Challenges of EU and new member states in financial perspective 2007-2013: convergence and absorption of available cohesion resources

The recent agreement on financial perspective 2007-2013 provided new member states with substantial cohesion resources to speed up their real convergence process. The primary objective of the paper is to explore key policy issues, faced by new member states, if they want to successfully absorb available cohesion resources in the next financial perspective and outline their key policy choices and possible outcomes in terms of convergence and stability. The secondary objective is to provide an overview of the financial perspective deal achieved under the UK presidency in light of the main economic challenges of the EU. The main conclusions are: first, new member states need to focus on restructuring their national budget expenditure, if they want to implement cohesion policy in the next financial perspective without compromising fiscal stability and, second, the deal achieved under the UK presidency is a far cry from the original proposal by the European Commission and from proclaimed key economic challenges of the EU for the future (particularly competitiveness), however, it still provides significant convergence support for new member states for a 7-year period.