Synthesis Report - European Commission - Europa

Synthesis Report Ex-post Evaluation of the ERDF 2000-2006
A third important difference between the two models is that QUEST attempts to estimate the
effect of the Structural Funds plus the Cohesion Fund on all EU Member States, while HERMIN is
confined to estimating the effect on those economies which are net recipients of funding. This, in
practice, means the four EU15 Cohesion countries, together with the southern Objective 1 regions
of Italy (the Mezzogiorno) and the Eastern Länder of Germany, plus the 10 countries which
entered the EU in 2004.
QUEST also explicitly models the funding of cohesion policy as well as the expenditure it gives
rise to, so that the effect of policy from countries receiving financial support tends to be offset
either fully or in part if they also contribute to the funding of this support. It is assumed that, in
the absence of cohesion policy, taxes to fund the Community Budget would be lower in the
countries contributing to the Budget and, therefore, the effect of policy is to depress expenditure
and GDP at the same time as policy adds to these as funding is received 40 . QUEST can,
accordingly, be used to estimate the net effect of cohesion policy across the EU and not just its
(gross) contribution to growth in the countries assisted.
Another major difference is that HERMIN is a collection of single country stand alone models and
therefore does not capture the feedback of Structural Funds expenditure from recipient countries
to others and the effects of this on the growth of the latter. QUEST on the other hand is a global
model and does attempt to capture inter-country spillovers. This is potentially important since
many of the countries receiving the largest amounts of funding are reliant on imports for
development. A proportion of the expenditure financed by the Structural Funds, therefore,
returns to the countries which are net contributors to the funding of cohesion policy in the form
of imports from recipient countries. This to some extent offsets the effect of any additional taxes
that they need to raise in order to fund cohesion policy.
4.1.4 The scale and timing of expenditure financed by the Structural Funds
To begin by examining the estimated effects of cohesion policy on the countries receiving the
largest amounts of EU funding, the starting-point is the scale of support received and the timing
of this. Note that it is not possible to distinguish the effect of the ERDF from the other EU sources
of funding in the period, including the Cohesion Fund which went to just four countries in the
EU15 – Greece, Spain, Portugal and Ireland (up to the end of 2003). .Note also that the term
‘Structural Funds’ is used here to include the Cohesion Fund.
The four EU15 Cohesion countries together with the Italian Mezzogiorno and the Eastern German
Länder received a total of EUR 147.2 billion from the Structural Funds (the ESF, EAGGF, FIFG and
ISPA as well as the ERDF) together with the Cohesion Fund for the 2000-2006 programming
period, though this was paid over a slightly longer period up to the end of 2009 (Table 4.1 – data
for 2008 and 2009 are preliminary, based on the figures as at Spring, 2009). This amounted to
around 0.8% of the GDP of the economies in question. Portugal received the largest sum relative
to its GDP (1.5%), followed by Greece (1.3%) and the Mezzogiorno (1.1%), while Ireland received
the smallest sum (0.3%).
40 The alternative assumption that the part of the Community Budget which goes to finance cohesion policy is used
for another purpose is not considered. The taxes in question are assumed to be taxes on wages, which means that
the effect is to raise costs as well as prices and so reduce the demand for exports as well as internal demand.
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