tThe EU Water Framework Directive (WFD), EU Nitrate Directive and EU Rural Development Policy (RDP)aim to improve water quality. The nutrient content of water can be decreased by reducing nitrogenemission. In this article a novel approach is applied to the evaluation of the impact of Agri Environmen-tal Measures (AEM), which are part of axis 2 of the EU Rural Development Programme. The spendingon AEM is linked to the reduction of nitrogen surplus, and hence, to the improvement of water quality.Reduction of nitrogen surplus is considered as a beta convergence process, in which the nitrogen sur-plus of EU member states converges to a steady state level. The convergence is tested, applying spatialeconometrics on a panel data set of EU member states. The development over time of nitrogen surplusis explained applying the conditional beta convergence methodology. To allow for varying steady statenitrogen surpluses, structural variables are added to the analysis. RDP spending on AEM was added asstructural variable to evaluate whether they affect the reduction of nitrogen surplus. The fixed effectspanel data specification was tested to be the best model and preferred over spatial econometric specifi-cations. A significantly negative effect is found between AEM expenditures and nitrogen surplus. Basedon these estimation results it can be concluded that spending on AEM affects the convergence of nitrogensurplus towards a steady state level. A causal relationship cannot be tested with data on EU Member Statelevel and additional analysis at smaller spatial level is warranted