces can implement policy?
There has been no previous research directly on the consequences of Euroscepticism. The closest is work on the consequences of populism, which shows that anti-system leaders worldwide typically deliver worse economic outcomes, with GDP per capita roughly 10% lower 15 years after they take office (Funke et al. 2023). According to this research, populist leaders systematically undermine performance through institutional degradation and policy mismanagement (Funke et al. 2023).
But populism is not equivalent to Euroscepticism, and most Eurosceptic parties in Europe have rarely governed. Although some, such as Fratelli d’Italia in Italy or Fidesz in Hungary, control the levers of power, many others – such as Rassemblement National in France or Alternative für Deutschland in Germany – have remained in opposition. The question thus becomes: does merely signalling widespread Euroscepticism damage regional economic prospects?
The ‘free lunch’ illusion
Eurosceptic parties across the political spectrum promise renewal through liberation from Brussels. On the far right, this means national competitiveness unburdened by EU rules; on the far left, freedom from austerity and fiscal constraint. Both traditions share a belief that regaining sovereignty will translate into renewed prosperity.
Has that been the case? We draw on a comprehensive dataset covering 1,166 European regions across all EU-27 countries from 2004 to 2023. We measure Eurosceptic support using the vote shares of parties that experts classify as opposed to European integration (scoring 2.5 or below on the Chapel Hill Expert Survey’s 1–7 scale). We then track how regions with different levels of Eurosceptic voting subsequently perform on four key development indicators: GDP per capita growth, productivity growth, employment growth, and population change.
The findings reveal that a region with a 10 percentage points higher Eurosceptic vote share experiences approximately 0.35 percentage points slower annual GDP per capita growth. This may sound modest, but compounded over multiple electoral cycles, it translates into substantial divergence. Over 12 years – three electoral cycles – such a region could find itself roughly 4%–5% poorer than an otherwise similar but less Eurosceptic neighbour.
Productivity tells a similar story. Each additional 10 points of Eurosceptic support is associated with lower annual productivity growth by about 0.10–0.14 percentage points. Employment creation lags by roughly 0.25 percentage points annually, cumulating to about 3% fewer jobs over the same period. Population effects are, by contrast, more muted, although Eurosceptic regions struggle to retain or attract residents. The relationship between Eurosceptic sentiment and subsequent economic underperformance appears robust and substantial.
The crisis as a catalyst
The 2012–2013 euro area crisis and subsequent austerity acted as a critical juncture. Before the crisis, the economic penalty associated with Euroscepticism was present but muted. The crisis changed everything: citizens of regions with high Eurosceptic sentiment suffered disproportionately during and especially after this period.
For GDP per capita, the post-2012 penalty nearly doubled compared with the pre-crisis period. A region that is to points more Eurosceptic saw annual growth rates fall by an additional 0.16 percentage points after 2012, bringing the total effect to roughly 0.38 percentage points annually. By 2023, this translated into a cumulative income shortfall approaching 5.5% (Figure 2).
Figure 2 Development implications of Eurosceptic support and the crisis (event study analysis)
Figure 2 Development implications of Eurosceptic support and the crisis
Note: The period on the horizontal axis refers to the period after the electoral cycle.
Why did the crisis amplify Euroscepticism’s economic impact? Several mechanisms likely operated simultaneously. First, regions vocally opposed to the EU may prove less effective at securing or deploying European funds. As Crescenzi et al. (2020) have shown, EU funds can mitigate rather than fuel Euroscepticism when properly deployed. But achieving this requires institutional capacity and a willingness to engage with EU mechanisms, precisely what Eurosceptic regions often lack (Rodríguez-Pose et al. 2024). Investors confronting scarce capital post-crisis may avoid regions perceived as politically unstable or potentially hostile to EU frameworks. The crisis also heightened regional polarisation. Regions with strong Eurosceptic sentiment may have experienced reduced social cohesion and institutional trust precisely when cooperation was most needed for recovery.
Not just a story about attaining power
Crucially, these effects materialise largely without Eurosceptic parties actually holding power. Despite their recent rapid rise, most such parties have remained in opposition, with notable exceptions such as Greece’s Syriza, Hungary’s prolonged Fidesz rule, or various Eurosceptic parties in Italy. The economic penalty therefore operates through channels beyond direct policy implementation.
High Eurosceptic vote shares may signal deep institutional distrust and political uncertainty to businesses and investors. When investors perceive hostility towards the EU or uncertainty about future relations with Brussels, capital flows slow, businesses hesitate to invest, and national investment and structural funds may be underused or diverted.
The political act of repudiating integration appears to carry economic penalties even before it translates into policy. Firms considering investments may hesitate when local electorates demonstrate hostility towards the EU frameworks that underpin the single market. Even without policy changes, widespread Euroscepticism can deter outside investment and raise perceived risk. The Brexit experience, where business investment stalled well before actual withdrawal, offers a vivid illustration of how political uncertainty alone can chill economic activity (van Oort et al. 2017). Uncertainty can ripple through regional economies long before Eurosceptics reach power.
Regional leaders in highly Eurosceptic areas may also adjust their agendas in response to strong anti-EU sentiment, leading to lower or different engagement in EU programmes, European cooperation initiatives, or business development strategies, even when those leaders are not from Eurosceptic parties themselves. The cumulative effect of such micro-decisions, multiplied across firms, governments, and individuals, can significantly alter growth trajectories.
A vicious cycle
These findings expose a troubling feedback loop. Economic stagnation and regional decline fuel Eurosceptic voting, as demonstrated by research on Europe’s ‘development trap’ (Diemer et al. 2022, Rodríguez-Pose et al. 2024). Many European regions have become trapped in persistent low growth, unable to adapt to structural economic change (Iammarino et al. 2020). As our analysis shows, Eurosceptic sentiment then becomes part of the problem, not just a symptom. Regions embracing Eurosceptic parties experience slower economic dynamism and prosperity, which likely further intensifies discontent, potentially driving even stronger Eurosceptic support in subsequent elections.
This dynamic creates a particularly pernicious form of path dependence. Voters in struggling regions turn to Eurosceptic parties seeking change and prosperity. Yet their choice – however understandable given their frustrations – appears to worsen their economic prospects, deepening the very stagnation that motivated the protest vote initially. The promised ‘free lunch’ of reduced EU integration delivering economic revival proves illusory. Instead, citizens in Eurosceptic regions effectively pay for their political discontent through foregone growth and missed opportunities.
Breaking the cycle
The policy implications are profound. The solution is not to disparage Eurosceptic voters, whose grievances are often real, but to recognise the economic cost of channelling them through anti-European politics. Labelling the inhabitants of these regions as "deplorables", as Hillary Clinton did in her failed 2016 presidential campaign, or treating their regions as lost causes will only reinforce alienation (Rodríguez-Pose 2018). Nor will simple fiscal transfers suffice (Borin et al. 2021). Money without engagement may soothe symptoms but not the underlying malaise. Left-behind people and left-behind places need honest political re-engagement alongside targeted economic reinvestment.
A dual strategy appears necessary. Politically, the EU and national governments must listen and respond to concerns about fairness, visibility, and local voice that drive Euroscepticism. Economically, targeted initiatives promoting regional development, education, access to capital, and economic diversification are essential. Recent EU initiatives such as the joint recovery fund and the emphasis on a ‘just transition’ in climate policy represent positive steps, but these must demonstrably target vulnerable regions to succeed.
Above all, humility is required. Many voters embraced Eurosceptic parties because mainstream politics failed them for too long. Yet their choice seemingly worsened their economic prospects; an irony that should give everyone pause. The problem resides not solely with voters or institutions but in their fractured relationship. Rebuilding trust in democratic institutions, including the EU’s capacity to deliver broad-based prosperity, remains paramount.
Crucially, governance and institutional quality matter. Improvements in regional institutions are often more decisive for growth than physical capital alone (Rodríguez-Pose and Ketterer 2019). Where local governments are transparent, accountable, and effective, EU funds translate into genuine development; where they are not, cynicism festers. The vicious cycle of discontent can only be broken by a virtuous one of competence.
Conclusion
Euroscepticism is no free lunch. Its rise exacts an economic toll that disproportionately affects those who expected to benefit from it. Europe’s future depends on ensuring that Euroscepticism does not become a permanent barrier to economic development across the continent. This requires more than platitudes about European unity or technocratic adjustments to cohesion policy. It demands responsive governance that helps transform today’s Eurosceptic strongholds into tomorrow’s success stories, reintegrating disenfranchised citizens into a more prosperous and unified Europe. The alternative – allowing the vicious cycle of discontent and decline to continue – risks fragmenting the European project from within, region by region, vote by vote.
References
Borin, A, E Macchi, and M Mancini (2021), "EU transfers and Euroscepticism: Can’t buy me love?", Economic Policy 36(106): 237–86.
Crescenzi, R, M Di Cataldo and M Giua (2020), "It’s not about the money: EU funds, local opportunities, and Euroscepticism", Regional Science and Urban Economics 84, 103556.
Diemer, A, S Iammarino, A Rodríguez-Pose, and M Storper (2022), "The regional development trap in Europe", Economic Geography 98(5): 487–509.
Dijkstra, L, H Poelman, and A Rodríguez-Pose (2020), "The geography of EU discontent", Regional Studies 54(6): 737–53.
Funke, M, M Schularick, and C Trebesch (2023), "Populist leaders and the economy", American Economic Review 113(12): 3249–88.
Rodríguez-Pose, A, L Dijkstra, and C Dorati (2025), "Paying for Euroscepticism", JRC Working Papers on Territorial Modelling and Analysis 09/2025, European Commission, Ispra, JRC143982.
Rodríguez-Pose, A, L Dijkstra, and H Poelman (2024), "The geography of EU discontent and the regional development trap", Economic Geography 100(3): 213–45.
Rodríguez-Pose, A, and Ketterer, T (2019), "Institutional change and development in lagging regions in Europe", Regional Studies 53(4): 449–61.
