Structural Fund Absorption: A New Challenge for Romania?

by Zaman, Gheorghe and Georgescu, George
Published in Romanian Journal of Economic Forecasting
, 2009, volume 10 issue 1, 136-154

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Many European countries, especially during the early post-accession years, have faced difficulties in absorbing the structural funds from the EU budget, the most cited reasons being generated by the lack of a coherent long-term vision of the authorities, insufficient resources to co-finance projects, low dministrative capacity at central and local levels, lack of inter-institutional coordination, failures of public-private partnerships, insufficiently skilled human resources, causes which can undoubtedly be noticed also in the case of Romania. By a strategic approach starting from the HEROM econometric model (the Romanian version of the HERMIN model) the study tries to assess the macroeconomic effects of structural funds on foreign trade in cases of different absorption rates, finding that these funds have a stronger impact on export growth as compared to that of imports. The EU structural funds absorption represents an opportunity to sustain economic growth and to reduce the development gap which, under the circumstances of global recession, is becoming a new challenge for Romania.

Keywords: European integration, economic and social cohesion policy, structural funds, absorption capacity, economic development, econometric models
JEL Classification: C53, F15, F36, F43, O19