EconPapers    
Economics at your fingertips  
 

Declining transfer payments on the economic performance in Eastern Germany

Michael Kloß, Robert Lehmann, Joachim Ragnitz and Gerhard Untiedt
Authors registered in the RePEc Author Service: Michael Weber

in ifo Dresden Studien from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: The European Union currently discusses the new classification of regions for the EU Structural Funds period after 2013. The flow of structural funds into a region depends on the region’s economic performance in comparison to the EU-27 average. Classifying Eastern German regions by means of actual figures, however, would overestimate Eastern Germany’s economic strength as it is still highly reliant on transfer payments. These transfer payments will decrease significantly up to 2020. This study quantifies the impacts of declining transfer payments on key national accounts. The decline of transfers will reduce the Eastern German gross domestic product by 2 %, ceteris paribus. As the better part of transfers is used for consumption of non-tradable goods, the impact on the service sector and on construction will be stronger than the effect for the manufacturing industry. Furthermore, declining transfers will cause employment to be 3 % lower. Despite these macroeconomic effects, Eastern Germany will reach a convergence level of 80 % in comparison to the EU-27 average. Hence, the states of Eastern Germany will not qualify for the maximum of structural funds, if the thresholds for EU-transfers remain the same.

JEL-codes: H50 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.ifo.de/DocDL/ifo_Dresden_Studien_63.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ifodrs:63

Access Statistics for this book

More books in ifo Dresden Studien from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe (wohlrabe@ifo.de).

 
Page updated 2025-01-08
Handle: RePEc:ces:ifodrs:63