FACTORS THAT INFLUENCE THE ABSORPTION OF EUROPEAN FUNDS

The European Union is an economic and political organization of 27 states, that operates through a hybrid system of independent institutions and intergovernmental bargaining of decisions. In the last wave of enlargement many former communist countries joined the EU. The difference between the economic development of these countries and the European average is viewed, therefore the new members are benefiting from EU funds to boost business competitiveness and infrastructure. The European Commission established the general guidelines, and each state was free to establish its own architecture of funding programs respecting the imposed guidelines. This article aims to analyze three factors that could explain a somewhat different absorption level achieved by the new members. Due to the fact that unused funds are reallocated by the European Commission for other purposes their total absorption is essential for obtaining a rapid convergence, therefore identifying factors that can achieve this is essential.