Macro-regional evaluation of the Structural Funds using the HERMIN modelling framework



for all programmes, we were obliged to use the published financial data that are
available for Greece. Consequently, while the actual patterns of Structural Funds
impacts are a little artificial, the smoothed average effect is probably fairly realistic.
This suggests that, in the case of the Greek Structural Funds, the model results should
not be used to explore dynamic impacts within the period 1994-99, but should be used
to gauge medium and long-term impacts. In the cases of Ireland, Portugal and Spain,
the planned and actual Structural Funds 94-99 expenditures did not differ greatly from
each other.

In Table 2 the impact of the Structural Funds on aggregate real GDP at market prices
(as a percentage change relative to the no- Structural Funds baseline-1993), and on the
unemployment rate (as a
difference relative to the no- Structural Funds baseline-1993)
are shown.

Table 2: Structural Funds 94-99 impacts on GDP (GDPE) and unemployment
(UR)

______Greece______

_______Ireland_______

______Portugal______

________Spain_______

GDPE

UR

GDPE

UR

GDPE

UR

GDPE

UR

1993

0

0

0

0

0

0

0

0

1994

2.01

-1.38

1.61

-0.96

2.72

-2.21

1.10

-0.98

1995

1.94

-1.19

2.02

-1.07

2.78

-1.76

1.18

-0.83

1996

1.95

-0.97

2.17

-0.92

2.87

-1.31

1.25

-0.57

1997

1.90

-0.68

2.34

-0.73

3.30

-0.73

1.32

-0.19

1998

2.03

-0.40

2.76

-0.51

4.04

-0.16

1.39

+0.30

1999

2.16

-0.31

2.83

-0.35

4.66

-0.05

1.39

+0.60

2000

0.44

+1.00

1.56

+0.53

2.20

+1.93

0.18

+1.78

2005

0.71

+0.68

1.20

+0.49

2.40

+1.09

0.63

+0.38

2010

0.66

+0.58

1.00

+0.40

2.06

+0.82

0.58

+0.35

The Structural Funds raises the level of Greek GDP (measured at constant market
prices) by about 2 percent over the “no- Structural Funds” baseline during the period
1994-1999. This impact falls to below 0.5 percent in 2000, but increases gradually to
just under 0.7 percent by the year 2010. In the early years, the Structural Funds
reduces the unemployment rate by about 1.4 percentage points (in the initial year), but
this declines to a reduction of only 0.3 percentage points by 1999. After the demand-
side stimulus is removed, the unemployment rate rises again, mainly because
productivity is now higher than in the “no- Structural Funds” case. But of course in
practice one would never observe this “pure” impact, since in the post- Structural

18



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