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This paper examines the integration experiences of Portugal and Spain in the European Union in order to study how it has affected their economic structures and economic performance. It analyzes the relationship between regional integration, economic growth, and economic reforms, draws some lessons based on their EU integration experience, and looks at the impact of European Monetary Union (EMU) integration in the Portuguese and Spanish economies. While the overall benefits of EU/EMU membership are undeniable in both countries, their economic performance diverged starting in 2000. In particular, the paper will examine the reasons for this divergence during the 2000-2007 period. The examination of these cases will show that the process of economic reforms has to be a domestic process led by domestic actors willing to carry them out. [ABSTRACT FROM AUTHOR]

Portugal faced a decade of feeble economic growth after joining the European Economic and Monetary Union. Systematic research of the specific effects of this regime change on growth is still lacking. The counterfactual analysis that we undertake in this paper seeks to fill such a gap. Our findings suggest that the adoption of the Euro did have adverse effects on Portuguese economy. To the contrary, in 2009, the Euro seems to have sheltered the Portuguese economy from the worse effects of the international financial crisis. [ABSTRACT FROM AUTHOR]