8 European Union Solidarity Fund
| (25711)
10005/04
COM(04) 397
| European Union Solidarity Fund — Annual report 2002-2003 and report on the experience gained after one year of applying the new instrument
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| Legal base | — |
| Document originated | 26 May 2004
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| Deposited in Parliament | 3 June 2004
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| Department | HM Treasury |
| Basis of consideration | EM of 18 June 2004
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| Previous Committee Report | None
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
8.1 Following severe flooding in the summer of 2002 in Austria,
the Czech Republic, France and Germany the European Union Solidarity
Fund (EUSF) was established in November 2002 to provide financial
assistance to Member States (and countries participating in pre-accession
negotiations) affected by major natural disasters. The EUSF can
be mobilised in three cases: a major disaster (defined as causing
uninsured damage to one country greater than €3.0 billion,
at 2002 prices, or 0.6% of Gross National Income); where "a
region has been affected by an extraordinary disaster, mainly
a natural one, affecting the major part of its population, with
serious and lasting repercussions on living conditions and the
economic stability of the region"; and where a major disaster
also affects a neighbouring country. The latter two cases are
regarded as exceptional. Mobilisation of the EUSF is financed
under a flexibility instrument allowing up to €1 billion
annually above the Financial Perspective ceiling.
8.2 The Commission is required make an annual report
to the Council and European Parliament on the implementation of
the EUSF in the preceding year.
The document
8.3 This document is the first annual report (covering
the relevant part of 2002 and the whole of 2003). The Commission
takes the opportunity of this report to comment also on experience
of applying this new measure. The document is in three main sections:
- the origins and nature of the
EUSF;
- the implementation of the EUSF in 2002 and 2003;
and
- issues arising from experience of implementing
the measure.
8.4 The Commission concludes that, so far, the EUSF
has successfully fulfilled its main purpose of providing assistance
to countries affected by major disasters. But it notes difficulties
in assessing applications for using the EUSF for exceptional cases,
which have unexpectedly been the majority of calls. The Commission
comments that it is too early to consider amending the EUSF Regulation,
but suggests a number of possible improvements. The Commission
will:
- take administrative steps to
ensure "exceptional circumstance" applications are processed
more quickly, including by requesting a budget from 2005 to provide
technical assistance to Member States applying for EUSF intervention;
- consider whether immediate assistance might be
given if a Member State's own resources are overwhelmed;
- consider reducing the level of aid granted in
"exceptional circumstances". Only 7.5% of the EUSEF
may be used for this purpose, so there is a danger funding could
be exhausted if a number of large applications are accepted early
in the year; and
- discuss limiting the grant to a certain proportion
of the total costs of eligible operations rather than total damages
caused by the disaster.
The Government's view
8.5 The Financial Secretary to the Treasury (Ruth
Kelly) says:
"The report has no immediate policy implications.
The Government is concerned about the Commission proposals for
discussion. In particular, we consider provision of technical
assistance to applicants and funding of Member States when their
own resources are overwhelmed to be unnecessary and unhelpful.
More generally, the Government will resist moves which make it
too easy to mobilise the ESF as this would undermine Member States'
incentive to plan properly for potential disasters."
Conclusion
8.6 This document provides useful preliminary
information on the recently established European Union Solidarity
Fund. We note the Government's reservations about the Commission's
thinking on the future of the EUSF: we will examine any future
proposals closely.
8.7 Meanwhile we clear the document.
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