THE IMPACT OF EU FUNDS ON THE DEVELOPMENT OF TRANSITION ECONOMIES

European Union consists of countries which are very different considering their stage of development, economic characteristics, social policy and living standard quality. The EU funds should contribute to the development of transition economies through reducing regional disparities between transitio...

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Bibliographic Details
Main Authors: Lovrinovic, Tea, Nakic, Martina
Format: Conference Proceeding
Language:English
Subjects:
Area planning & development
Bananas
Cocoa
Cooperation
Design build construction
Entrepreneurship
Events planning
Financial instruments
GDP
Gross Domestic Product
Infrastructure
Macroeconomics
Per capita
Regions
Transition economies
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Summary:European Union consists of countries which are very different considering their stage of development, economic characteristics, social policy and living standard quality. The EU funds should contribute to the development of transition economies through reducing regional disparities between transition economies and the rest of EU member states and promoting growth. Late 1980s brought the collapse of a communist system in Europe and left behind its economies in an unprepared state for a capitalist tournament. Nowadays, many of these countries belong to a group of new EU members who are still facing a problem of convergence towards their advanced colleagues. The main goal of this paper is to answer whether the EU funds affect the development of transition economies. Findings from the literature up to now result in different conclusions regarding the impact of EU funds, ranging from those which prove that they have a significant effect to the ones who deny the positive influence of EU funds. The empirical analysis in this paper conducted on ten transition economies over 14 years showed that the effect of analyzed EU funds is indeed positive, i.e. EU funds promote growth in transition economies. The planned economy left a certain heritage to transition economies in form of lack of entrepreneurship, infrastructure and weak institutions, which can present an obstacle for efficient EU funds usage. Transition economies should not fall into a trap of EU funding overenthusiasm and they should be fully aware that they, foremost, need to develop and implement appropriate economic policies on their own, after which the EU funds will assist them on their path of convergence.
ISSN:1849-6903
1849-6903