Graph 1. Public investment, EU fund inflows and additionality.
Yearly averages for 11 EU countries that are the major beneficiaries of EU Structural and Investment Funds: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Portugal, Romania and Slovakia. EU funds covered: European Regional Development Fund, European Social Fund, Cohesion Fund.
Sources: own calculations, public investment, GDP: Ameco; EU fund inflows: cohesiondata.ec.europa.eu, 2014-2020 additionality targets: Partnership Agreements, , https://ec.europa.eu/info/publications, 2007-2013 additionality outcomes: European Commission (2017).
Graph 2. EU fund allocations, public investment and additionality commitments in the 11 main beneficiary EU countries. Source: EU fund allocations: cohesiondata.ec.europa.eu, public investment (GFCF): Ameco, additionality targets: Partnership Agreements for 2014-2020, ec.europa.eu/info/publications
In Graph 2, information since 2014 is provided by country, showing that while most countries committed to keep their public investment level near or below 3% of GDP over 2014-2020, some countries (Bulgaria, Poland and Romania) were more ambitious in their commitment, while their actual average 2014-2016 public investment levels fall short of their commitments. In the rest of the countries with a low commitment level, actual 2014-2016 average public investment levels are significantly higher than the commitment levels in the additionality verification exercise. Yet, as already highlighted above, these higher than committed levels of 2014-2016 public investment were triggered by the EU fund inflows of the 2007-2013 period.European Commission (2014): Investment for Jobs and Growth. Promoting Development and Good Governance in EU Regions and Cities. Sixth Report on Economic, Social and Territorial Cohesion. Directorate General for Regional and Urban Policy, Brussels.
European Commission (2017): Ex post verification of additionality 2007-2013. Communication from the Commission, COM (2017) 138 final, 23.03.2017 Brussels.
Mohl, Philippe (2016): Empirical evidence on the macroeconomic effects of EU Cohesion Policy. Springer Gabler.
OECD: OECD Economic Surveys: Euro Area 2016
Anita Halasz COHESIFY Research Fellow at Central European University Center for Policy Studies
[1] These are 11 countries: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Portugal, Romania and Slovakia
[2]Countries where 15-65% of the population lives in less developed regions (Greece, Italy and Slovenia) commit to maintain a pre-set level of public investment in the supported regions
[3] There is no accrual based cross-country comparative time series data available on the contribution of EU funds to national public investment. Table 2c in the Stability and Convergence Programmes contains information on public expenditure fully matched by EU funds revenue, and as of 2015 (as of 2016 for some countries) there is information included in this table on investment fully matched by EU funds revenue
[4] A further issue complicating the analysis is that historically, additionality has been a requirement for the ERDF and the ESF, and not for the Cohesion Fund. The Cohesion Fund is a major contributor to national public investment
[5] The calculation method for the 2007-2013 additionality targets was different. There was no unified methodology across countries, either. The main difference in assessment is that in 2007-2013, verification aimed to capture all national structural expenditure (e.g. expenditure spent on the same types of investments as co-financed by the Structural Funds). In 2014-2020, verification only captures public investment, and the category of public investment also contains expenditure that would not be eligible under Cohesion policy
[6] This peak does not show in the EU fund inflows data. This can be due to the fact that public investment data is accrual based