This report
from the Commission is on ex ante verification of additionality in the
regions eligible under the Convergence objective for the period 2007‑2013.
Additionality
is one of the main principles underpinning the economic role and driving the
functioning of cohesion policy. It requires that contributions from the
Structural Funds do not replace public expenditure by Member States, in order
to ensure that they have a genuine economic impact. This report summarises
the main findings of the verification of this principle at the ex ante stage
for the period 2007‑2013 along with an analysis from an economic
perspective.
Member States
reached an agreement on the target level of expenditure to be kept throughout
the period. As a result, more than EUR 650 billion (in 2006 prices) will
be invested from different domestic financial sources over the period 2007‑2013.
This amount is additional to the EUR 174 billion (in 2006 prices) of
Structural Funds which are planned to be paid in the Convergence objective
regions over the same period.
The notion
of additionality is relatively simple but its actual implementation involves
a number of methodological complexities. The
verification of additionality at this ‘ex ante’ stage for the period 2007‑2013
was based on Article 15 of Regulation (EC) No 1083/2006 and on the
Guidelines set out in Working Document No 3 (December 2006). The latter
was intended to set common principles for negotiations between the Commission
and the different Member States. Some of the purposes of the document are to
improve transparency, ensure equality of treatment between countries, and
make the results obtained for each Member State comparable.
Despite these
efforts, several shortcomings remain, including:
- Difficulties
to compare results across Member States:
Member States do not follow a single, standard methodology for national
public accounting. As a result, the methodological approaches to collect
data required to verify additionality differ across countries. In most
cases, data are taken from budgetary sources which are classified in
different ways from one Member State to another. This makes the
cross-country comparison difficult. This problem is even more compelling
when comparing structural expenditure funded by national and Community
sources since they are not classified in a coherent and streamlined way;
- Shortcomings
in data comparability over programming periods: the methods used may also vary over time even within a
single Member State. For instance, some significant discrepancies were
found in some Member States between the actual expenditure claimed for
the ex post verification of the period 2004‑2006 and the actual
expenditure for the same period used for the ex ante verification of the
period 2007‑2013;
- Problems
to capture all relevant eligible expenditure:
determining relevant expenditure based on the different accounting
sources that exist in Member States is difficult. In most cases, data
are taken from budgetary sources which are not always broken down to all
the sub-national levels. This makes it very difficult to identify the
relevant expenditure, particularly at local level and, therefore, most
often it is necessary to use of estimations and case-by-case analyses,
which affect the reliability of the final result;
- Heterogeneity
of the information provided: the information
submitted by some Member States in their National Strategic Reference
Framework (NSRF), and in the annexed reports and methodological notes
could be further streamlined. The data submitted lack homogeneity and
vary in quantitative and qualitative terms from one Member State to
another. Moreover, this information was not always presented in the same
way (for instance, Member States did not use the same reference year for
the deflators);
- Difficulties
in verifying the reliability of data: the
Commission has limited instruments to verify that the information
provided is correct. A breakdown of expenditure by region could be
developed, in particular for Member States whose territory is partially
eligible under the Convergence objective. This could also help to reduce
the use of estimates to determine spending at sub-national level. In
addition, complementary documents linked to regional or national budgets
could provide additional proof of the reliability of this expenditure;
- No
monitoring mechanism: finally, the
additionality rules do not provide for instruments that allow the
Commission to monitor on a regular basis the evolution of variables in
Member States (e.g. fiscal performance or privatisation processes),
which may affect the level of their public spending and thus the
additionality results. Possible solutions should be explored, including
linking the information necessary to verify additionality to the regular
information provided by Member States in their stability programmes.
In sum, there
is clearly room to improve the information and the methodology for
determining and verifying additionality, which is an important principle
of cohesion policy. The Commission intends to engage in a more in-depth and
permanent dialogue with Member States on how to overcome the shortcomings and
improve the application of the principle.
The next
verification of additionality will take place in 2011. At that time, the
principle will be considered as having been complied with if the actual
annual average of structural expenditure in the period 2007‑2010 is at
least the same as the level forecast for the period or if this spending fits
a predetermined spending profile agreed upon during the ex ante assessment.
In the latter case, the 2007‑2010 annual average may be below the
annual average for 2007‑2013.
At the
mid-term review, Member States will have an opportunity to revise the level
of expenditure in the light of significant changes in the economic situation.
This may be particularly relevant in the current financial crisis. It is
therefore important that future discussion takes place on a more robust
basis.