Adapting to European enlargement: Spain and cohesion policy

Spain has enjoyed large net inflows of public funds from the European Union (EU) since accession in 1986. These funds have contributed to a strong growth performance, a largely successful economic transition, and economic convergence. Enlargement of the EU has transformed Spain's relative position from that of a poor country to that of a middle-income one, thus reducing its claim on EU funding. Lower levels of funding under the next EU financial perspective (2007-13) and a reformed cohesion policy will affect the model of economic development and will have domestic and external political consequences. Adapting to European enlargement, a new funding relationship with Europe and a reformed cohesion policy will require a rethinking of economic policy if the momentum of convergence is to be maintained.