Europe is the world's second-smallest continent, spanning 10,180,000km² (3,930,000 square miles). Europe is located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. There are 44 countries in Europe.
World War I and World War II damaged the European economy. During the Cold War, central and eastern European states came under the Soviet Union's control, forming COMECON (Council for Mutual Economic Assistance). Those that remained free-market states were given a large amount of aid in the United States. The western European states linked their economies together, forming the beginnings of the European Union and increasing border trade. This helped them to rapidly improve their economies, while the COMECON countries were still struggling.
After the collapse of the Soviet Union, communist rule fell in eastern Europe, and countries gradually joined the European Union:
- East Germany in 1990
- Estonia, Latvia, Lithuania, Czech Republic, Hungary, Poland, Slovakia, and Slovenia in 2004
- Bulgaria and Romania in 2007
- Croatia in 2013
Economic prosperity in Europe, however, varies significantly between countries. The countries that were severely affected by the Soviet Union's downfall tend to be the poorest today.
Moldova is the poorest country in Europe, with a GDP per capita of $2,289. Part of the USSR, Moldova faced political instability, economic decline, trade obstacles, and other hardships following the Soviet Union's collapse in 1991. Factors contributing to poverty in the country include lack of large-scale industrialization, food insecurity, economic collapse during the transition into a market economy, and errors in social policy, among other things. Despite being the poorest country in Europe, Moldova made recent progress, with the percentage of the population living below the national poverty line decreasing from 30.2% to 9.6% between 2006 and 2015.
With a per capita GDP of $2,639, Ukraine is the second-poorest country in Europe. Ukraine had the second-largest economy in the USSR; however, after its collapse, Ukraine had difficulty transitioning into a market economy, sending much of the population into poverty. Some of Ukraine's continuing issues contributing to its poverty are government corruption, Russian aggression (specifically Russia's illegal seizure of Crimea in 2014), and weak infrastructure.
Kosovo has a per capita GDP of $3,893, making it the third-poorest country in Europe. Kosovo is a partially recognized state that declared itself independent from Serbia in 2008. About 30% of Kosovo's population falls below the poverty, meaning that about 550,000 people live in poverty. Additionally, Kosovo has an extremely high unemployment rate of 34.8% as of 2016, with a majority of families earning less than 500 Euros per month.
Albania has a GDP per capita of $4,537. After the USSR's disintegration in the 1990s, Albania shifted from a socialist economy to a capitalist market economy. Although it is the fourth-poorest country in Europe, its economy is continually improving due largely to its rich natural resources, such as oil, natural gas, and minerals, including iron, coal, and limestone.
5. Bosnia and Herzegovina
Bosnia and Herzegovina has a GDP per capita of $5,674. The largest cause of poverty in Bosnia is its legacy of war. Before the war and genocide, Bosnia was classified as a middle-income country, and after the conflict between 1992-1995, the country has not bounced back after over 20 years. Additionally, working-age men were the largest group to perish during the war, causing one-in-four households to be headed by women. This causes families to fall into poverty because women are a smaller percentage of the workforce and often get paid less than men.
6. North Macedonia
North Macedonia is the sixth-poorest country in Europe. After gaining its independence in 1991, North Macedonia went under dramatic economic change and has gradually improved its economy. Trade accounts for about 90% of the country's GDP. Despite the policies successfully implemented by the government, North Macedonia still has a high unemployment rate of about 16.6%. At its highest, the unemployment rate was 38.7%. North Macedonia's per capita GDP is $5,442.
Serbia's per capita GDP is $5,900. At the beginning of the 2000s, Serbia experienced eight years of economic growth until the global recession in 2008. Serbia's economy entered a recession in 2009, causing a negative growth rate of -3% in 2009 and -1.5% in 2012 that caused the country's public debt to double to 63.8% of its GDP. About 25% of Serbians are impoverished. Natural disasters, such as floods and earthquakes, have also significantly slowed down any country's economic progress.
Like other former Soviet republics, Belarus faced economic trouble following the disintegration of the USSR. In the years before, Belarus had a strong economy and one of the highest living standards among Soviet republics. During the following years, Belarus faced economic hardship until 1996, when the economy began to recover. Between 2006 and 2011, when many countries in Europe felt the effects of the recession, Belarus's expenditures among its bottom 40% of people increased. The country's per capita GDP is $6,283.
Montenegro's per capita GDP is $7,669. Montenegro's economy is small and relies upon energy industries. Urban expansion and deforestation have eroded the country's natural resources, making it vulnerable to resource depletion. Additionally, gender and age discrimination cause large gaps in income, particularly for women. Internally displaced persons and refugees comprise about 50,000 of the population. They are among the poorest in the country, with a poverty rate that is roughly six times higher than the average national poverty rate of 8.6%.
Bulgaria is the tenth-poorest country in Europe, with a per capita GDP of $8,031. After losing its primary market, the Soviet market, in the 1990s, the attempt to establish a democratic government and a free-market economy further destabilized Bulgaria's economy. After years of financial growth, Bulgaria's economy was taken down again by the 2008 financial crisis. Bulgaria is the poorest country in the European Union, with more than 41% of Bulgarians at risk of falling into poverty and almost 10% of Bulgarians being extremely poor.