European integration is a multilayer process consisting of significant differences in efforts and capabilities of the Member State's individual EU participation. Hence, general statements about the national level of European economic integration are very vague. In order to fill this gap, this article presents a composite indicator measuring the extent of economic integration within the European Union -the EU Index. Existing composite indicators concerned with economic integration (globalization indices) were not designed to capture the specific European dimensions. The EU Index offers a unique basis, as now the national differences can be illustrated by one statistical measure. Large heterogeneities are found between the Member States with respect to overall European economic integration and to various sub-indices. By using cluster analysis, it is also shown that the prevailing economic heterogeneities in the EU are combined with a strong and even growing clustering of its members, thereby challenging present and future steps of European integration.

Does the size of a country affect its economic growth rate? Theory suggests that the existence of a national scale effect is favouring large countries and that small countries may overcome the impediments of smallness once their markets become internationally more integrated. So far, empirical evidence of a distinct impact of country size on economic growth is rather limited. The present study sheds light on this impact from a European perspective. Country size indeed correlates with economic growth and European economic integration enhances the convergence process of the countries. It is further shown that the impact of size varies according to a country's individual level of economic integration, suggesting that the long-term economic growth path is characterized by multiple transition points. This finding is particularly important given the prevailing imperfections of the European Union Single Market and the increasing number of small European Union member states. JEL Classifications: C23, F15, F43, O52

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