In its Report on ex ante verification of additionality in the regions eligible under the Convergence objective for the period 2007–2013, published on March 6th 2009, COM(2009) 112 final, the European Commission 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. In this Report, the Commission considers that 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.

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. Regulation (EC) No 1083/2006 governing cohesion policy requires that, for the regions covered by the Convergence objective, the Commission and the Member State determine the level of public or equivalent structural expenditure which the Member State must maintain in these regions during the programming period.

Compliance with additionality is verified at national level. The national funds are considered to be additional if the annual average of structural expenditure maintained in the period 2007-2013 is at least equal to the annual average of structural expenditure incurred in the period 2000-2005 (for Member States that joined the EU in 2004 the reference period is 2004-2005).

The analysis carried out by the Commission considered the sources of expenditure, methods and assumptions used by Member States, including applied deflators and, for Members States outside the euro-zone, also the exchange rates. Additionality was verified in close cooperation with Member States through written consultations and bilateral meetings on technical and methodological issues.

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. For example, the inclusion of expenditure by state-owned companies was made compulsory, in contrast to the voluntary approach taken for the previous programming period 2000-2006.

The new Cohesion Fund programming period 2007-2013 features two major innovations:

1. Additionality is only verified with reference to the Convergence objective;
2. If a Member State fails to prove by 30 June 2016 that it has complied with the principle of additionality, the Commission may make a financial correction.

The analysis was done in parallel with the drafting of the National Strategic Reference Framework (NSRF) for the period 2007-2013. Member States submitted their respective NSRFs, including the standard table for verifying additionality and complementary information on the methodology used. Further information was given to Commission staff during the negotiations.

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 period 2007-2013.

The report concludes that also the notion of additionality is relatively simple but its actual implementation involves a number of methodological complexities.

Therefore, 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.
• Shortcomings in data comparability over programming periods. The methods used may also vary over time even within a single Member State.
• 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 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.
• Difficulties in verifying the reliability of data. The Commission has limited instruments to verify that the information provided is correct.
• 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.

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.