CURRENT CONSIDERATIONS ABOUT COST-BENEFIT ANALYSIS ANDABSORPTION OF THE STRUCTURAL AND COHESION FUNDS USED FOR INVESTMENT PROJECTS FROM ROMANIA

Meral Kagitci and Cristian Busu

Revista Economica, 2012, vol. Supplement, issue 4, 387-393

Abstract: The purpose of this article is to point out the poor absorption problem not only in Romania but also in other Member States of the European Union in terms of Structural and Cohesion Funds At the same time I will point out that the use of the Cost Benefit Analysis (CBA) has big flaws when it comes to funding public investment decisions in the EU cohesion policy. In terms of the Cost Benefit Analysis when dealing with the purpose of using ex-ante (that is a priority of any public commitment to the project) we find that the recipient is in full correlation with purpose and benefits, and at the same time if the winning project needs community support. This in turn leads to the use of "deficit financing method" when determining the level of the European Union Grants allotted to Member States. On this basis Romania has a very small absorption degree of Structural and Cohesion Funds not only due to the fact that it is one of the youngest members in the European Union, but also due to the poor use of financial analysis methods like the Cost Benefit Analysis.

Date: 2012
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