Evaluation of Benefits Gained by EU-15 States As a Result of the Implementation of Cohesion Policy in Poland
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Evaluation of benefits gained by EU-15 States as a result of the implementation of cohesion policy in Poland 2010 update 2010 Warsaw Author: Łukasz Skrok Authors of the original report: Jakub Growiec, Julian Zawistowski (editor), Łukasz Skrok, Piotr Bartkiewicz, Maciej Lis, Karol Pogorzelski, Andrzej Regulski Cooperation: Piotr Bartkiewicz, Jan Gąska, Andrzej Regulski Coordination: Julian Zawistowski Evaluation of benefits gained by EU-15 States as a result of the implementation of cohesion policy in Poland – 2010 update © Ministry of Regional Development Warsaw 2010 Study prepared by Institute for Structural Research commissioned by the Ministry of Regional Development Issuer: Ministry of Regional Development ul. Wspólna 2/4, 00-926 www.mrr.gov.pl www.funduszeeuropejskie.gov.pl ISBN: 978-83-7610-258-0 Department of Structural Policy Coordination Phone: (+48 22) 461 39 07 Fax: +(48 22) 461 32 63 e-mail: [email protected] e-mail: [email protected] Translation – Contact Language Services Free of charge MINISTRY OF REGIONAL DEVELOPMENT Evaluation of benefits gained by EU-15 States as a result of the implementation of cohesion policy in Poland Updated in 2010 Table of contents Introduction . 5 1. Research context . 8 1.1. Economic sense of EU cohesion policy . 8 1.2. EU Cohesion Policy . 11 1.2.1. EU Cohesion Policy in Europe after 2004 . 12 1.2.2. Implementation of EU Cohesion Policy in Poland . 16 1.3. Expected channels of impact of the implementation of EU Cohesion Policy in Poland on EU-15 and net payer states . 19 1.3.1. Short‑term effects . 21 1.3.2. Long‑term effects . 22 2. Evaluation of direct benefits gained by EU-15 companies as a result of the implementation of EU cohesion policy in Poland . 24 3. Evaluation of benefits gained by EU-15 States as a result of the implementation of cohesion policy in Poland – research method . 26 3.1. The objective and scope of the research . 26 3.2. Research method . 28 3.2.1. Data used . 29 3.2.2. Problems with data availability and imputations . 31 3.2.3. Research assumptions . 32 3.2.4. Macroeconomic analysis step by step . 34 4. Evaluation of total benefits (direct and indirect) gained by EU-15 States as a result of the implementation of EU cohesion policy in Poland – update of results . 39 4.1. Update of results . 39 4.2. Survey results . 40 4.2.1. Additional demand on goods and services imported from EU-15 States . 41 4.2.2. Additional demand for imported goods and services manufactured in particular economy sectors of EU-15 States . 44 4.2.3. Impact on the growth of profits and payroll funds among EU-15 companies and taxes paid by them in mother countries . 47 4.2.4. Impact on the growth of profits and payroll funds of companies from particular sectors of EU-15 economies and taxes paid by them in mother countries . 51 4.2.5. Changes in the value and structure of goods and services exported by the EU-15 countries to Poland as a result of emergence of an additional production, consumption and investment demand . 54 4.2.6. Influence of increase in trade with Poland on the GDP in the EU-15 countries . 56 4.3. Total benefits – summary and conclusions . 63 5. Summary . 65 6. Bibliography . 68 7. Methodological Appendix . 70 7.1. Validity of the EU cohesion policy assumptions according to the economic literature . 70 7.2. Microeconomic research . 72 3 7.2.1. Methodology of CAWI survey research . 73 7.2.2. Survey results . 81 7.2.3. Detailed results of the CAWI survey . 89 7.2.4. Methodology of extrapolation for 2009-2015 . 91 7.2.5. Microeconomic forecast . 92 7.3. Statistical tables presenting the results of the macroeconomic research . 96 7.5. Questionnaire used in CAWI survey – exemplary path . 103 4 Introduction This report presents the updated results of the comprehensive research carried out in 2008-2009 by the Institute for Structural Research for the Ministry of Regional Development. The study was devoted to the benefits gained by EU-15 States as a result of the implementation of EU Cohesion Policy in Poland. The analysis covers both the benefits gained directly by companies from these countries resulting from the participation in Cohesion Policy, as well as benefits obtained by entire economies – the research applied both micro and macroeconomic approach to the analysed issue. It needs to be underlined here that the research has not analysed the overall impact of the Polish accession to EU, which is undoubtedly far greater, but only an isolated effect of Cohesion Policy implementation. Complete results of initial analyses have been presented in the report entitled Evaluation of benefits gained by EU-15 States as a result of the implementation of cohesion policy in Poland of 2009. A much wider accessibility to data allowed the research to be updated in 2010. In order to retain coherence, the larger part of the report of 2009 has been saved. This means unavoidable cases of repetitions. Elements not subject to update and not directly linked to updated parts have been omitted. A significant difference between the original report and its updated version is the scale of final results of indirect impact evaluation. The research, results of which were used for the 2009 report, indicated that the total additional export from EU-15 States to Poland resulting from the implementation of projects co-financed from Community funds amounted to EUR 25 billion, but the newest estimations indicate the revenue in the amount of EUR 38 billion. Such a considerable change results mostly from the possibility to use more recent data, in particular concerning input- -output analyses (Eurostat data). As far as it was possible to use in 2009 some indices estimated on the basis of data from 2000 (or combined data from 2000 and 2004), then in 2010 complete data for 2005 were available. This also allowed the introduction of detailed modifications of research methods, which were adjusted in 2009 to take account of data availability. Meanwhile, trade exchange between Poland and EU-15 States intensified in 2000-2005, which was perceived as a very important process. This phenomenon could have been observed and identified in the research period of 2008-2009 through macroeconomic data analysis, despite the lack of sufficient data. However, application of macroeconomic data in calculations would require the adoption of several other ad hoc assumptions. Taking into account the research objective, this possibility has been rejected in favour of the practice commonly used in scientific research, i.e. accepting con- servative assumptions. Thus, as far as the results presented in the 2009 report indicated additional exports, assuming trade intensity at the level of the year 2000, then the current report also takes into account the influence of market unification within the European Union and a more broadly understood internationalisation process regarding production. Benefits gained by EU-15 States have been divided into direct and indirect ones. The former is understood as the situation, where a company from an EU-15 State is a contractor of a project co-financed from Community funds, executed in Poland. In such situation, contributions of EU-15 States into funds return to payer States in the form of payments for goods and services delivered 5 to Poland. The estimations applied in this study indicate that this happens to 5 % of funds spent in Poland. A direct benefit gained this way by EU-15 States in 2000-2008 amounts to PLN 4.6 bil- lion (EUR 1.18 billion), at fixed prices of 2008. These data concern projects implemented as part of pre-accession programmes and the National Development Plan for 2004-2006. However, indirect benefits are far greater, as they result from an increased demand of Poland – thanks to the implementation of EU cohesion policy – for imported goods and services. These imports are threefold: production (i.e. imports of goods and services used in production processes in Poland), consumption and investment. Occurrence of these imports is related both to the fact that the implementation of projects co-financed from Community funds generates the demand for subcontracting and delivery of goods and services related to project needs, as well as to more long‑term effects of economic modernisation of Poland and increasing its production potential, resulting in the growth in demand for various goods and services. According to estimations included in this study, the total (i.e. direct and indirect) benefits gained by EU-15 States in 2004-2009 in relation to the implementation of EU cohesion policy in Poland amount to EUR 4.5 billion (PLN 17.8 billion) at prices of 2008, i.e. 27 % of the total value of funds flowing into Poland under this policy. We need to bear in mind, however, that these benefits are unevenly distributed over time. This happens due to the fact that the amounts of co-financing that Poland was entitled to within the 2004-2006 programming period (expended until 2008) were significantly lower than the amounts for 2007-2013. Delays in the emergence of indirect effects, particularly those resulting from the increased purchasing potential of Poland, are an important factor. Therefore, according to fore- casts included in this report, we should expect that benefits gained yb EU-15 in 2004-2015 will amount to the total of EUR 37.8 billion (PLN 151 billion), at fixed prices of 2008. Thus, a previously observed effect would constitute only 12 % of the value expected for the entire period of 2004- 2015. With time, the significance of indirect effects will also grow: according to forecasts, they will constitute as much as 91% of all observed effects until 2015.