Blog Post

How to read the EU budget deal? II

Structural and Cohesion Funds, if properly used, can represent an important instrument for economic growth. The European Council conclusions of 8 February 2013 include the decision to impose a capping to the maximum amount of Structural and Cohesion Funds each member state can receive per year. The capping is set at 2.35 percent of GDP or 2.59 percent if average real growth over 2008-2010 was lower than - 1 percent.

By: Date: February 13, 2013 Topic: European Macroeconomics & Governance

How to read the EU budget deal?

How to read the EU budget deal? I

Structural and Cohesion Funds, if properly used, can represent an important instrument for economic growth. The European Council conclusions of 8 February 2013 include the decision to impose a capping to the maximum amount of Structural and Cohesion Funds each member state can receive per year. The capping is set at 2.35 percent of GDP or 2.59 percent if average real growth over 2008-2010 was lower than – 1 percent.

How does the capping affect the allocation of funds compared with the current 2007-2013 MFF?

We calculate the current allocation of Structural and Cohesion Funds as a share in GDP and identify countries for which the annual average amount in 2007-2013 was above 2.35 percent[1]. We account for real GDP growth over 2008-2010 in each of these countries and set the capping at 2.59 percent where the average economic growth rate is found to be lower than – 1 percent. We then calculate how much each country is virtually losing compared with the allocation received under the MFF 2007-2013.

Table 1 shows the results. Unsurprisingly, the capping impacts only on new Member States, as they are those that received the largest amounts of Structural and Cohesion Funds as a share of their GDP. But some of them are losing more than others.

 

Table 1: Loss in Structural and Cohesion Funds compared with 2007-2013

Source: Bruegel based on Benedicta Marzinotto, “A European fund for economic revival in crisis countries”, Bruegel Policy Contribution, February 2011 and Eurostat.

 

 


[1] The data for 2007-2013 stem from /publications/publication-detail/publication/504-a-european-fund-for-economic-revival-in-crisis-countries/#.URt3pPJy7gE

 

 


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read article Download PDF More on this topic
 

Working Paper

European Union cohesion project characteristics and regional economic growth

A new approach, which estimates 'unexplained economic growth', provides insights into the types of European Union cohesion projects that produce better economic results for regions.

By: Zsolt Darvas, Jan Mazza and Catarina Midões Topic: European Macroeconomics & Governance Date: February 4, 2021
Read about event More on this topic
 

Past Event

Past Event

The role of Cohesion policy in the fight against COVID-19 with Elisa Ferreira

How can cohesion funds help the National, regional and local communities that are on the frontline in countering the coronavirus and the resulting economic crisis.

Speakers: Jim Brunsden, Maria Demertzis and Elisa Ferreira Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 21, 2020
Read article More on this topic
 

Blog Post

Cross-border, but not national, EU interregional development projects are associated with higher growth

Our calculations reveal that places where EU regional development projects bind together participants from different countries experience higher economic growth. Purely national interregional projects, on the other hand, are not associated with such benefits. The results hold across regions of different levels of income and consider the effects of other growth-determinants. Cross-border projects might bring efficiency gains, unlock synergies and provide knowledge transfers, boosting activity, with gains going beyond the projects’ scope. Cross-border projects could provide perhaps the only rationale for the continued cohesion/regional funding of more developed regions.

By: Zsolt Darvas, Jan Mazza, Catarina Midões and Bruegel Topic: European Macroeconomics & Governance Date: October 14, 2019
Read article More on this topic More by this author
 

Podcast

Podcast

Deep Focus: Making a success of EU cohesion policy

Bruegel senior fellow Zsolt Darvas talks to Sean Gibson in this Deep Focus podcast about how the EU can improve its cohesion policy, citing the best examples of its implementation and stressing the methodological difficulties in measuring its effectiveness.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: June 20, 2019
Read article More on this topic More by this author
 

Podcast

Podcast

Director’s Cut: A strategic agenda for the incoming EU presidents

In this Director’s Cut of ‘The Sound of Economics’, Bruegel’s Guntram Wolff and Maria Demertzis talk through their memo to the new presidents of the European Commission, Council and Parliament, outlining the specific measures that should be implemented in order to tackle the most formidable challenges arising in the next five years.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: June 12, 2019
Read article Download PDF More on this topic
 

External Publication

Effectiveness of cohesion policy: learning from the project characteristics that produce the best results

This study by Zsolt Darvas, Antoine Mathieu Collin, Jan Mazza, and Catarina Midões analyses the characteristics of cohesion policy projects that can contribute to successful outcomes. Their analysis is based on a literature survey, an econometric analysis and interviews with stakeholders. About two dozen project characteristics are considered, and their association with economic growth is studied using a novel methodology. Based on the findings, the study concludes with recommendations for cohesion policy reform.

By: Bruegel, Zsolt Darvas, Antoine Mathieu Collin, Jan Mazza and Catarina Midões Topic: European Macroeconomics & Governance Date: June 11, 2019
Read article More on this topic
 

Blog Post

A European atlas of economic success and failure

Economic growth was diverse across EU regions, yet it is crucial to control for region-specific factors in assessing growth performance. We find that there are rather successful regions in many EU countries, suggesting that the EU can provide a good framework for growth. Yet the worst performers are more concentrated in some countries, suggesting that country-specific factors can play a major role in regional development.

By: Zsolt Darvas, Jan Mazza and Catarina Midões Topic: European Macroeconomics & Governance Date: June 3, 2019
Read article Download PDF More on this topic
 

Policy Contribution

How to improve European Union cohesion policy for the next decade

This policy contribution investigates the performance of the design, implementation and effectiveness of cohesion policy, the most evaluated EU tool for promoting economic convergence. By analysing the effects of cohesion policy on economic growth through reviewing literature, conducting empirical research by comparing regions, as well as considering attitudes and expectations collected through interviewing stakeholders, the authors provide reform recommendations.

By: Zsolt Darvas, Jan Mazza and Catarina Midões Topic: European Macroeconomics & Governance Date: May 23, 2019
Read article Download PDF
 

Policy Contribution

Promoting sustainable and inclusive growth and convergence in the European Union

This Policy Contribution was written for the Informal ECOFIN Meeting, Bucharest, 5 April 2019. The authors look at the EU’s economic agenda, discussing the priorities for the next five years.

By: Maria Demertzis, André Sapir, Guntram B. Wolff and Bruegel Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: April 4, 2019
Read article Download PDF More on this topic
 

Parliamentary Testimony

Effectiveness of cohesion policy: Learning from the project characteristics that produce the best results

Testimony at the Committee on Budgetary Control of the European Parliament.

By: Zsolt Darvas, Antoine Mathieu Collin, Jan Mazza, Catarina Midões and Bruegel Topic: European Macroeconomics & Governance Date: March 27, 2019
Read article Download PDF More on this topic
 

External Publication

The EU’s Multiannual Financial Framework and some implications for CESEE countries

Bruegel scholars Zsolt Darvas and Guntram Wolff contributed to the September 2018 edition of the OeNB's Focus on European Economic Integration.

By: Zsolt Darvas and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: September 12, 2018
Read article More on this topic
 

Blog Post

How large is the proposed decline in EU agricultural and cohesion spending?

Cohesion spending is proposed by the Commission to increase by 6% in the next MFF, but inflation is expected to reduce the real value of such spending by 7%. The gradual convergence of the least developed regions to the EU average reduces the need for cohesion spending. Common agricultural spending is proposed to be cut by 4%, while if we consider inflation too, the reduction in real value is 15%.

By: Zsolt Darvas and Nicolas Moës Topic: European Macroeconomics & Governance Date: May 4, 2018
Load more posts