Ifo study finds EU structural funds boost growth in weaker regions, East Germany receives large share

A Dresden-based Ifo Institute study shows that EU structural funds have supported growth in structurally weaker regions. The researchers estimate that one euro of EU funding translates into about two euros of long-run GDP, highlighting a strong economic multiplier effect. A quote from the study states: “Our calculations show that one euro of EU funding, in the long run, leads to two euros of added GDP,” said Joachim Ragnitz, deputy head of the Ifo office.

Analyzing the distribution of funds from 2014 to 2020, the study notes that almost two-thirds of EU structural funding flowed to East Germany, indicating a concentrated impact within Germany and signaling where the funding was most heavily directed.

The findings underscore the role of EU cohesion policy in regional development and may inform future decisions on how such funds are allocated across regions and member states.