The Impact of CAP and EU Cohesion Support on Growth and Convergence of the Eastern Slovenia Region in the Period 2007-2013

The paper investigates economic performance of the Eastern Slovenia region in the changed economic and policy environment after the accession to the EU. The likely impacts of public expenditure in the field of cohesion and agricultural policy in the period of the Community financial perspective 2007-2013 are analysed by the regional InputOutput model estimated with modified GRIT methodology. Results of the impact analysis carried out by application of various policy scenarios suggest that: (i) the analysed funds can significantly contribute to the overall output growth of the regional economy; (ii) EU budgetary inflows contribute to economic convergence of the region; (iii) differences between the projected impacts primarily depend on the regional division of Slovenia at the NUTS 2 level; (iv) favourable prospects can be impaired by various limiting factors. Concerning the impacts of CAP expenditure, the paper argues against the popular opinion about its low redistributive and short-term effects.