Rules may vary between style guides, but the general principle is that if it is just a general region it will have a lower-case compass-point, whereas if it is a region specifically defined by officialdom or by an organisation whose definition is being used, it will have upper case.
The Guardian style guide recommends "north London, north Wales, north-west England, the north-west, etc". The Economist style guide says: "Lower case for east, west, north, south except when part of a name (North Korea, South Africa, West End) or part of a thinking group: the South, the Midwest, the West (in the United States, but lower case for vaguer areas such as the American north-east, north-west, south-east, south-west), the Highlands (of Scotland), the Midlands (of England)... Europe's divisions are no longer neatly political, and are now geographically imprecise, so use lower case for central, eastern and western Europe. But North, Central and South America are clearly defined areas, so should be given capitals as should Central, South, East and South-East Asia."
On this basis, "northern Spain" has no capital N, but "Northern Ireland" has one; and if we refer to "south-west England" in a vague sense, it shouldn't have capitals, but if we are referring to "South West England", one of the nine official regions of the UK, then it should be capitalised.
For most people (and presumably for The Economist), "northern Europe" isn't considered an officially defined area nor one with strict boundaries. However, EuroVoc, an official publication of the European Union, maintains an official definition of "Northern Europe". The United Nations also maintains an official (and different) definition of "Northern Europe". If you were using one of these definitions and thus using the term "Northern Europe" to refer to one of these specific, defined list of countries, then you would probably want to capitalise "Northern".