**4. The investment programs within the EU for the Central and Eastern Europe countries planned for rural economy development**

Following the accession were initiated assistance programs for the new member states financed from the EU budget in order to revitalize various economic sectors, but especially to ensure rural areas development and environmental protection, down to human rights promotion and protection of external borders.

The immediate economic results for the new member states were represented by export improvements, the access and providing stable position on the European market of small businesses.

The short-term generated effects for the new member states were represented by the following:


**Figure 12.** The land areas used in forestry by the Central and Eastern Europe countries [2].

**Figure 13.** The employment level in the primary sector [2].

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Referring to land areas used for forestry, as shown in Figure 12, Poland with 9 million hectares and Romania with more than 6 million hectares again occupies the top positions, followed by Bulgaria, with almost 4 million hectares, and Latvia with over 3 million hectares. For the rest

Proceedings of the International Conference on Interdisciplinary Studies (ICIS 2016) - Interdisciplinarity and Creativity

Analysing the employed labour force in the primary sector of Central and Eastern Europe countries rural areas (Figure 13), we can see that Poland holds the first place with over 15 million persons employed, followed by Romania with over 9 million people employed and for the next places there are Czech Republic and Hungary with 5 and 4 millions of employed

Also must be shown the direct contribution of the rural areas primary sector to gross national income (GNI) of the Eastern European countries, as shown in Figure 14, (according to Euro‐ pean Union, 2015). Top positions are occupied by Bulgaria and Romania with the highest percentage share of gross national income (GNI), located around 6%. The following levels are

people. Bulgaria has over 3 million people employed in the primary sector.

of the countries, there are areas between 1 and 2.5 million hectares used for forestry.

However, the positive long period effects are expected after joining the EU for the new member states economy related to the following:

	- **•** Achieving an accelerated economic growth.
	- **•** Attracting of direct foreign investment from the European partners.
	- **•** Creating new jobs.
	- **•** The possibility of movement of labour force within the Union.
	- **•** Increasing the trading relations with intra-Community partners.
	- **•** The possibility of attracting structural funds.
	- **•** Rural sector development and agriculture based on the Common Agricultural Policy.

Regarding the membership costs, the new member countries of the EU, contribute to financing the EU budget by a percentage of GNI, set at about 0.7%, a percentage from the proceeds of value added tax (VAT) of about 0.3%, but also from the import duties proceeds applied to all purchased goods from outside the EU, that most part become a revenue for the EU budget. [13, 14].

Thus, the EU's annual budget is about 145 billion Euros, according to European Union [2].

To illustrate how rural areas economies of the EU countries of Central and Eastern Europe are stimulated, the rural development programs with strategic objectives for each country are presented.

Poland was the only EU country that has managed to pass the economic crisis without having experienced any effect. In Poland agriculture occupies almost 12% of the total number of available labour force and gross value added (GVA) is low compared to Western countries, but close to the average of Eastern European countries [15].

Through the Rural Development Programme (RDP), Poland will be able to develop the rural economy through the use of 13.5 billion Euros, of which 8.6 billion Euros from the EU budget and the difference from the state budget.

Followed are the agricultural farms, competitiveness and viability by providing investment aid for nearly 200,000 farms, creating more than 20,000 jobs and encouraging association of agricultural producers.

Investment support will be also directed to environmentally friendly farming according to the European Commission, 2015 [18].

For Romania, we can say that although there is a real economy growth, among the highest increases in the EU, however, the resources for investment financing represented by the EU funds have been insufficiently exploited so far. For example, the absorption of Structural and Cohesion Fund (SCF) was in 2015 up to 63%, its lowest level throughout the EU and for the European Agricultural Fund for Rural Development (EAFRD) has been reported an absorption rate of approximately 82% (Table 2) according to European Commission [3].

An Interdisciplinary Analysis Regarding Economic and Social Development in the Rural Area of EU Member... http://dx.doi.org/10.5772/65417 105


**Table 2.** The situation of EU funds absorption for Romania [3].

**•** Achieving an accelerated economic growth.

**•** The possibility of attracting structural funds.

**•** Creating new jobs.

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[13, 14].

presented.

**•** Attracting of direct foreign investment from the European partners.

**•** The possibility of movement of labour force within the Union.

but close to the average of Eastern European countries [15].

and the difference from the state budget.

agricultural producers.

European Commission, 2015 [18].

**•** Increasing the trading relations with intra-Community partners.

**•** Rural sector development and agriculture based on the Common Agricultural Policy.

Regarding the membership costs, the new member countries of the EU, contribute to financing the EU budget by a percentage of GNI, set at about 0.7%, a percentage from the proceeds of value added tax (VAT) of about 0.3%, but also from the import duties proceeds applied to all purchased goods from outside the EU, that most part become a revenue for the EU budget.

Proceedings of the International Conference on Interdisciplinary Studies (ICIS 2016) - Interdisciplinarity and Creativity

Thus, the EU's annual budget is about 145 billion Euros, according to European Union [2].

To illustrate how rural areas economies of the EU countries of Central and Eastern Europe are stimulated, the rural development programs with strategic objectives for each country are

Poland was the only EU country that has managed to pass the economic crisis without having experienced any effect. In Poland agriculture occupies almost 12% of the total number of available labour force and gross value added (GVA) is low compared to Western countries,

Through the Rural Development Programme (RDP), Poland will be able to develop the rural economy through the use of 13.5 billion Euros, of which 8.6 billion Euros from the EU budget

Followed are the agricultural farms, competitiveness and viability by providing investment aid for nearly 200,000 farms, creating more than 20,000 jobs and encouraging association of

Investment support will be also directed to environmentally friendly farming according to the

For Romania, we can say that although there is a real economy growth, among the highest increases in the EU, however, the resources for investment financing represented by the EU funds have been insufficiently exploited so far. For example, the absorption of Structural and Cohesion Fund (SCF) was in 2015 up to 63%, its lowest level throughout the EU and for the European Agricultural Fund for Rural Development (EAFRD) has been reported an absorption

rate of approximately 82% (Table 2) according to European Commission [3].

In Figure 15 is shown the graphical representation of the EU funds absorption rate.

**Figure 15.** The percentage of EU funds absorption for Romania [3].

The Romanian RDP programme for the 2014–2020 periods has been adopted and its priorities are as follows:


A period of 7 years will be invested in developing the Romanian rural area economy around 9.5 billion Euros, of which 8.1 billion from the EU budget and the difference is financed from the state budget. These investments will lead to the modernization of over 3000 farms and helping to install more than 9000 young farmers so that they will be able to open their business

in agriculture. Over 25,000 new jobs will be available in the rural areas economy and 3000 new businesses will be opened in the field. Also, more than 1.3 million hectares of agricultural land and over 0.8 million hectares of forests will receive payments for the support and maintenance of biodiversity and promotion of environmental protection practices.

For Bulgaria, RDP program includes investments of approximately 2.9 billion Euros by 2020, of which 2.4 billion Euros from the EU budget and the rest representing the contribution from the state budget. The investments will be directed to agricultural and forestry sector, to support small and medium farms, and young farmers who want to launch their business in the field. Approximately 4000 new jobs will be available in new small businesses started up in Bulgarian rural areas, which will lead to the employment of more than 30% of the rural population. [19]

Hungary will have at its disposal 4.2 billion Euros for the development of rural economy, of which 3.4 billion Euros from the EU budget and the rest represents national contribution. They are supported activities related to the restoration, preservation and improvement of ecosys‐ tems, poverty reduction and economic development of rural areas. The aid is expected to start over 2600 investment projects in the agriculture and food industry. Hungary focuses on innovation and directs 3.6% of the RDP towards actions that support innovation and cooper‐ ation projects under the European Innovation Partnership (EIP) [4].

The Czech Republic will be able to invest 3.1 billion Euros in the economy of rural areas, of which 2.3 billion from the EU budget and the rest representing national funding to initiate actions for the development of rural areas by 2020. The priority actions are for enhanced management of natural resources, encouraging environmentally friendly farming practices and ensure increased competitiveness in agriculture and forestry. Over 3400 farms will receive support for investments and nearly 1400 investment projects in forestry technologies, and more than 800 projects in the food industry will receive funding. It will create almost 2000 new jobs in the rural economy, according to European Commission [5].

The Slovak rural areas will benefit of 2.1 billion Euros for development by 2020, of which 1.545 billion Euros from the EU budget and the rest is national co-financing. Investments will be made in the agriculture and forestry sectors aiming an enhanced competitiveness. Over 1200 farms will be upgraded and 400 enterprises in the field of food industry will receive funding.

Other objectives are the rational use of natural resources and encouraging the environmentally friendly agriculture practices. Increasing rural economy will be achieved through investments made in productive enterprises that will generate the creation of about 2000 new jobs [6].

Croatia is the newest EU member and for economic development in rural areas it will have about 2.3 billion Euros, of which 2 billion from the EU budget and the rest from the state budget. Croatia's development strategy is directed towards restructuring and modernization of farms and the food industry. Over 5000 farmers will receive investment support to grow their small farm and about 1000 young people will have the opportunity to become young farmers [7].

Slovenia will use 1.1 billion Euros for implementing the national program for rural economy development, with priorities set for the following:

**•** Restoring, maintaining and improving ecosystems related to agriculture and forestry.


in agriculture. Over 25,000 new jobs will be available in the rural areas economy and 3000 new businesses will be opened in the field. Also, more than 1.3 million hectares of agricultural land and over 0.8 million hectares of forests will receive payments for the support and maintenance

Proceedings of the International Conference on Interdisciplinary Studies (ICIS 2016) - Interdisciplinarity and Creativity

For Bulgaria, RDP program includes investments of approximately 2.9 billion Euros by 2020, of which 2.4 billion Euros from the EU budget and the rest representing the contribution from the state budget. The investments will be directed to agricultural and forestry sector, to support small and medium farms, and young farmers who want to launch their business in the field. Approximately 4000 new jobs will be available in new small businesses started up in Bulgarian rural areas, which will lead to the employment of more than 30% of the rural population. [19] Hungary will have at its disposal 4.2 billion Euros for the development of rural economy, of which 3.4 billion Euros from the EU budget and the rest represents national contribution. They are supported activities related to the restoration, preservation and improvement of ecosys‐ tems, poverty reduction and economic development of rural areas. The aid is expected to start over 2600 investment projects in the agriculture and food industry. Hungary focuses on innovation and directs 3.6% of the RDP towards actions that support innovation and cooper‐

The Czech Republic will be able to invest 3.1 billion Euros in the economy of rural areas, of which 2.3 billion from the EU budget and the rest representing national funding to initiate actions for the development of rural areas by 2020. The priority actions are for enhanced management of natural resources, encouraging environmentally friendly farming practices and ensure increased competitiveness in agriculture and forestry. Over 3400 farms will receive support for investments and nearly 1400 investment projects in forestry technologies, and more than 800 projects in the food industry will receive funding. It will create almost 2000 new jobs

The Slovak rural areas will benefit of 2.1 billion Euros for development by 2020, of which 1.545 billion Euros from the EU budget and the rest is national co-financing. Investments will be made in the agriculture and forestry sectors aiming an enhanced competitiveness. Over 1200 farms will be upgraded and 400 enterprises in the field of food industry will receive funding. Other objectives are the rational use of natural resources and encouraging the environmentally friendly agriculture practices. Increasing rural economy will be achieved through investments made in productive enterprises that will generate the creation of about 2000 new jobs [6].

Croatia is the newest EU member and for economic development in rural areas it will have about 2.3 billion Euros, of which 2 billion from the EU budget and the rest from the state budget. Croatia's development strategy is directed towards restructuring and modernization of farms and the food industry. Over 5000 farmers will receive investment support to grow their small farm and about 1000 young people will have the opportunity to become young farmers [7]. Slovenia will use 1.1 billion Euros for implementing the national program for rural economy

**•** Restoring, maintaining and improving ecosystems related to agriculture and forestry.

of biodiversity and promotion of environmental protection practices.

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ation projects under the European Innovation Partnership (EIP) [4].

in the rural economy, according to European Commission [5].

development, with priorities set for the following:

At least 600 new jobs will be created, and more than 60% of the rural population will benefit from the implementation of development program in Slovenia [8].

Estonia will have to invest in the economy of national rural areas around 0.993 billion Euros, of which 0.823 billion from the EU budget. The priority actions are directed to the environment practices on water, soil and biodiversity. The farms will receive investment support and rural economy will be prioritized for development [9].

Latvia will receive from the EU budget 1.08 billion Euros and with a national contribution of 0.5 billion Euros will have a total of 1.58 billion Euros at its disposal for rural economic development until 2020. At least 3500 farmers will receive support to modernize their farms, to go out with their own products on market and to diversify its product offerings. New jobs in agriculture field will be also created and boost development of organic farming [10].

Lithuania will be able to invest 1.9 billion Euros in the next years until 2020, of which 1.6 billion Euros from the EU budget and the rest from the state budget. Support will be directed for modernizing and improving the economic performance of small and medium farms and nearly 8000 farmers will receive investment aid. Preserving biodiversity, promoting organic farming, creating new jobs and economic development of rural areas are also among the objectives pursued [11].

In Figure 16 is shown graphically for each country the amount of capital values that will be invested in 2014–2020 for the development of rural economies.

**Figure 16.** The graphical representation for the direct investments amount for developing of Central and Eastern Eu‐ rope countries rural economy (2014–2020) [12].

The highest values of investments amounts are directed to Poland and Romania, each country enjoying the EU support, which directly contributes to over 8 billion Euros in development of rural areas of the largest countries in the region, followed by Hungary, the Czech Republic and Bulgaria, with about 3 billion Euro and other Eastern European countries with propor‐ tionally lower values.

As can be seen from the presented data, currently the EU member states in Central and Eastern Europe have now more than ever the opportunity to develop their rural areas economy through direct investment in the primary sector, to modernize farm exploitation, to realize rational exploitation of natural resources, to build establishments of new production facilities in order to ensure new jobs for the inhabitants of rural areas and ensuring a higher standard of living similar to urban areas. These opportunities exist because of substantial aid coming from the EU, aiming to assure in this way a gradual harmonization of working and living conditions of its inhabitants by developing rural areas in which they work and live.
