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Drawing on the experience of Structural Funds, the paper argues that cohesion may be beneficial to growth under certain conditions. It develops some arguments based on recent economic theory and empirical evidence on the trade-off between cohesion and growth and draws some lessons for future policy.
The paper discusses key policy issues faced by new member States as they prepare for the next financial perspective, which is expected to address key challenges of the European Union growth and convergence. While expenditure of the EU budget over the 2007-2013 period can only be a partial solution to economic problems faced by member states, it will nonetheless be an important resource for new member states and can help them to accelerate their path of convergence, if used wisely. In order for EU funds to have a significant and positive impact, new member States must overcome absorption problems on macroeconomic, financial and administrative/institutional levels. In the paper we argue that the final outcome in terms of growth and fiscal equilibrium in new member States in the period of the next financial perspective will depend on the objective they choose (real vs nominal convergence) and their ability to resolve absorption related problems, particularly problems with financial and administrative absorption.
Slovak integration into the EU brings much discussion concerning the readiness of the country for such a serious socio-political step, as well as its ability adapt to this environment. Political representatives view Slovakia’s readiness and its future in the enlarged European context subjectively and their optimism or pessimism is a result of their position in the political scene. This article presents basic characteristics of the current extend of Slovak and other accession countries’ social-economic development, these figures are in turn compared to average measures and statistics of previous EU- 15. According to data, these differences are quiet pronounced, not only between old and new member states but also within these two groups. These differences will signi- ficantly complicate and probably slow the process of convergence among EU states. Data further suggest that expectations among accession countries that they will soon equal the level of the EU-15 are over ambitious and non-realistic. These warnings are fully in accordance with Sapir’s Report, which was mandated by Romano Prodi, the chairman of the European Commission. Indications are that more detailed study by academics is required.