4 European Union Solidarity Fund
| (a)
(35239)
12883/13
COM(13) 522
(b)
(35654)
17741/13
+ ADD 1
COM(13) 856
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Draft Regulation amending Council Regulation (EC) No. 2012/2002 establishing the European Union Solidarity Fund
Commission Report: European Union Solidarity Fund: Annual Report 2012
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| Legal base | (a) Articles 175 and 212(2) TFEU; co-decision; QMV
(b) —
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| Department | HM Treasury
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| Basis of consideration | Minister's letter of 27 February 2014
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| Previous Committee Reports | (a) HC 83-xiv (2013-14), chapter 15 (11 September 2013)
(b) HC 83-xxviii (2013-14), chapter 6 (22 January 2014)
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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
4.1 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.
4.2 A major disaster is defined as one where damage
exceeds the lower of 0.6% of Gross National Income or €3
billion in 2002 prices. Applications for cases that do not meet
this threshold may be accepted exceptionally from countries affected
by the same disaster as in a qualifying country or for regions
where a disaster affects a major part of the population with serious
and lasting repercussions. Aid is normally limited to alleviating
non-insurable damage and is repayable if assistance is received
subsequently from third parties. Operations benefiting from the
EUSF cannot benefit from other EU funds.
4.3 The EUSF Regulation requires the Commission to
report annually on the Fund.
4.4 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.[9]
It said 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,
document (a), which it presented in July 2013.
4.5 The main objective of the Commission's proposal
was to improve the functioning of the existing EUSF. Whilst the
Commission said that the EUSF was generally meeting this objective,
it was considered not to be sufficiently responsive and visible,
as well as being too complicated in terms of setting clear criteria
for activation. It recommended making the instrument quicker to
respond to disasters, more visible to citizens and simpler to
use, with clearer provisions in place. The Commission suggested
this could be achieved by a number of technical adjustments to
the scheme.
4.6 In September 2013, we said that, whilst the Commission's
intention of improving the functioning of the EUSF was clearly
welcome, we noted 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 asked to hear about progress in satisfying any Government concerns
during Council discussion of the proposal. Meanwhile the document
remained under scrutiny.
4.7 The Commission Report for 2012, presented in
December 2013, document (b), considered EUSF applications received
in 2012 as well as applications pending from 2011. The Commission
noted its view of the management of the EUSF in 2012 supported
discussions in its 2011 Communication on the future of the Fund
and recalled that it had presented the draft Regulation to improve
operation of the EUSF by, among other things, facilitating a swifter
response to applications for aid. The Report was accompanied by
three annexes which set out the 2012 thresholds for mobilisation
of the Fund (for the five Member States, Germany, Spain, France,
Italy and the UK, limited to €3 billion in 2002 prices, the
threshold was €3.606 billion), EUSF applications pending
from 2011 and those received in 2012 and all applications to the
Fund since 2002.
4.8 When, in January 2014, we reported on this document
we said that it gave useful support for the need to improve the
EUSF. But we also said that, in our view, the Government should
make an application for EUSF aid in connection with the recent
severe flooding in the UK, if such an application complied with
the relevant criteria. We asked whether this was the Government's
intention, what information it was collecting in support of any
such application to the fund and, if it was not intending to apply,
why this was the case. In the meantime this document also remained
under scrutiny.[10]
The Minister's letter of 27 February 2014
4.9 The Economic Secretary to the Treasury (Nicky
Morgan) tells us, in relation to the draft Regulation, document
(a), that:
· Council working group consideration of
the proposal began in January;
· the Presidency has conducted negotiations
to a very compressed timetable with a number of working group
meetings since 10 January;
· a Presidency text was discussed by COREPER
on 12 February and is now in trilogue; and
· given the pace at which discussions are
progressing, the timetable for negotiations going forward is not
clear but the Government understands that the Presidency is aiming
to secure an agreed text in time for the European Parliament's
March or April plenary.
4.10 Reminding us that the Government had two key
objectives in the negotiations, the Minister says that:
· the first was to ensure that budgetary
restraint was considered;
· in discussions thus far the Government
has worked with like-minded Member States to eliminate language
that could result in budget size not being respected;
· this has included discussions of the proposed
mechanism for advance payments funded by recoveries; and
· the Government will continue to carefully
assess all proposals and intervene as appropriate to ensure that
budgetary control is exercised.
4.11 As for the Government's second objective, to
protect the existing scope of the Fund, the Minister says that
the Government has achieved this by resisting proposed expansions
and pressing for the insertion of clear eligibility requirements
and removal of ambiguous language that exposes the Fund to interpretation
and confusion.
4.12 Turning to our questions in relation to the
recent flooding in the UK, which we posed in the context of the
Commission Report, document (b), the Minister says that:
· the Government is doing everything it
can to support those affected by flooding and has announced a
package of measures to support affected homes and businesses;
· further detail of the package of measures
can be found on the Treasury website, www.gov.uk/government/news/uk-floods-2014-government-response;
· the Government notes that there are a
number of eligibility requirements for a Member State applying
for EUSF assistance;
· these include a threshold of total direct
damage greater than €3 billion in 2002 prices or 0.6% of
the UK's GNI, apart from in exceptional circumstances relating
to intense regional damage;
· as part of the wider response, these eligibility
requirements are being considered; and
· the Government continues to consider all
funding options, including EUSF, to ensure that it pursues the
best course of action for UK taxpayers.
Conclusion
4.13 We are grateful to the Minister for her account
of where matters stand on the draft Regulation. However, we are
concerned that a general approach appears to be under discussion
with the European Parliament and Commission in trilogues. We ask
the Minister whether:
· the Government thinks that the general
approach meets its two objectives; and
· whether the adoption of the general
approach by COREPER means the Government is irreversibly committed
to texts of the main elements of the proposal and, if so, what
this means for the scrutiny reserve.
4.14 Meanwhile this document remains under scrutiny.
4.15 As for the Commission Report on EUSF activity
in 2012, we note the information the Minister gives us about the
consideration the Government is giving to possible use of the
Fund in relation to the recent flooding. However, clearly the
Minister is not yet able to fully answer our questions, particularly
as to whether or not the Government intends to make an application
for assistance from the Fund. So pending that fuller response
this document also remains under scrutiny.
9 (33223) 12794/11: see HC 428-xl (2010-12), chapter
13 (2 November 2011). Back
10
See headnote. Back
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