[section separator="true"]
[section-item 9]
[row]
[column 12]
[toc-this]
Definition
European added value (EAV) is the value that an EU action adds through EU policy, regulation, legal instruments and spending, over and above that created by member states acting alone.
The definition implies that an EU action should:
- be taken only if it is more effective than action taken at national, regional or local level, except in the areas that fall within its exclusive competence (the principle of subsidiarity);
- not go beyond what is necessary to achieve the objectives of the Treaties (the principle of proportionality);
- achieve clear additional benefits from a collective effort, compared with action by member states, either individually or in cooperation and should not replace public or other equivalent action by member state unless there is additional benefit (the principle of additionality); and
- exceed those that would have been realised in the absence of public expenditure and should be consistent and complementary to other EU and national programmes, with a view of achieving synergetic effects and avoiding duplications (the principle of complementarity).
These principles should always be taken into account when defining criteria for assessing EAV in an audit context, and when drawing conclusions and making recommendations on EU action.
Instructions
Analyse underlying motives
As auditors, we should gain a clear understanding of the underlying motives and dynamics driving EU policy action and whether these are leading to the achievement of meaningful EAV. Most of the EU-level actions tend to result from compromise between several rationales and interests, a political process which can also evolve over time from the rationale which originally justified an EU-wide action (for example, the reform of the Common Agricultural Policy). The motives can be of a legal, political, economic, social or environmental nature, and the consequence of the following:
- the Treaty objectives and obligations, which lay down the competences and obligations of EU institutions. For example, the EU has exclusive competence on commercial policy or competition. There are also budgetary or institutional matters where it is clear that only the EU can, or even has to act, and where the individual action of members states is not possible (such as the multiannual financial framework regulation and the draft budget);
- values and principles shared by member states - such as peace, democracy, integration and rule of law – which can be a motivation for overcoming conflict and a lack of cooperation and common action;
- common objectives shared by member states that they would like to see being effectively pursued and addressed - for example, in the areas of justice and security;
- state interests on specific issues that one or more member state may push to have addressed at EU level action. EU action may be sought for interventions that not all members states themselves have enough resources for. member states may also seek to act as a bloc to gain a more powerful position in, for example, trade and climate change negotiations; and
- economic, environmental or social pressure, for example, the high economic interdependence of national economies often necessitates the need to develop EU-wide mechanisms to deal with EU-wide market failures. 'Solidarity', with the aim of ensuring that all parts of Europe develop, and international development aid, are other arguments for EU-level action. Animal welfare, competitiveness, rural development are additional examples.
Key questions
Auditors should consider asking the following three key questions when assessing EAV, ex post:
- Is the overall action taken at EU level necessary and relevant for addressing a specific EU policy objective or obligations?
The greater the EU relevance, the more likely member state intervention alone is or was insufficient. Key questions to consider include: how the problem varies across the national, regional and local levels of the EU; the extent to which the problem is widespread across the EU or limited to a few member states, and whether the underlying causes are the same across the EU.
- Is the EU action targeting, in the most appropriate form, areas that can provide the highest net benefit at EU-level, whether economic, social and/or environmental?
This is linked to resource allocation, complementarity with other EU and national programmes, and opportunity cost.
- Is the EU-level action being delivered more
[link title="economically" link="%2Faware%2FPA%2FPages%2FConcepts%2FEconomy.aspx" /]
, [link title="efficiently" link="%2Faware%2FPA%2FPages%2FConcepts%2FEfficiency.aspx" /]
or [link title="effectively" link="%2Faware%2FPA%2FPages%2FConcepts%2FEffectiveness.aspx" /]
than member states acting alone?
Conclusions
A conclusion can be drawn on whether grouped action at EU-level is providing better results - in terms of, for example, better pooling of resources, wider synergies, more efficient processes, more results and greater impact – when compared to similar actions undertaken at national or local level.
The difficulties of coming to a definitive conclusion on EAV should not be underestimated. Measuring the net increase in benefits for citizens as a result of an EU action, and obtaining evidence of whether the increase is larger than that from a comparable national, regional or local intervention, through the use of counterfactuals can very challenging and, at times, incomplete or inconclusive.
The initial assessment of EAV done by the Commission when proposing new or renewed actions or interventions, or when evaluating and reporting on results and achievements of that action, should also be considered as this can provide the auditor with an indication of how, and the extent to which, EAV can be assessed.
Additional considerations
Apart from attempting to evaluate and measure EAV, auditors can also have a valuable role to play by examining the auditees' performance management system for measuring and assessing EAV. For example, we could look at the design of the performance management systems to assess EAV. We could also look at the quality of the indicators and measures used for assessing and measuring EAV (when there is a strong performance management system at EU level and in member states) and whether there are appropriate controls for collecting, validating, analysing and reporting for EAV purposes.
[/toc-this]
[/column]
[/row]
[/section-item]
[section-item 3]
[row]
[column 12]
[panel panel-style="boxed" title="Related%20documents" icon="book" class="ref-panel"]
[/panel]
[/column]
[/row]
[row]
[column 12][/column]
[/row]
[row]
[column 12]
[toc fixed="true" selectors="h2%2Ch3" class="basic-toc" /]
[/column]
[/row]
[/section-item]
[/section]
