ECONOMY

Look beyond the figures

Claims that Greece could face a dim future as EU structural funds taper off after 2006 often ignore the long-term benefits of projects funded by Brussels, Eurobank said in a research note yesterday. Such concerns have often been voiced by a wide cross section of interests, ranging from industrialists to political figures, to the man on the street. EU structural funds, which accounted for nearly a third of Greek economic growth in recent years, have been instrumental in getting a number of major projects off the ground. From highways to air traffic control to IT projects, EU funds have helped Greece to catch up with other EU countries in terms of infrastructure and quality of life. The third tranche of funding from Brussels is slightly over 21 billion euros for about 9,200 projects over the 2000-2006 period. Greece, one of the bigger recipients of EU funds, is expected to get substantially less in the fourth tranche, as Brussels focuses on the new but poorer countries set to come on board next year. «The main problem with focusing almost exclusively on the size of EU inflows per se is that this approach tends to significantly underestimate the importance of the long-term aggregate productivity enhancing effects of structural fund investments,» wrote analyst Constantine Papadopoulos. Part of this could be due to the fact that «the effects will not fully materialize unless the investments have been completed and brought on stream,» he stressed. He said that focusing on the size of EU funds also underestimates the true impact of different types of investments in the development process.