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Challenges of EU and new member states in financial perspective 2007-2013: convergence and absorption of available cohesion resources

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  • Mojmir MRAK
  • Vasja RANT

Abstract

The recent agreement on financial perspective 2007-2013 provided new member states with substantial cohesion resources to speed up their real convergence process. The primary objective of the paper is to explore key policy issues, faced by new member states, if they want to successfully absorb available cohesion resources in the next financial perspective and outline their key policy choices and possible outcomes in terms of convergence and stability. The secondary objective is to provide an overview of the financial perspective deal achieved under the UK presidency in light of the main economic challenges of the EU. The main conclusions are: first, new member states need to focus on restructuring their national budget expenditure, if they want to implement cohesion policy in the next financial perspective without compromising fiscal stability and, second, the deal achieved under the UK presidency is a far cry from the original proposal by the European Commission and from proclaimed key economic challenges of the EU for the future (particularly competitiveness), however, it still provides significant convergence support for new member states for a 7-year period.

Suggested Citation

  • Mojmir MRAK & Vasja RANT, 2006. "Challenges of EU and new member states in financial perspective 2007-2013: convergence and absorption of available cohesion resources," Departmental Working Papers 2006-09, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2006-09
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    File URL: http://wp.demm.unimi.it/files/wp/2006/DEMM-2006_009wp.pdf
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    References listed on IDEAS

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    4. Sapir, Andre & Aghion, Philippe & Bertola, Giuseppe & Hellwig, Martin & Pisani-Ferry, Jean & Rosati, Dariusz & Vinals, Jose & Wallace, Helen, 2004. "An Agenda for a Growing Europe: The Sapir Report," OUP Catalogue, Oxford University Press, number 9780199271498.
    5. Martin Hallet, 2004. "Fiscal effects of accession in the new Member States," European Economy - Economic Papers 2008 - 2015 203, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    Cited by:

    1. Vassilis Monastiriotis, 2008. "The Emergence of Regional Policy in Bulgaria: regional problems, EU influences and domestic constraints," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 15, Hellenic Observatory, LSE.

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    More about this item

    Keywords

    new member states; absorption capacity; cohesion policy; financial perspectives; economic challenges of the EU;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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