CORRIGENDUM Communication from the Commission Report on ex ante verification of additionality in the regions eligible under the Convergence objective for the period 2007–2013 {SEC(2009) 273 final/2}
Date: 2009-03-06
Institutions: European Commission
Subjects: EU expenditure, administrative check, economic policy, management audit, the EU's international role

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EUROPEAN COMMISSION 

Brussels, 1.3.2010  
COM(2009)112 final/3 

Corrigendum 
Annule et remplace le document COM(2009)112 final du 6 mars 2009. 
Concerne toutes les langues, à la page 9 - tableau 3, page 13 - 4 paragraphe, première 
phrase 

COMMUNICATION FROM THE COMMISSION 

Report on ex ante verification of additionality in the regions eligible under the 
Convergence objective for the period 2007–2013 

{SEC(2009) 273 final/2}

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

3. 

4. 

5. 

Introduction...................................................................................................................3 

The assessment process ................................................................................................4 

Verification method ......................................................................................................4 

Eligible sources of finance............................................................................................4 

Results of the verification .............................................................................................5 

Additionality from a wider economic perspective........................................................7 

Conclusions.................................................................................................................11 

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COMMUNICATION FROM THE COMMISSION 

Report on ex ante verification of additionality in the regions eligible under the 
Convergence objective for the period 2007-2013 

1. 

INTRODUCTION 

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. 

Sections 2 and 3 present the results after negotiations with Member States. An agreement 
on the target level of expenditure to be kept throughout the period was reached with each 
Member State concerned. 

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. 

Section  4  analyses  additionality  from  a  wider  perspective  focussing  on  the  synergies 
between national investment policies and European cohesion policy and in relation to the 
macroeconomic conjuncture. While they are not part of the additionality verification, the 
amounts of the Cohesion Fund are taken into account in this section so that the role of the 
European cohesion policy in total public investment is fully captured and understood. 

This Section shows that Member States will invest, on average, EUR 3 for every EUR 1 
invested  by  the  European  cohesion  policy.  The  total  public  investment  planned  in  the 
eligible  areas  will  account  for  some  5,6%  of  the  aggregate  projected  GDP  of  these 
regions.  In  some  cases,  notably  in  some  of  the  new  Member  States,  this  proportion  is 
considerably higher. 

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

•  additionality is only verified with reference to the Convergence objective; 

•  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.1 

1 

See  Article  99(5)  of  Council  Regulation  (EC)  No  1083/2006  of  11  July  2006,  (OJ  L  210, 
31.7.2006). 

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2. 

THE ASSESSMENT PROCESS 

2.1.  Verification method 

Article 15 of 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 (hereinafter ‘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  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  rates2.  Additionality  was  verified  in 
close  cooperation  with  Member  States  through  written  consultations  and 
bilateral meetings on technical and methodological issues.  

This 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. 

2.2.  Eligible sources of finance 

into 

Eligible  structural  expenditure  falls 
three  main  categories  (basic 
infrastructure,  human  resources  and  productive  environment)  plus  a  residual 
category  ‘others’.  Verification  covers  total  national  structural  expenditure3  in 
eligible  fields  in  both  budget  and  off-budget  expenditure.  Depending  on  the 
structure of public finances of each Member State, the data may therefore cover 
not  only  the  state,  regions  and  municipalities,  but  public  enterprises,  public 
bodies  and  off-budget  funds  at  national,  regional  and  local  level.  Spending  by 
public service bodies that have their own independent budget is also included.  

The additionality tables submitted under the relevant NSRF contain information 
on  the  breakdown  of  structural  expenditure  by  category  and  the  source  of 
financing  (EU,  national  co-financing,  public  companies  and  national  funds 
outside the NSRF). This information is provided for both the periods 2000-2005 
or  2004-2005  (actual  annual  expenditure)  and  the  period  2007-2013  (actual 
annual expenditure forecasts) in order to be able to verify compliance.  

2 

3 

For further information on deflators and exchange rates see the Methodological Annex and Table 
1 and 2 in the accompanying Commission Staff Working Document. 
It is important to stress that the concept of structural expenditure used to check the additionality 
principle is broader than that which, traditionally, is assimilated to gross fixed capital formation. 

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Seven  out  of  the  27  Member  States  do  not  have  any  region  covered  by  the 
Convergence  objective  in  the  period  2007-2013:  Cyprus,  Denmark,  Finland, 
Ireland, Luxemburg, the Netherlands and Sweden. These countries are therefore 
not covered by this report. 

3. 

RESULTS OF THE VERIFICATION 

Table  1  shows  the  level  of  average  annual  structural  expenditure  to  be  maintained  by 
each Member State throughout the period 2007-2013. These amounts were agreed by the 
Commission and the Member State concerned in negotiations on the NSRF.  

Table 1: Amounts resulting from the verification of the principle of 
additionality by MS (in million EUR, 2006 prices)

2000-2005

2007-2013

Difference

Austria
Belgium
Bulgaria
Czech Republic
Estonia
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Malta
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
United Kingdom

Total

139
1.120
782
2.549
1.213
1.749
22.601
8.339
3.330
17.871
595
755
103
6.502
3.898
3.475
875
844
12.251
3.126

92.118

139
1.128
919
2.549
1.316
1.815
16.504
8.661
3.330
20.613
971
755
107
7.940
3.946
4.773
876
957
13.973
3.465

94.735

0,0%
0,6%
17,6%
0,0%
8,4%
3,8%
-27,0%
3,9%
0,0%
15,3%
63,2%
0,0%
3,4%
22,1%
1,2%
37,3%
0,1%
13,3%
14,1%
10,8%

2,8%

Source: DG REGIO calculations

The  general  rule  is  that  average  annual  structural  expenditure  in  real  terms  must  be  at 
least  equal  to  the  level  attained  in  the  previous  programming  period.  However,  the 
Regulation  states  that  account  must  be  taken  of  certain  specific  circumstances  such  as 
general  macroeconomic  conditions,  ongoing  or  planned  privatisations  or  an  exceptional 
level of public or equivalent structural spending in the previous programming period.4 

So, for example, the Commission agreed to decrease the level of structural expenditure in 
Germany  taking  into  account  its  exceptional  past  spending  on  the  reunification  of  the 
country. In three other Member States some past structural expenditure was regarded as 
exceptional  due  to  certain  extraordinary  items  of  expenditure  (the  Olympic  Games  in 
Greece,  a  major  hospital  in  Malta,  and  some  transport  infrastructure  expenditure  in 
Hungary that was funded with revenues from the privatisation of public enterprises). This 
expenditure was not taken into account in setting the level of structural expenditure to be 
maintained  across  the  period  2007-2013.  These  special  circumstances  resulted  in  an 

4 

Article 15(3) of Regulation (EC) No 1083/2006 

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overall  reduction  of  structural  expenditure  to  be  maintained  throughout  the  period  of 
around EUR 7 billion per year. 

The level of structural expenditure remains the same in real terms in comparison with the 
previous  period  in  four  Member  States  (Austria,  Hungary,  the  Czech  Republic  and 
Lithuania)  and  increases  between  0.1%  (the  Slovak  Republic)  and  63%  (Latvia)  in  the 
remaining Member States. 

The data used to construct the additionality tables for each Member State derive from the 
national  (or  federal),  regional  and  local  budgets.5  The  spending  of  independent 
institutions  funded  by  public  funds  was  also  included  for  the  eligible  categories.  The 
same applies to most of the public enterprises, even though they were excluded in some 
cases  due  to  ongoing  or  planned  privatisation  processes  (e.g.  Poland  and  the  Slovak 
Republic).  In  other  cases,  it  was  not  always  possible  to  calculate  directly  the  actual 
eligible  structural  expenditure  incurred  at  regional  level  (e.g.  Portugal)  or  by  public 
enterprises  (e.g.  Latvia).  In  these  cases,  Member  States  used  different  estimation 
methods.  

In  those  Member  States  where  not  all  the  national  territory  is  eligible  under  the 
Convergence objective, geographical corrections were made in order to exclude structural 
expenditure  in  non-eligible  regions.  In  some  cases  this  was  done  using  assumptions  or 
estimation  methods  (e.g.  the  Czech  Republic  and  the  Slovak  Republic).  A  similar 
exercise  was  undertaken  in  some  Member  States  because  of  changes  in  the  map  of 
eligible regions between the two programming periods (e.g. Greece, Portugal, and Spain), 
since structural expenditure in regions no longer eligible under the Convergence objective 
had to be excluded from the calculations.  

Graph 1: Breakdown of total spending in Convergence regions by policy area

National investment

Structural Funds

60%

50%

40%

30%

20%

10%

0%

Basic infrastructure

Human resources

Productive environment

Others

Source: DG REGIO calculations 

5 

More  detailed  information  concerning  the  ex  ante  verification  of  additionality  for  each  Member 
State is given in the Commission Staff Working Document accompanying this Communication. 

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Graph 1 presents the results of the verification of additionality by expenditure category. 
Almost  50%  of  the  national  structural  expenditure  are  devoted  to  basic  infrastructure, 
such  as  transport,  telecommunications,  energy,  environment,  water  management,  and 
health. 

National structural expenditure planned under the category "Human Resources" account 
for  around  29%  of  the  total.  This  category  includes  chiefly  investments  in  education, 
training, and research and development. The remaining amount is devoted to the category 
"productive environment" (slightly under 13% - it includes the promotion of activities in 
productive sectors, for example through subsidies to firms, and development of business 
services)  and  the  category  "Others"  (close  to  9%  -  it  consists  mainly  of  technical 
assistance and other small expenditures). 

Yet,  national  structural  expenditure  in  the  area  of  "Human  Resources"  in  Convergence 
objective regions is higher than in the category "Basic Infrastructure" in seven Member 
States: Belgium, Germany, Estonia, France, Latvia, the Slovak Republic, and the United 
Kingdom. 

this  case,  structural  expenditure 

Results  are  different  when  looking  at  the  relative  weight  of  each  category  under  the 
Structural  Funds.  In 
the  category  "Basic 
Infrastructure"  accounts  for  less  than  37%  of  the  total,  or  12  points  less  compared  to 
national expenditure. This difference is allocated in particular to the category "Productive 
Environment"  which  represents  22%,  compared  to  barely  13%  of  the  total  national 
investment.  Likewise,  the  area  "Human  Resources"  accounts  for  a  slightly  higher 
proportion under the Structural Funds. 

in 

In  sum,  investment  funded  by  the  Structural  Funds,  which  is  additional  to  the  national 
investment  according  to  the  requirements  of  the  principle  of  additionality,  helps  to 
balance the composition of public investment to the benefit of expenditure in support of 
the  productive  environment  (innovation,  support  to  entrepreneurship,  tourism  services, 
etc.). 

These  conclusions  need  to  be  taken  with  a  degree  of  caution  as  national  nomenclatures 
underlying  the  additionality  tables  are  not  fully  aligned.  Moreover,  these  tables  do  not 
take account of payments of the Cohesion Fund.  

4. 

ADDITIONALITY FROM A WIDER ECONOMIC PERSPECTIVE  

To  understand  the  principle  of  additionality  from  a  wider  economic  perspective  it  is 
necessary to look at the overall relation between the national and Community investment. 
Therefore,  while  payments  of  the  Cohesion  Fund6  are  not  part  of  the  additionality 
exercise, they have been taken into account in this Section to fully reflect the weight of 
the European cohesion policy in the total public investment. 

6 

For the Cohesion Fund, the proxy 'population' was chosen to estimate the payments corresponding 
to  the  Convergence  regions  in  the  Member  States  that  are  eligible  to  this  Fund  (see  also 
Methodological Annex). 

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Average  national  structural  expenditure  to  be  maintained  in  the  eligible  areas  over  the 
period  2007-2013  following  the  additionality  principle  is  over  EUR  94  billion  (in  2006 
prices)  per  year  (see  Table  1).  This  amount  includes  the  national  co-financing  of  the 
Structural Funds and of the Cohesion Fund7. 

By adding the payments planned under the European cohesion policy (Structural Funds 
and Cohesion Fund), the total structural expenditure will attain over EUR 125 billion per 
year (in 2006 prices) in these regions. 

Table 2: Average annual national public investment per EUR of Community funding (2006 prices) 
and eligible population

EUR of national 
expenditure per EUR of 
Community co-financing 
(with Cohesion Fund)

EUR of national 
expenditure per EUR of 
Community co-financing 
(without Cohesion Fund)

Population of 
Convergence regions

'000

% of 
national 
population

Austria
Belgium
Bulgaria
Czech Republic
Estonia
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Malta
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
United Kingdom

Average

Source: DG REGIO calculations

5,9
16,9
1,3
1,0
3,4
5,7
7,8
3,6
1,7
7,6
1,6
1,1
1,2
1,1
1,6
2,8
0,7
2,3
4,4
9,2

3,0

5,9
16,9
2,0
1,4
4,9
5,7
7,8
4,3
2,4
7,6
2,1
1,7
1,9
1,6
1,7
4,7
0,9
3,5
4,6
9,2

3,8

277
1.284
7.781
9.040
1.356
1.798
15.176
10.202
7.272
17.445
2.313
3.436
401
38.130
7.507
21.673
4.782
1.997
15.709
2.762

3,4%
12,3%
100,0%
88,6%
100,0%
2,9%
18,4%
92,2%
72,0%
30,0%
100,0%
100,0%
100,0%
100,0%
71,5%
100,0%
88,9%
100,0%
36,8%
4,6%

170.341

34,8%

Table  2  shows  significant  differences  between  Member  States  (see  also  graph  2).  For 
example,  national  structural  expenditure  in  the  only  Belgian  region  eligible  under  the 
Convergence objective (Hainaut) reaches almost EUR 17 per every EUR invested under 
the European cohesion policy. These amounts are also high in other Member States of the 
old  EU-15.  On  the  contrary,  the  proportion  is  close  to  EUR  1  or  even  less  in  other 
Member  States.  Once  again,  these  conclusions  must  be  interpreted  with  caution  as  in 
some cases the proportion of population who lives in the Convergence objective regions 
is small (e.g. in France just 2,9% of the total population lives in these regions, 3,4% in 
Austria and 4,6% in the United Kingdom).  

7 

See  Working  Document  n°3  of  Commission  services  on  the  principle  of  additionality. 
(http://ec.europa.eu/regional_policy/sources/docoffic/2007/working/wd3_additionality_en.pdf). 

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Graph 2 - EUR of national public investment for each EUR of Community financing* 
(2006 prices)

18,0

16,0

14,0

12,0

10,0

8,0

6,0

4,0

2,0

0,0

BE

UK

DE

IT

AT

FR

ES

EL

EE

RO

SI

HU

LV

PT

BG

MT

PL

LT

CZ

SK

Source: DG REGIO calculations
* Structural Funds and the Cohesion 

The  differences  observed  are  less  significant  when  comparing  national  structural 
expenditure against the average expected GDP over the period 2007-2013 (Table 3). It is 
worth underlining that these figures are calculated using 2006 constant prices, which do 
not  reflect  the  effects  of  possible  fluctuations  in  the  exchange  rates  of  non-Eurozone 
national currencies (see Methodological Annex).  

Table 3: Average annual public investment 2007-2013
(% of GDP of Convergence regions)

National 
investment

Community 
investment*

Total 
investment

2,11%
4,07%
2,97%
2,44%
7,12%
5,49%
5,15%
4,17%
6,28%
6,87%
4,42%
2,46%
2,05%
2,47%
4,05%
3,91%
2,13%
2,73%
3,21%
6,21%

0,36%
0,24%
2,21%
2,47%
2,10%
0,96%
0,66%
1,16%
3,79%
0,90%
2,85%
2,26%
1,67%
2,22%
2,59%
1,38%
3,19%
1,20%
0,74%
0,68%

2,47%
4,31%
5,18%
4,91%
9,22%
6,45%
5,81%
5,32%
10,07%
7,77%
7,27%
4,72%
3,73%
4,68%
6,64%
5,29%
5,33%
3,93%
3,95%
6,89%

Austria
Belgium
Bulgaria
Czech Republic
Estonia
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Malta
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
United Kingdom

Average

4,18%

1,38%

5,56%

Source: DG REGIO calculations

* Structural Funds and the Cohesion Fund

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Indeed,  differences  between  the  old  EU-15  and  new  Member  States  are  not  so 
pronounced  (graph  3).  Hungary  and  Estonia  stand  out  with  a  total  planned  expected 
investment  of  more  than  10%  and  9%  of  their  respective  GDP.  On  average,  total 
investment  represents  a  bit  less  than  5,6%  of  the  aggregated  GDP  of  Convergence 
regions.  

Graph 3 - Investment of cohesion policy in Convergence regions (% of GDP)

Community investment*

National investment

12,0%

10,0%

8,0%

6,0%

4,0%

2,0%

0,0%

HU

EE

IT

LV

UK

PT

FR

DE

SK

EL

RO

BG

CZ

LT

PL

BE

ES

SI

MT

AT

Source: DG REGIO calculations
* Structural Funds and the Cohesion Fund

In some countries of the old EU-15 (Italy, United Kingdom, France and Portugal), total 
planned structural expenditure (including  payments of the European cohesion policy) is 
over  6%  of  the  average  annual  GDP.  Nevertheless,  it  must  be  recalled  that  only  some 
regions of these countries are eligible under the Convergence objective. As noted above, 
in some cases these regions account for a modest proportion of the total population and 
national GDP.  

In  any  event,  the  relative  weight  of  the  European  cohesion  policy  in  the  total  planned 
investment  appears  to  be  considerably  higher  in  the  new  Member  States  (graph  3). 
Community payments are close to 50% of the total investment in most of these countries 
and  they  are  even  higher  than  the  national  payments  in  the  Czech  Republic  and  the 
Slovak Republic.  

The  above  tables  and  graphs  are  based  on  the  Commission  projections  which  were 
available at the time when the expenditure targets were set (Autumn 2006).  

Lastly, it is worth noting that GDP projections for the forthcoming years have just been 
revised  downward  as  a  result  of  the  expected  impact  of  the  financial  crisis  on  the  real 
economy. Thus, the last Commission projections (autumn 2008) predict weak economic 
growth  in  the  Union,  and  even  a  context  of  recession  in  some  Member  States.  These 
projections have further worsened on the basis of the interim updated forecasts unveiled 
at the beginning of 2009.  

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5. 

CONCLUSIONS 

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 the 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.  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. 

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. As an example, additionality figures are 
provided on a cash basis, while publicly available Member State budgetary figures are 
presented on an accrual basis (ESA95).  

•  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  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.  While  some 
Member  States  provided  very  detailed  information,  for  example  on  the  methodology 
used,  the  sources  of  information  or  the  estimations  made,  others  provided  very  few 
details  of  how  their  additionality  tables  were  produced.  Moreover,  this  information 

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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.  

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METHODOLOGICAL ANNEX 

Table  1  shows  actual  payments  and  planned  payments  under  the  eligible  categories  for 
the periods 2000-2005 and 2007-2013 respectively. The figures are those included in the 
additionality  tables  of  the  relevant  National  Strategic  Reference  Frameworks.  These 
figures are expressed in EUR at 2006 prices. A GDP deflator was used to express them in 
constant prices. Any structural fund spending and national co-financing carried out in the 
new  programming  period  but  committed  under  previous  programmes  is  included  in  the 
2007-2013 figures. National co-financing for the Cohesion Fund is taken into account to 
determine the target of national structural expenditure. 

For  Member  States  which  are  not  entirely  covered  by  the  Convergence  objective,  the 
national  tables  do  not  include  structural  expenditure  for  non-eligible  regions.  Where 
regional data were not available, statistical estimation methods were used. 

Table 2 and graph 2 compare, for each Member State, national planned payments in EUR 
which  stem  from  additionality  for  the  period  2007-2013  (2006  prices)  with  planned 
payments  of  the  Structural  Funds  and  the  Cohesion  Fund  (first  column)  and  of  the 
Structural Funds (second column) for each Member State (Convergence objective). A 2% 
standard  deflator  was  used  for  all  Member  States  to  transform  2004  prices  into  2006 
prices.  

Table  3  and  graph  3  compare,  for  each  Member  State,  the  relative  weight  of  planned 
national  payments  which  stem  from  additionality  in  the  period  2007-2013,  and  of  the 
total  planned  payments  of  the  Structural  Funds  and  the  Cohesion  Fund  against  the 
Autumn  2006  GDP  projections  for  Convergence  regions  for  each  Member  State.  These 
were the projections available at the time of setting the targets of expenditure.  

Data  on  national  payments  and  structural  funds  payments  were  obtained  from  the 
additionality tables of the NSRFs of Member States. As for the Cohesion Fund, a profile 
of  expected  payments  was  developed  on  the  basis  of  an  average  profile  of  payments 
observed  in  Spain,  Portugal  and  Greece  over  the  past  programming  period  2000-2006. 
The proxy "Population" was chosen as a proxy to estimate the payments corresponding to 
the Convergence regions in the Member States that are eligible to this Fund. 

Finally, it is important to consider that using  constant  prices  may  overestimate  in  some 
non-eurozone  countries  the  weight  of  national  and  Community  planned  payments 
expressed  as  a  percentage  of  GDP.  The  reason  is  the  appreciation  of  some  national 
currencies  against  the  EUR  since  2004.  Working  with  constant  prices  assumes  that  the 
exchange rate remains stable throughout the reference period. Moreover, another caution 
to  be  taken  when  interpreting  the  results  concerns  the  underlying  hypotheses  in  GDP 
projections regarding the inflation rate (standard 2% per year for all the Member States 
throughout  the  programming  period)  as  they  may  differ  from  reality  depending  on  the 
economic conjuncture.  

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