The macroeconomic situation in the EU over the 2007-2013 programming period : ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF) : WP1: synthesis report

The purpose here is to describe the macroeconomic conditions which existed in EU Member States over the 2007-2013 period and to indicate their potential impact on the programmes that were planned to be undertaken. This is important to take account of when assessing both the way that the programmes were implemented and their outcomes as well as the changes which occurred over the period to what was initially planned. The economic situation which has prevailed across most of the EU over the period during which the 2007-2013 programmes have been carried out has been very different from what it was at the time they were formulated. In 2007, after several years of fairly continuous and relatively high growth in all but one or two countries, which in many cases stretched back to 2000 and before, it was natural to assume that this would persist over much of the programming period. Instead, the EU has gone through the worst economic recession since the inter-war years, employment has declined and the number of people out of work has risen to levels not seen in a generation. Although there was some economic recovery in some Member States following the global recession in 2008-2009, this was by no means general and most of the countries concerned slipped back into recession or experienced very little growth in 2012-2013. Others, especially those in the south of the EU, suffered an almost continuous decline in GDP over the 5 years 2008-2013. In the two years 2013-2015, there was again some economic recovery virtually throughout the EU, in the sense that GDP increased, but it was slow in most countries. In this context, nearly all countries have experienced problems of public finances. The economic recession in the early years of the programming period led to government revenues from taxes falling and an increasing need for social expenditure to provide income support for the many losing their jobs or unable to find work. At the same time, special measures implemented to counter the downturn in economic activity and to try to assist sectors hard hit by the financial crisis (banking and construction, in particular), or by the collapse in global demand (such as the car industry), as well to help keep people in jobs (such as short-time working schemes) added to government spending. While the increased public expenditure and reductions in taxation were successful in moderating the extent of the economic downturn and avoiding a prolonged recession - at least in most countries - they reinforced the effects of the downturn itself on public finances and led to large budget deficits and mounting levels of government debt.