EUROPEAN UNION BUDGET REVISION AND COHESION POLICY REFORM
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The article discusses potential changes in the European Union's Cohesion Policy after 2013. The planned revision of the EU budget announced for 2008-2009 may become an excuse for starting talks on revising both the Common Agricultural Policy (CAP) and Cohesion Policy, the author says. The 15 old EU member states may seek to limit the scope of activities under the Cohesion Policy in a situation in which their own regions may be deprived of structural funds. The main arguments may include the limited effectiveness of Cohesion Policy and the low absorption of funds in new EU member states. Theoretical studies and empirical research show that moving away from Cohesion Policy throughout the EU would be unfavorable to most new member states as well as the European Commission and regional authorities in EU15 countries. Paradoxically, it could also negatively influence the economic development of the less well developed regions in old member states. This explains why the European Commission may be forced to propose far-reaching changes in a bid to increase the effectiveness of cohesion programs and increase the attractiveness of Cohesion Policy for old EU member states. The article includes a simulation of the potential effects of such changes, but, for reasons of space, the author only discusses several possible solutions.
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