ABSTRACT
The objective of this chapter is to assess the impact of EU intervention in Member States’ (MSs) economies. This will be achieved in five main sections. Given our focus on intergovernmental grants, the first section will focus upon classifying and comparing alternative kinds of grants, and upon selecting the most adequate in terms of the EU’s objectives. The second and third sections will be concerned with modelling the decision-making process following the sequence emphasized in the preliminary remarks of this part of the book. In particular, in the second section we will model the EU fund allocation to MSs, considering the national and regional government response functions to EU intervention. In the third section, we will present a bargaining model formalizing the negotiation between the European Commission (EC) and MSs authorities, leading to the identification of the policy environment within which project investment co-funded by the EU may take place. The fourth section will consider the overall impact of EU intervention upon MSs economies, considering at the same time the EU impact through the fund budgeting and the bargained policy setting. Finally, in the fifth section, additional remarks will be made on some aspects of the modelling.
