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EVOLUTION IN THE ABSORPTION OF THE STRUCTURAL AND COHESION FUNDS IN ROMANIA. A COMPARISON TO OTHER EUROPEAN UNION MEMBER PowerPoint Presentation
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EVOLUTION IN THE ABSORPTION OF THE STRUCTURAL AND COHESION FUNDS IN ROMANIA. A COMPARISON TO OTHER EUROPEAN UNION MEMBER - PowerPoint PPT Presentation


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EVOLUTION IN THE ABSORPTION OF THE STRUCTURAL AND COHESION FUNDS IN ROMANIA. A COMPARISON TO OTHER EUROPEAN UNION MEMBERS . Phd Corina BERICA Professor, Ph.D Vasile COCRI Ş Faculty of Economics and Business Administration Departament of Business Administration

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EVOLUTION IN THE ABSORPTION OF THE STRUCTURAL AND COHESION FUNDS IN ROMANIA. A COMPARISON TO OTHER EUROPEAN UNION MEMBERS

Phd Corina BERICA

Professor, Ph.D Vasile COCRIŞ

Faculty of Economics and Business Administration

Departament of Business Administration

“Alexandru Ioan Cuza” University of Iasi, Romania

content
Content

Introduction

Data

Methodology

Empirical results

Conclusions

i introduction
I. Introduction

According to the last statistics offered by the European Commission, we are on the last place regarding the absorption rate of the Structural and Cohesion Funds

The comparisons and the rankings among the other EU members are frequent. Beside the different economical development, the multiannual planning of these funds have encountered differences from several perspectives. The economical context can have an impact which often manages to influence any decision made at macro-economical level.

The impact created by the absorption of the Structural Instruments gives the measure of this situation, no matter if we would occupy the fifth place or the last one among the rest of the EU members. First of all we will demonstrate by an econometric regression if the internal absorption of the funds received has an impact upon the unemployment rate in Romania, during 2007- February 2012.

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PROGRAMMING 2007-2013

Tabel 4: Cohesion Policy during 2007-2010

Graphic.2: Projects contracted per intervention type during 2007-2010

Source: KPMG, EU Funds in Central and Eastern Europe, Progress report 2007–10, March 2011

ii data
II. Data

The purpose of this section is to analyse the efficiency of the Structural and Cohesion Funds using Romania’s example for the period 01.2007- 02.2012, based on data with monthly frequency. For fulfilling the purpose we have used a simple linear regression model: Y=α+β*X, where Y= dependent variable, X= independent variable, and α and β the parameters of the regression equation. We plan to quantify econometrically:

the relation between the unemployment rate – labelled as “SOMAJ” and the value of the payment towards the beneficiaries (lei) “PLATI”;

The dependent variable (Y) is the unemployment rate and the value of the payments towards the beneficiaries are independent variables (X). We choose unemployment rate due to the lack of data with monthly frequency available for other macroeconomic variables. The choice of a variable with quarterly frequency (as GDP) would have put at doubt the results of the empirical testing because of the reduced number of observations.

iii methodology
III. Methodology

We have chosen to test an econometric model concerning the impact of the payment towards the beneficiaries (lei) “PLATI” upon the the unemployment rate.

The econometric analysis is based on the E-Views soft for estimating a simple linear regression.

The source of the data is represented by the data bases of the National Institute of Statistics and of the Ministry for European Affairs

iv 1 empirical results
IV(1). Empirical results

The Unit Root test shows that the variable “SOMAJ” is stationary in the first

difference at the level of 10%, the other variable being stationary at any level, still

from the first difference. The econometric results of the first testing show that there is

a reverse link betweenthe values of the payment toward the beneficiaries in the

context of the Operational Programmes and the unemployment rate inside the

Romanian economy.

iv 2 empirical results
IV(2). Empirical results

The results obtained, using this model, contradict the unanimous opinion of the specialists according to which the Structural and Cohesion Funds contribute to the

economical growth. The possible explanations could be:

- the time gap in which the beneficial effects of these irredeemable funds are felt in economy, the transmission mechanism being made more difficult by the

negative implications of the economical and financial crisis;

- many of these projects are still in progress;

- the analysed period is too short for emphasizing a convincing result (financial allocation being for the period 2007-2013).

v conclusions
V. Conclusions
  • For answering to the numerous questions, suspicions, doubts regarding the Structural and Cohesion Funds we have tried to analyse all the stages that define them. We have brought arguments for involving the Cohesion Policy proposed by the European Community by presenting its general framework.
  • Unfortunately we cannot change the reality and Romania continues to have problems regarding the beneficiaries and the authorities who supervise and implement these funds but, the absorption of the European funds would generate economical growth and the bigger the economical growth, the lower the burden of the external debt.
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Corina BERICA

corina.berica@yahoo.com