Select Committee on European Scrutiny Thirty-Eighth Report













Commission Communication on a Community response to the flooding in Austria, Germany and several applicant countries.



Draft Inter-Institutional Agreement on the financing of a European Union Solidarity Fund.



Draft Regulation establishing a European Solidarity Fund.




Legal base:

(a) —

(b) —

(c) Articles159 and 308 EC; consultation; unanimity


Document originated:

(a) 28 August 2002

(b) 11 September 2002

(c) 18 September 2002

Deposited in Parliament:

(a) 18 September 2002

(b) 23 September 2002

(c) 23 September 2002


HM Treasury

Basis of consideration:

EM of 23 September 2002

Previous Committee Report:


To be discussed in Council:

21 October 2002

Committee's assessment:

Politically important

Committee's decision:





    1. The severe flooding in central Europe in August 2002 has prompted the Commission to propose both action in response to the floods themselves and establishment of an EU fund to respond to similar crises in future. The documents contain the Commission's proposals and draft legislation.
    2. The documents

    3. In its Communication, document(a), the Commission describes the recent flooding and a range of measures it has either already taken under its own authority or proposes for further action. The Commission has already re-programmed Structural Funds allocated to Germany and Austria giving greater priority to reconstruction projects. Its proposals include:

    • reallocation of uncommitted Trans-European Networks (transport and energy) resources;

    • mobilisation of unallocated Pre-Accession Funds for the Czech Republic and Slovakia;

    • emergency relief measures in the field of agriculture and rural development, state aids and public procurement rules, and possible EIB loans; and

    • developing the Commission's role in co-ordinating Member States' civil preparedness and bilateral assistance.

Document (a) also suggests an EU Disaster Relief Fund for this and future crises.

    1. In document (b) the Commission presents a draft Inter-Institutional Agreement (IIA) for a new flexibility mechanism specifically for the funding of a European Union Solidarity Fund. _1 billion would be available for the Fund in any year, of which at least a quarter must remain available on 1 October, to cover needs arising until the end of the financial year. Under the proposed Regulation (document (c)) expenditure by the Fund would be entered in the budget over and above the relevant Financial Perspective (FP) ceilings. The Commission would present a proposal to amend the annual budget and, following negotiations between the two arms of the Budgetary Authority (Council and Parliament), an amending budget would be adopted.
    2. Document (c) is a draft Regulation to establish the proposed European Union Solidarity Fund. The Fund would cover major natural, technological and environmental disasters, focus on short-term restoration, complement the efforts of affected countries and cover a share of public spending committed to tackling the disaster.
    3. The Government's view

    4. The Financial Secretary to the Treasury (Ruth Kelly) tells us:
    5. "The package of measures proposed by the Commission aims to show EU solidarity with the victims of the recent floods and to put in place robust arrangements for responding rapidly to future major disasters within clear procedural rules and budgetary limits. The Government supports these aims, recognising that the Community's cohesion objectives give it a role alongside the Member States in contributing to emergency relief in the event of major disasters. The Government also accepts that the scope of the current flexibility instrument under the IIA of 6 May 1999 — which allows for spending of up to _200 million a year above the ceilings in one or more categories of the budget under certain conditions — may be inadequate to allow for an appropriate Community response in the case of major disasters.

      "While broadly supporting the draft IIA and proposed Regulation, the Government will wish to press for the thresholds defining a major disaster to be set at a high enough level to ensure that the Fund is reserved for disasters of an exceptional scale in which, on grounds of subsidiarity, a Community response is justified. The Government will also wish to ensure that the proposed flexibility mechanism is not seen as the first and only means of financing the Fund in future years. Wherever possible it would wish to see the Fund financed through a redeployment of resources within the FP ceilings before the flexibility mechanism is mobilised, without increasing the overall limit set for the Fund in any year of _1 billion. The Government will seek to ensure that the Budgetary Authority plays a full part in decisions to mobilise the Fund whether or not there in recourse to the proposed flexibility mechanism. Provided the conditions governing the use of the Fund and the flexibility mechanism are strictly defined and adhered to, the Government believes that the new measures will be consistent with its objective of maintaining EU budget discipline."


    6. We note the Government's general support for the proposals and its expectation that budget discipline can be maintained. We clear the documents.


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Prepared 11 November 2002