Geoscience Reference
In-Depth Information
30
25
20
15
1992
10
1996
2000
2004
5
0
2000
1992
FIGURE 4.4. Distribution by Country of Structural and Cohesion Funds (
Source:
Author's elaboration on data from European Commission (2004))
per capita GDP below 75% of EU average; (2) to ameliorate the costs of struc-
tural adjustment in regions with industrial, service, or fisheries sectors facing
major change, or deprived urban areas; and (3) for those areas not affected by
(1)or(2), to improve human capital, through support for improvement of edu-
cation and training systems. In addition, the implementation of the European
Monetary Union as a result of the Maastricht Treaty brought the Cohesion
Funds into play. To be able to join the euro, member countries had to meet
a series of tight fiscal and budgetary criteria.
4
Since the reforms necessary to
meet these criteria could potentially harm the growth potential of the poorest
members of the Union at that time (Greece, Ireland, Spain, and Portugal), the
Cohesion Funds were adopted to overcome this possibility. Over the years, the
Irish economic miracle and the enlargement to the East in 2004 have altered
the list of potential beneficiaries of these funds, which now include Greece,
Spain, Portugal, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, Slovakia, and Slovenia.
Figure 4.4
presents a detailed break
4
These
convergence criteria
included (Hix
2005
: 315): Price Stability (an average inflation rate
no greater than 1.5% above the inflation rates of the three best-performing member states);
Interest Rates (an average nominal long-term interest rate no greater than 2% above the interest
rates of the three best performing member states); Government Budgetary Position (an annual
current account deficit not exceeding 3% of GDP and a gross public debt ratio not exceeding
60% of GDP); and Currency Stability (fluctuations of less that 2.5% around the central rate of
the narrow band of the Exchange Rate Mechanism for at least two years, with no devaluations).
