ECONOMIC EFFECTS OF CEE COUNTRIES
               INTEGRATION INTO THE EUROPEAN UNION


                            Gheorghe Zaman, Professor PhD
       Senior Researcher, Director of the Institute of National Economy, Correspondent Member of the Romanian Academy
                                  gheorghezaman@ien.ro


ABSTRACT: The integration of Central and Eastern Europe (CEE) countries into the
European Union is supposed to bring them significant benefits. Along with the effects coming
from changes in tariffs, accession to the EU internal market and free labor movement on
GDP, consumption and terms of trade, the absorption of EU funds could help the process of
convergence and catching up. Discussing the results of two "extreme" scenarios (full
absorption of funds or non absorption at all, assumptions considered as not realistic) by the
application of HEROM model for Romania, the study attempt to assess the impact of EU
structural funds on foreign trade development, under the circumstances of different
absorption rates, finding a stronger impact on exports compared with imports. However,
adverse effects of the current international financial crisis could occur, affecting also the
prospects for the Romanian economy.

Keywords: Economic integration, EU policy of economic and social cohesion, structural funds,
absorption capacity, economic development, macroeconomic modeling and forecasting.

JEL Codes: C53, E17, F15, F36, F43, F47, O19.