ECONOMIC EFFECTS OF CEE COUNTRIES INTEGRATION INTO THE EUROPEAN UNION

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