COMMUNICATION FROM THE COMMISSION Ex-post verification of additionality 2007-2013
Date: 2017-03-23
Institutions: Directorate-General for Regional and Urban Policy, European Commission
Subjects: EU Member State, European Regional Development Fund, European Social Fund, commitment of expenditure, economic and social cohesion, economic convergence, economic development, economic recession, principle of additionality, public expenditure

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 23.3.2017  COM(2017) 138 final   COMMUNICATION FROM THE COMMISSION Ex-post verification of additionality 2007-2013  
 
 
1.  INTRODUCTION 

Additionality  is  a  principle  of  the  European  Union's  cohesion  policy  aiming  to  ensure 
that the Structural Funds1 complement but do not replace equivalent public expenditure 
of a Member State. 

Article  15  of  Council  Regulation  (EC)  No 1083/2006  specifies  that  the  Commission 
should  verify  additionality  in  the  Convergence  objective  in  cooperation  with  each 
concerned  Member  State  by  the  end  of  2016  and  should  publish  the  results  of  this 
exercise.  Although,  under  the  regulations,  Croatia  has  an  additional  year  for  this 
verification  process,  the  Croatian  authorities  decided  to  submit  all  documentation  one 
year early. 

This  report  therefore  closes  the  verification  of  additionality  for  the  2007-2013 
programming period, after the ex-ante and the mid-term verifications carried out in 2007 
and 2011-2012 respectively. 

Additionality is considered to be respected if the average structural expenditure2 by the 
Member State over the period 2007-2013 was, in real terms3, at least equal to the level 
determined  at  the  beginning  of  the  period,  or  the  level  revised  at  the  mid-term 
verification in 2011 and 2012 ('the baseline') to take account of the significant changes in 
the economic situation4. 

This report summarises the results of the ex-post verification carried out in 2016 for the 
whole programming period 2007-20135. Compliance with additionality in this period has 
been  probably  the  most  challenging  until  now;  it  refers  to  the  years  of  the  worst 
economic downturn that the EU has witnessed in several decades. The significant decline 
of the economic activity which started in 2008 had a profound impact on public finances 
in Member States and gave rise to stringent fiscal consolidation plans aimed principally 
at ensuring the sustainability of public finances. The result was a significant decline of 
public investment6. 

The ex-post verification has led to three main findings: 

1  Additionality  only  concerns  the  European  Regional  Development  Fund  (ERDF)  and  the  European 

Social Fund (ESF). The Cohesion Fund is not considered. 

2   As  referred  in  the  Working  Document  N°  3  of  the  Commission  of  December  2006,  'the  eligible 
national  public  expenditure  covers  all  public  or  equivalent  structural  spending  originating  from  the 
budget of the State, regional or local authorities which could benefit from Structural Fund aid even if 
only part of this expenditure is in fact co-financed by the Structural Funds'.  

3  Expressed in 2006 prices. 
4  Article 15 specifies that ‘the Commission, in consultation with the Member State, may decide to modify 
the  required  level  of  structural  expenditure  if  the  economic  situation  in  the  Member  State  concerned 
has significantly changed from the one existing at the moment of the determination of the level of public 
or equivalent structural expenditure [decided at the ex-ante verification]’ 

5  Article  15  also  specifies  that  ‘the  Commission  shall  publish  the  results  by  Member  State  of  the 
verification of additionality, including the methodology and sources of information, after the conclusion 
of each of the three stages of verification’. 

6   Public investment is the gross fixed capital formation of the general government (P.51g in the European 

System of Accounts 2010). 

2  

 
 
 
                                                            
First,  the  aggregate  level  of  structural  spending  by  Member  States  in  the  convergence 
regions in 2007-2013 (EUR 94.4 billion on annual average 2007-2013) was some EUR 
1.2 billion lower than the level set ex-ante (EUR 95.6 billion) and EUR 13 billion higher 
than  the  aggregate  level  set  at  the  mid-term  (EUR  81.4  billion),  notwithstanding  some 
significant differences across Member States. Overall, the highest gaps are concentrated 
in  the  Member  States  most  hit  by  the  economic  downturn  and  the  crisis  of  public 
finances.  

Second, all Member States except Greece complied with their additionality baselines for 
2007-2013,  either  those  originally  set  at  the  ex-ante  verification  in  the  respective 
National  Strategic  Reference  Frameworks  (NSRF)  or  those  revised  at  the  mid-term 
verification. Six Member States are below the baseline set at the ex-ante verification but 
above  the  final  baseline  (Czech  Republic,  Germany,  Italy,  Lithuania,  Hungary  and 
Portugal), as a result of the downward revision decided at the mid-term verification.  

Third,  the  ex-post  verification  confirmed  the  shortcomings  of  the  method  for  verifying 
additionality,  already  identified  at  the  mid-term  verification.  The  volume  of  the 
information  to  be  submitted  is  a  significant  burden  for  Member  States  and  presents 
verification  difficulties  for  the  Commission  because  of  problems  of  comparability 
between  the  various  methods  used  by  Member  States  to  verify  additionality  and  the 
official statistics available in the EU. These are some of the reasons why the verification 
of  additionality  for  the  2014-2020  period  has  been  substantially  simplified  and  aligned 
with  the  economic  governance  of  the  EU.  Additionality,  albeit  revised,  remains  a  key 
element  of  the  architecture  of  cohesion  policy  for  the  2014-2020  period  to  encourage 
growth-enhancing investments. 

2.  THE ECONOMIC CONTEXT IN THE 2007-2013 PROGRAMMING PERIOD 

The  implementation  of  cohesion  policy  in  2007-2013  took  place  in  the  most  difficult 
economic context since EU cohesion policy was introduced. Real GDP in 2013 in the EU 
was  still  lower  than  in  2007  due  to  the  major  impact  of  the  economic  downturn  which 
started in 2008 and intensified later. Annual GDP7 growth was negative in 2009 (-4.4%) 
and 2012 (-0.5%) and close to stagnation in 2008 (0.4%) and 2013 (0.2%). The average 
annual  GDP  growth  expected  for  the  EU-27  in  the  period  2007-20098  at  the  time  of 
deciding the baselines was 2.6%, which compares to an observed rate of -0.3%.  

The  economic  downturn  led  to  a  sharp  deterioration  of  the  labour  market.  The 
harmonized  unemployment  rate  in  the  EU28  witnessed  a  steady  increase  from  7%  in 
2008 to 10.9% in 2013. The impact on the labour market was particularly serious in the 
Member  States  most  hit  by  a  contraction  of  economic  activity.  For  instance,  the 
unemployment rate increased from 7.8% in 2008 to 27.5% in 2013 in Greece and from 
8.2%  in  2007  to  26.1%  in  2013  in  Spain.  There  was  also  a  significant  deterioration  of 
social  conditions  in  the  EU  as  a  whole  and  in  some  Member  States  in  particular.  The 
share of people at-risk-of-poverty and social exclusion increased from 23.7% in 2008 to 
24.5% in 2013 with some Member States exceeding significantly the EU average at the 
end  of  the  programming  period  (e.g.  48%  in  Bulgaria,  41.9%  in  Romania  or  35.7%  in 
Greece. 

The  contraction  of  economic  activity  and  the  deterioration  of  the  labour  market  and 
social conditions gave rise to increasing pressure on public expenditure. It rose sharply in 

7  Source: Eurostat, extraction date 31st January 2017. 
8  Autumn Economic Forecasts of the European Commission, 2007. 

3  

 
                                                            
2008 and 2009 up to an EU average general government total expenditure-to-GDP ratio 
of  over  50%  of  GDP  in  the  EU,  the  highest  since  1995.  This  was  mostly  the  effect  of 
automatic  stabilisers,  which  explain  also  why  government  revenues  did  not  increase  at 
all;  actually,  the  main  source  of  government  revenue  (taxes  and  social  contributions) 
decreased in absolute terms.9 Automatic stabilisers are usually defined as those elements 
of  fiscal  policy  which  reduce  tax  burdens  and  increase  public  spending  without 
discretionary  government  action.  They  provide,  for  instance,  income  replacement 
immediately  when  unemployment  starts  to  rise.  The  increase  in  the  government 
spending-to-GDP  ratio  is  actually  mostly  reflected  in  social  protection  expenditure, 
which was from 2009 onwards around 2.5 percentage points of GDP higher on average 
than  pre-crisis  levels.  The  increase  in  social  protection  expenditure  was  even  higher  in 
some  Member  States  most  hit  by  the  contraction  of  GDP.  The  increasing  burden  of 
Government debt interest was also significant in these countries, over 2 percentage points 
of GDP compared to pre-crisis levels in some of them.  

The  result  of  the  mounting  pressure  on  government  expenditure  and  the  stagnation  of 
government  revenue  was  a  sharp  increase  in  the  deficit-to-GDP  ratio  in  most  Member 
States.  It  peaked  at  an EU  average  of  -6.6%  in  2009  from  -0.9%  in  2007  and  was  still 
above  -3%  (-3.3%  of  GDP)  in  2013.  More  than  20  Member  States  were  under  the 
Excessive  Deficit  Procedure,  the  corrective  arm  of  the  Stability  and  Growth  Pact,  in 
2010. General government gross debt increased from 57.6% in 2007 to 85.7% of GDP in 
2013  in  the  EU.  These  trends  raised  some  concerns  about  the  sustainability  of  public 
finances  for  some  countries,  which  translated  in  some  cases  into  external  financial 
the 
international 
assistance 
implementation of economic adjustment programmes. 

institutions  conditional  on 

from  European  and 

Figure 1: Public expenditure and public investment and Government deficit and debt 

P
D
G

f
o
%

6

4

2

0

-2

-4

-6

-8

90

80

70

60

P
D
G

f
o
%

50

40

30

20

2007

2008

2009

2010

2011

2012

2013

Public investment
Public expenditure (RHS)

Budget balance
Government debt (RHS)

The increase of public expenditure-to-GDP did not imply higher public investment in the 
EU  over  the  whole  programming  period.  On  the  contrary,  public  investment  dropped 
significantly in the Member States most hit by the contraction of economic activity and 
the  crisis  of  public  finances.  These  are,  in  general,  the  Member  States  with  the  highest 
departures from the initial baseline (Figure 2, X axis). Public investment was by far the 
expenditure item suffering from the highest contraction even after the economic recovery 

9 

In line with tax revenue also playing a role as automatic stabiliser. 

4  

 
 
                                                            
 
 
 
 
 
 
packages decided both at European and national levels to counter the adverse impact of 
the  fall  of  GDP  and  employment  during  the  first  years  of  the  crisis.  This  fact  explains 
why some Member States comply with additionality without reducing the baseline at the 
time  of  the  mid-term  verification  and  despite  a  significant  decline  in  public investment 
during the second part of the programming period. 

Figure  2:  Difference  between  ex-ante  baseline  and  ex-post  structural  expenditure  (X  axis)  and 
average GDP growth 2007-2013 (Y axis) 

SK 

MT 

PL 

FR 

h
t
w
o
r
g
P
D
G

l

a
e
r

l

a
u
n
n
A

DE 
CZ 

AT 

UK 

RO 

BG 

BE 

SI 

ES 

EE 

LV 

HR 

5%

4%

3%

LT 

2%

1%

0%
HU 

PT 

-1%

IT 

-2%

-3%

-4%

-5%

EL 

Actual baseline compared to the initial baseline (change in %) 

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Source: Eurostat and Commission calculations 

5  

 
 
 
 
 
 
 
 
 
3.  THE PROCESS OF EX-POST VERIFICATION FOR THE 2007-2013 PERIOD 

The 21 Member States concerned by the verification of additionality (those with at least 
one  Convergence  region  in  the  2007-2013period)  had  to  submit  the  necessary 
information and corresponding tables with final data by 31 January 2016. This was done, 
although some Member States submitted the information late, in some cases by several 
months. 

Once submitted by the Member States, the Commission checked the consistency of that 
information with public investment trends observed in the Classification of the Functions 
of  Governments10  (COFOG),  which  is  provided  by  Eurostat  in  accordance  with  the 
European  system  of  accounts  (ESA  2010).  In  some  cases,  the  Commission  also  used 
publicly  available  information  on  national  expenditure  or  specifically  requested 
additional  information  from  national  authorities  in  various  bilateral  exchanges.  For 
example,  the  Commission  required  national  authorities  to  provide  further  clarification 
regarding  data  and  methodologies  used  to  calculate  spending  in  specific  categories  of 
expenditure  or  to  provide  additional  information  regarding  structural  expenditure  by 
region  or  in  public  corporations.  This  process  enabled  the  resolution  of  most 
discrepancies  and  led  in  several  cases  to  an  amendment  of  the  level  of  expenditure 
initially  proposed  to  the  Commission  (e.g.  for  Bulgaria,  Spain,  Latvia,  Hungary,  and 
Poland).  

From a methodological point of view, determining the structural spending by a Member 
State has been a difficult task, as was already found at the mid-term stage of verification. 
From the side of Member States, it entailed collecting and aggregating 'ad hoc' data on 
public  investment  by  thematic  area  and  by  the  various  levels  of  government,  including 
the  isolation  of  expenditure  in  some  regions  when  just  some  part  of  the  country  was 
eligible to the Convergence objective. The methodology proposed by Member States was 
often used just for the purpose of verifying additionality. From the Commission side, the 
major  obstacle  was  the  comparability  between  the  non-harmonised  data  provided  by 
Member States and those available in official European statistics, for which no regional 
distinction  has  been  foreseen  for  general  government  data.  The  verification  of 
expenditure  by  public  corporations  was  also  problematic  as  it  is  not  captured  in  a 
harmonised  way.  In  those  cases,  the  Commission  asked  the  Member  States  to  provide 
public reports certified by internal or external audits. 

Another problem encountered in some Member States (e.g. Poland) was the changes by 
the  Member  State  in  the  methodology  used  to  identify  the  expenditure  relevant  for 
additionality. The improvements introduced in the systems to better capture the relevant 
spending  do  not  enable  the  full  comparability  of  the  relevant  spending  across  various 
programming periods. 

In addition, the differences in methodologies for calculating structural expenditure across 
Member  States  make  their  comparability  difficult  and  may  introduce  some  significant 
bias in the assessment by the Commission. The way Member States record and classify 
expenditure for the purpose of additionality varies considerably from one to another. 

The  various  exchanges  between  the  Commission  and  the  Member  States  allowed 
providing  significant  assurance  on  the  reliability  and  consistency  of  the  information 
provided for the verification of additionality. Once the level of actual expenditure and the 

10  The Classification of the functions of government, abbreviated as COFOG, was developed in its current 
version  in  1999  by  the  Organisation  for  Economic  Cooperation  and  Development and  published  by 
the United Nations Statistical Division as a standard classifying the purposes of government activities. 
6  

 
                                                            
methodology used was agreed between the national authorities and the Commission, the 
Commission communicated the result by letter to the Member States concerned. 

4.  STRUCTURAL SPENDING IN CONVERGENCE REGIONS IN 2007-2013 

The results of the ex-post verification are summarised in Table 1, which compares the ex-
post level of average annual structural expenditure in 2007-2013 with the baseline agreed 
ex-ante  or  the  one  revised  at  the  mid-term  verification.  The  average  annual  structural 
spending (EUR 94.4 billion), expressed in 2006 prices, was on average some 1% lower 
than initially estimated (EUR 95.6 billion) but some 16% higher than the aggregate sum 
of the baselines as revised at the mid-term verification (EUR 81.4 billion). This positive 
difference  is  mostly  due  to  structural  spending  by  Member  States,  whose  baseline  was 
not revised at the mid-term verification, suggesting that the reduction of the baselines in 
ten Member States was both balanced and realistic.  

Table 1: Reference levels and actual structural spending11 

There are however significant differences across Member States when comparing the ex-
ante  and  ex-post  baselines.  For  example,  the  actual  structural  spending  for  2007-2013 
was 35%  lower than the ex-ante baseline in Greece. The variation is  over 25% in Italy 
and  between  10%  and  20%  in  Hungary,  Lithuania  and  Portugal.  In  contrast,  the  actual 
structural  spending  for  2007-2013  was  significantly  higher  than  the  initial  baseline  in 
some Member States, with amounts as high as 97% in Slovakia, 80% in Malta or more 
than  50%  in  Poland.  There  is  a  significant  correlation  between  structural  spending  and 
the  impact  of  the  economic  downturn  in  the  Member  State.  Lower  spending  than 
expected is mostly concentrated in the Member States most hit by the crisis. Spain is the 

11  Data  submitted  by  Member  States  for  the  purposes  of  additionality,  in  some  cases  modified  in 

agreement with the Commission. 

7  

Member StateReference level ex-ante average 2007-2013Reference level mid-term 2007-2013Actual spending 2007-2013Belgium1,128                                                                          1,128                                                            1,284                                          Bulgaria919                                                                             919                                                               1,108                                          Czech Republic2,549                                                                          2,271                                                            2,450                                          Germany16,504                                                                        14,562                                                          15,538                                        Estonia1,316                                                                          1,276                                                            1,421                                          Greece8,661                                                                          6,125                                                            5,628                                          Spain13,973                                                                        13,973                                                          16,599                                        France1,815                                                                          1,815                                                            2,684                                          Croatia818                                                                             818                                                               871                                             Italy20,613                                                                        13,860                                                          15,076                                        Latvia971                                                                             770                                                               1,023                                          Lithuania755                                                                             598                                                               634                                             Hungary3,330                                                                          2,828                                                            2,976                                          Malta107                                                                             107                                                               193                                             Austria139                                                                             139                                                               143                                             Poland7,940                                                                          7,940                                                            12,080                                        Portugal3,946                                                                          2,637                                                            3,268                                          Romania4,773                                                                          4,773                                                            5,077                                          Slovenia957                                                                             957                                                               1,103                                          Slovakia876                                                                             876                                                               1,723                                          United Kingdom3,495                                                                          3,072                                                            3,505                                          Total95,585                                                                        81,444                                                          94,383                                        Note: annual average in Million EUR (2006 prices) 
 
                                                            
main exception to this, because of the high levels of spending up to 2010, including two 
economic recovery packages adopted to counter the effects of the economic downturn.  

Structural  spending  by  Member  States  tended  to  decline  in  the  second  half  of  the 
programming period. The highest levels of structural expenditure are actually observed in 
the  first  three  years  of  the  period  (until  2009);  they  start  to  decline  in  2010  and  then 
significantly so as from 2011 with the downturn of economic activity and the mounting 
pressure on public finances. For this reason, some Member States asked the Commission 
to lower their baselines at the mid-term verification of additionality, as envisaged in the 
legal framework, with a view to bringing them more in line with the significant change in 
the  economic  situation.  The  Commission  decided  finally  to  reduce  the  baseline  for  ten 
Member  States12.  The  baselines  were  reduced  by  at  least  20%  in  five  Member  States 
(Greece,  Italy,  Latvia,  Lithuania  and  Portugal)  and  by  at  least  10%  in  other  four  (the 
Czech Republic, Germany, Hungary and the United Kingdom).  

The structural expenditure relevant for additionality includes the co-financing by national 
governments  within  the  European  cohesion  policy  framework.  Out  of  the  EUR  94.4 
billion of average structural spending per year, some EUR 9.7 billion corresponds to the 
national  co-financing  of  projects  carried  out  in  the  framework  of  cohesion  policy.  The 
highest  shares  are  found  in  Portugal  and  Poland,  where  the  national  co-financing 
accounts for some 25% of the total structural spending financed by the Member State. As 
regards EU funding, the total spending by the ERDF and the ESF has been some EUR 
21.4  billion,  which  accounts  for  around  18%  of  the  total  structural  spending  when 
considering both EU and national financial sources (EUR 117 billion). This share is over 
40% in countries like Lithuania or Portugal. The average share of the ERDF and the ESF 
tended to increase over the last years of the programming period because of the decline 
of structural spending by Member States. 

The structural spending executed in the whole programming period amounts to EUR 819 
billion  when  including  both  national  funding  and  the  Structural  Funds.  This  sum 
accounts  for  around  4.2  %  of  GDP  of  convergence  regions  and  some  2%  of  the  total 
public  expenditure  of  the  21  Member  States  concerned  by  additionality  in  the  same 
period. 

When  comparing  results  with  the  previous  programming  period  (2000-2006  or  2004-
2006), structural spending increased by 2% despite the impact of the economic downturn. 
This  is  mainly  due  to  the  growth  in  structural  spending  in  the  Member  States  which 
joined the European Union in 2004 or afterwards (30% increase in all of them except in 
Czech  Republic,  Lithuania  and  Hungary  in  which  structural  spending  decreased). 
Structural  spending  also  fell  in  Germany,  Greece,  Italy  and  Portugal  as  a  result  of  the 
effect of the economic downturn and some exceptional expenditure of the period 2000-
2006  (e.g.  the  2004  Olympic  Games  in  Greece  and  the  expenditure  related  to 
reunification in Germany). 

5.  CONCLUSIONS 

The  2007-2013  programming  period  was  characterised  by  a  strong  deterioration  of  the 
economic context and  social conditions. GDP growth  was below expectations and both 
the  unemployment  rate  and  the  share  of  people-at-risk  of  poverty  and  social  exclusion 
increased  significantly  in  some  Member  States.  Compliance  with  additionality  was 
challenging  in  that  context  because  of  the  increasing  pressure  on  social  expenditure, 

12  Communication  from  the  Commission.  Results  of  the  mid-term  verification  of  additionality  2007-

2013.COM(2013)104 final. 

8  

 
                                                            
notably  in  the  Member  States  most  hit  by  the  downturn,  and  because  of  the  fiscal 
consolidation measures taken to ensure sustainability of public finances. These are some 
of  the  main  reasons  explaining  why  some  Member  States  proposed  a  reduction  of  the 
baseline initially set in the NSRF at the ex-ante verification. 

In  general,  compliance  with  additionality  is  mostly  explained  by  the  higher  levels  of 
expenditure  undertaken  during  the  three  first  years  of  the  programming  period,  either 
because it was before the start of the financial crisis in 2008 or because of the exceptional 
expenditure made under the economic recovery packages adopted to counter the adverse 
effects of the sudden economic downturn. Structural spending then declined significantly 
in most Member States during the second half of the programming period. This is fully in 
line with the trends for public investment observed in the data released by Eurostat.  

All  Member  States  complied  with  additionality  except  Greece.  Six  Member  States 
complied with additionality because of the downward revision of the baseline at the mid-
term verification in 2010. In the rest, structural spending was above the level set at the 
ex-ante verification. 

The legal framework provides that the Commission may make a financial correction in 
case  of  non-compliance  with  additionality  by  cancelling  all  or  part  of  the  Structural 
Funds contribution to the Member State concerned13.  

Non-compliance  with  additionality  in  Greece  is  due  to  the  strong  and  unexpected 
deterioration of the economic context, with real GDP falling by more than 25% between 
2007  and  2013,  and  not  to  deliberate  economic  policy  decisions  of  the  Greek 
governments. Greece has been under external financial assistance since 2010 and subject 
to  three  successive  economic  adjustment  programmes,  which  in  redressing  the  overall 
economic situation in Greece has to include measures related to the reduction of public 
investment  with  a  negative  impact  in  its  ability  to  comply  with  additionality.  The 
quarterly reviews of the economic adjustment programmes have been considered positive 
by  the  Commission.  In  these  circumstances,  imposing  a  financial  correction  is  not 
appropriate.  

The  process  of  ex-post  verification  of  additionality  for  2007-2013  has  been  confronted 
with the weaknesses that led to the substantial reform of the methodology for the period 
2014-2020.  The  verification  exercise  required  considerable  resources  from  both  for 
Member States and the Commission. The consistency between the non-harmonised data 
submitted  by  Member  States  and  those  available  under  the  COFOG  classification  of 
expenditure has not been easy to ensure, not least because there is no alignment with EU 
economic governance of the former. The changes made by some Member States in their 
methodology, albeit positive because they tend to capture better the expenditure relevant 
for additionality, have been an element of difficulty when comparing expenditure across 
programming periods. 

This  report  closes  the  verification  of  additionality  for  the  2007-2013  programming 
period. 

13  Article 99 of Regulation (EU) No 1083/2006. 

9