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Enhancing the Financial Absorption Capacity of EU Member States Through the Reconsideration of Current Allocation Rules

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  • Eva Palinko
  • Agnes Svoob
  • Marta Szabo

Abstract

The preparation process of the new European Union (EU) programming period 2014–20 provides an opportunity to make recommendations based on experiences from the current programming period. We argue that the allocation mechanism recommended in the EU Guide (Guide to Cost-Benefit Analysis of Investment Project, 2008 ) does not ensure an increase in community welfare at the lowest possible public cost and is not in line with international practice. Regarding co-financing, projects with an expected return that is lower than the discount rate usually applied in the private sector but higher than the financial discount rate applied by the EU will not be supported. As a consequence, projects that promise a significant community welfare increase with the lowest public assistance will not be implemented. Our proposal is suitable for enhancing the financial absorption capacity of EU member states in spite of tightening funds. Copyright CEEUN 2013

Suggested Citation

  • Eva Palinko & Agnes Svoob & Marta Szabo, 2013. "Enhancing the Financial Absorption Capacity of EU Member States Through the Reconsideration of Current Allocation Rules," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 20(3), pages 351-366, November.
    • Handle: RePEc:spr:trstrv:v:20:y:2013:i:3:p:351-366
    DOI: 10.1007/s11300-013-0288-0
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    References listed on IDEAS

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    4. Lucertini, Giulia, 2012. "Evaluating public policies : Normative models beyond cost benefit analysis," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/9265 edited by Tsoukiàs, Alexis & D'Alpaos, Chiara.
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    Cited by:

    1. Larisa-Diana POP & Anca BORZA, 2015. "Structural And Cohesion Funds - Way To Increase Competitiveness At Enterprise Level," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 9(1), pages 893-901, November.
    2. Larisa-Diana POP & Anca BORZA, 2017. "The Europe 2020 Strategy And Beneficiaries Of Structural Funds," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(1), pages 120-128, November.

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    More about this item

    Keywords

    Economic/financial rate of return; Public project evaluation; EU fund allocation mechanism; Financial/economic efficiency criteria; H43; F36; H83;
    All these keywords.

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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