The Impact of EU Cohesion Funds on Macroeconomic Developments in the Visegrád Countries After the 2008–2009 Financial Crisis

Adam Czelleng () and Andras Vertes ()
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Adam Czelleng: GKI Economic Research
Andras Vertes: GKI Economic Research

Chapter Chapter 4 in Does EU Membership Facilitate Convergence? The Experience of the EU's Eastern Enlargement - Volume II, 2021, pp 67-87 from Palgrave Macmillan

Abstract: Abstract This chapter investigates how cohesion funds were spent and how these funds impacted economic developments in the Visegrád countries (Czechia, Hungary, Poland, Slovakia) on short, medium and long terms. Czechia has been the most developed country in the region, Poland and Slovakia were dynamically converging to the European average while the latter also joined the euro-zone and Hungary has significantly improved its external and internal imbalances. The analysis shows that the sizable spending from cohesion funds had a major impact on growth, investment, external and fiscal conditions. Cohesion funds generally have their primary economic impact throughout investments (both public and private). Funds aim to increase the country’s growth potential in the long run. Spending on competitiveness (R&D, education, health, etc.) might have smaller impact on short term but can have significant long-term effect because it provides more attractive conditions for private investments. While on the other hand, financing private projects can generate significant impact on the short term but the additional impact dissipates quickly. The increased growth potential can generate additional tax revenues in the long term.

Keywords: EU funds; Visegrád countries; Impact assessment; DSGE (search for similar items in EconPapers)
JEL-codes: E01 E17 E27 H59 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:pal:stuchp:978-3-030-57702-5_4

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DOI: 10.1007/978-3-030-57702-5_4

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