The wages of reconstruction – the EU’s new budget and the public service staff shortage crisis on the EU’s eastern periphery

One of the main purposes of EU budgets has long been to strengthen EU cohesion by reducing territorial inequalities. At the time of their accession in 2004 and 2007, the relative underdevelop- ment of Central and Eastern European (CEE) Member States qualified them for a larger share of the cohesion and regional funds. Over time, the importance of EU funds in these economies has further increased, in parallel with the shrinking of their fiscal space, in itself partly due to enhanced budgetary surveillance by the EU’s New Economic Governance regime (Bohle and Greskovits, 2019; Erne, 2018). The RRF has brought a slight readjustment to the distribution of funds across EU peripheries, with southern Member States gaining greater funding as they now have higher unemployment than eastern Member States and were more severely hit by the economic fallout of the pandemic. Even so, Central and Eastern Europe will receive large amounts of EU RRF funds.