15 European Union Solidarity Fund ~
| (35239)
12883/13
COM(13) 522
| Draft Regulation amending Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund
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| Legal base | Articles 175 and 212(2) TFEU; co-decision; QMV
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| Document originated | 25 July 2013
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| Deposited in Parliament | 1 August 2013
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| Department | HM Treasury
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| Basis of consideration | EM of 26 August 2013
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| Previous Committee Report | None
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| Discussion in Council | Not known
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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
15.1 The EU Solidarity Fund (EUSF) was created in 2002 with the
aim of enabling the EU to respond to major disasters inside the
EU and in candidate countries (those involved in accession negotiations).
The purpose is to grant affected countries financial aid, where
necessary, to help them bear the financial burden inflicted on
them by natural disasters.
15.2 Negotiations to improve the functioning of the
EUSF have been ongoing and in October 2011 the Commission presented
a Communication on the future of the fund, which included an evaluation
and proposals for improvement.[35]
The Commission says that this Communication formed the basis for
discussions with Member States, the European Parliament and other
stakeholders and that it was also the starting point for the current
proposal.
The document
15.3 The main objective of the Commission's draft
Regulation is to improve the functioning of the existing EUSF.
Whilst the Commission stays that the EUSF is generally meeting
this objective, it is considered not to be sufficiently responsive
and visible, as well as being too complicated in terms of setting
clear criteria for activation. It recommends making the instrument
quicker to respond to disasters, more visible to citizens and
simpler to use, with clearer provisions in place.
15.4 The Commission suggests this could be achieved
by a number of technical adjustments to the Regulation, namely:
- a clear definition of the scope
of the EUSF, limited to natural disasters including man-made disasters
that are the direct consequence of a natural disaster;
- a new and simple single criterion for the exceptional
mobilisation of the EUSF for so-called extraordinary regional
disasters based on a GDP-related threshold, setting this at 1.5%
of GDP at NUTS 2 level;
- the possibility of making rapid advance payments
to affected Member States, to be limited to 10% of the expected
amount of the financial aid and capped at €30 million (£26
million) — the Commission proposes that recoveries from
Member States from the EUSF, the European Regional Development
Fund and the Cohesion Fund, up to a maximum annual amount of €50
million (£44 million), should be made available to the EUSF
as assigned revenue in order to make commitment appropriations
for advance payments available in the EU budget;
- inclusion of a specific provision for slowly
unfolding disasters, such as drought, and definition of the start
of such disasters as the date when public authorities take the
first counter-measures;
- introduction of provisions that encourage more
effective disaster prevention, including full implementation of
relevant EU legislation on prevention, the use of available EU
funding for related investments and improved reporting on these
— the Commission proposes that in the event that a disaster
of the same nature occurs as one for which the EUSF was previously
mobilised, and EU legislation has not been complied with, it would
consider rejecting a new application or granting a reduced amount
of aid only; and
- merger of the decision awarding aid and the implementation
agreements into a single act.
15.5 Additionally, the Commission:
- says that it has taken account
of the recommendations of the performance audit report of the
European Court of Auditors on financial aid to Italy for the L'Aquila,
Abruzzi, earthquake of 2009,[36]
by clarifying the definition of the terms "temporary accommodation"
and "immediate emergency operations", as well as including
a provision on revenue generation;
- proposes a number of smaller technical elements,
such as a provision on the eligibility of VAT and the exclusion
of Technical Assistance and a revised provision to avoid double
financing; and
- proposes modifications to bring the Regulation
in line with the Financial Regulation, as amended in 2012 —
aside from terminology, this particularly concerns rules and regulations
related to the implementation of the EUSF by Member States and
by eligible candidate countries. However, as the Commission notes,
in places it has been necessary to derogate from certain provisions
of the Financial Regulation so as not to jeopardise the objectives
of the fund, particularly the case in relation to the time-consuming
process of designating the implementing authorities, including
those for audit and control, and the timing of annual reporting.
The Government's view
15.6 The Financial Secretary to the Treasury (Greg
Clark) says that:
- the Government supports the
Commission's objective of improving and better targeting the functioning
of the EUSF and agrees that it should be in a position to respond
rapidly and effectively to disaster stricken countries that meet
the defined criteria for support;
- to that extent the Government in principle supports
amending the EUSF Regulation to improve this process and notes
the Commission's specific proposals; and
- the Government will now play a constructive role
in assessing these and will seek a few further clarifications
from the Commission (such as the proposed use of recoveries and
the source of funding proposed for preventative measures) before
it can decide on its position — specifically, it will work
to ensure that the Budget size is respected.
15.7 The Minister adds that:
- whilst the Government agrees
with the objectives of the EUSF, disaster response is primarily
the responsibility of national governments and care should be
taken that the fund does not act in the place of Member States
or candidate countries; and
- the Government therefore welcomes the fact that
the EUSF Regulation will continue to be based on the subsidiarity
principle and that, accordingly, would intervene only to complement
national efforts and where the capacity of a disaster-stricken
country to deal with the situation alone has reached its limits.
15.8 Turning to financial implications the Minister
says that:
- the EUSF is not budgeted and
actual spend depends on applications submitted by eligible countries;
- expenditure is based on the (unpredictable) occurrence
of natural disasters and on the maximum amount of annual allocation
available to the fund, as decided in the Interinstitutional Agreement
concerning budgetary matters; and
- the draft Regulation takes account of the 2014-2020
Multiannual Financial Framework (MFF), which foresees maintaining
the current mechanism whereby the necessary budgetary resources
for awarding aid are raised over and above MFF ceilings by a decision
of the Budget Authority within a maximum annual allocation of
€500 million (£437 million), in 2011 prices.
Conclusion
15.9 Whilst the Commission's intention of improving
the functioning of the European Union Solidarity Fund is clearly
welcome, we note the Government's intention of ensuring the adequacy
of the details of the draft Regulation, particularly with regard
to budgetary matters. So, before considering the matter further,
we should like hear about progress in satisfying any Government
concerns during Council discussion of the proposal. Meanwhile
the document remains under scrutiny.
35 (33223) 12794/11: see HC 428-xl (2010-12), chapter
13 (2 November 2011). Back
36
(34927): see HC 83-vi (2013-14), chapter 21 (19 June 2013). Back
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