Center for Economic Studies and ifo Institute (CESifo), Munich
The additionality principle says that the funds of the European Union should not replace, but be an addition to national regional policy funds. The benchmark for the co-funding is that the EU bears 50% of total costs associated with regional projects eligible for EU support. In some regions, however, the EU contribution has reached 85% of total costs. This study examines how such additionality degrees are determined. Our findings indicate that the regional variation of additionality degrees is largely in line with EU cohesion policy goals. Most notably, higher shares of EU funds are provided to regions with lower GDP per capita. Furthermore, while the share of service-sector employees in a region is negatively related to the additionality degree, the impact of the rate of long-term unemployment is positive.
additionality cohesion policy EU regions matching grant growth and distribution