Select Committee on European Scrutiny Thirty-Sixth Report

2 The European Union Solidarity Fund



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COM(05) 108

Draft Regulation establishing the European Union Solidarity Fund

Legal baseArticles 159 and 181a EC; co-decision; QMV
DepartmentCabinet Office
Basis of considerationMinister's letter of 14 July 2006
Previous Committee ReportHC 34-xviii (2005-06), para 2 (8 February 2006)
To be discussed in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested


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."


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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