2 The European Union Solidarity Fund
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8323/05
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COM(05) 108
| Draft Regulation establishing the European Union Solidarity Fund
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| Legal base | Articles 159 and 181a EC; co-decision; QMV
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| Department | Cabinet Office
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| Basis of consideration | Minister's letter of 14 July 2006
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| Previous Committee Report | HC 34-xviii (2005-06), para 2 (8 February 2006)
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
2.1 The European Union Solidarity Fund was set up in 2002.[4]
It provides financial support to a Member State, or a country
involved in accession negotiations for Membership of the EU, in
the event of a major natural disaster with serious effects on
that State's living conditions, natural environment or economy.
Grants are available for up to half the cost of cleaning-up operations,
the rapid restoration of public services (such as water, energy
or telecommunications) and the provision of temporary accommodation.
Previous scrutiny of the document
2.2 Last year, the Commission proposed this document. Its purpose
is to establish the Solidarity Fund on an amended basis from the
beginning of 2007:
- The scope of the Fund would no longer be restricted to assistance
towards the costs of responding to natural disasters. Assistance
from the Fund would also be available for public health emergencies,
industrial accidents, marine pollution and physical damage resulting
from terrorism.
- The threshold for assistance would be lowered.
At present, grants may be made only if the cost of the direct
damage caused by a disaster exceeds €3 billion or 0.6% of
the country's Gross National Income (GNI). The new threshold would
be €1 billion or 0.5% of GNI.
- The Commission would be able, in exceptional
circumstances, to propose the award of a grant even if the costs
of the disaster are less than the threshold (for example, where
there are terrorist attacks or public health crises, such as an
influenza pandemic).
- The Commission would be able to make an advance
payment to a disaster-stricken country. The payment might not
exceed 5% of the total estimated cost of eligible operations or
€5 million, whichever is the less.
2.3 When we considered the document in October 2005,
the Government told us that it supports the principle underlying
the Solidarity Fund but wanted clarification of some of the Commission's
proposals and had reservations about some others.[5]
We asked the Minister for further information and kept the document
under scrutiny.
2.4 In February, we considered the Minister's progress
report on the negotiations and again decided to keep the draft
Regulation under scrutiny.[6]
The Minister's letter of 14 July 2006
2.5 The Parliamentary Under-Secretary of State at
the Cabinet Office (Edward Miliband) tells us that the draft Regulation
has been considered at seven meetings of officials from the Member
States. So far, there is not a sufficient majority for the Commission's
proposals to be approved by the Council. It has been decided,
however, that the Solidarity Fund will continue to be financed
"off-budget" through case-by-case agreements between
the Council and European Parliament.
2.6 During the discussions, the Government has taken
the line that there should be a reasonably high threshold for
claims of damage so as to avoid creating a disincentive for Member
States to invest in measures to reduce the impact of disasters.
The Minister says:
"The present Solidarity Fund works well
in assisting smaller and poorer countries while ensuring that
larger and better off member states will normally fall below the
threshold. On the issue of extending the scope of the Solidarity
Fund beyond natural disasters to include industrial and technological
disasters, the UK has also noted that the Solidarity Fund should
not be extended to areas that undermine the incentives to undertake
preventive action and contingency planning or lead to under-insurance."
2.7 Summing up, the Minister says:
"The latest position, therefore, is that
in the absence of a qualified majority the current Solidarity
Fund Regulation which has no expiry date will continue as now.
We await the views of the incoming Finnish Presidency on handling
but early impressions are that the Solidarity Fund will not be
one of their priorities. Should there continue to be no qualified
majority [for the proposed new Regulation], the current Solidarity
Fund Regulation will remain unchanged for the new Financial Perspective
2007-13."
Conclusion
2.8 We note the position reached so far in the
negotiations on the draft Regulation. We should be grateful for
further progress reports. Meanwhile, we shall keep the document
under scrutiny.
4 Regulation (EC) No. 2012/2002: OJ No. L 311, 14.11.2002,
p.3. Back
5
See HC 34-v (2005-06), para 9 (12 October 2005). Back
6
See headnote. Back
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