Explanatory Memorandum to COM(2009)38-1 - Amendment of Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)

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dossier COM(2009)38-1 - Amendment of Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural ...
source COM(2009)38 EN
date 28-01-2009
The Council of the European Union of 11 and 12 December 2008 agreed on a European Economic Recovery Plan (EERP), which envisages the initiation of priority action to enable European economies to adjust more rapidly to current challenges, based on an effort equivalent in total to around 1.5% of European Union GDP (a figure amounting to around EUR 200 billion). Out of this amount, EUR 1.5 billion should be made available to all Member States via the European Agricultural Fund for Rural Development (EAFRD) with a view to developing broadband internet in rural areas and to strengthen the new challenges as defined in the context of the assessment of the 2003 midterm reform of the Common Agricultural Policy – the 'Health Check' – which was completed in November 2008. One third of this amount (EUR 0.5 billion) should be spent on new challenges related operations and two thirds (EUR 1 billion) on developing broadband internet infrastructure in rural areas. The motivation for this allocation of additional funds to the two priority areas of the EU's rural development policy is the following:

Rural communities can be amongst the most vulnerable to economic downturn. In difficult times, there is a greater risk of exclusion – and when the economy starts to return to growth, the benefits can flow more slowly.

One of the most important tools in the modern economy is broadband internet. In today's Europe, it unlocks the paths to finding new jobs, learning new skills, identifying new markets and cutting costs. It is as essential to schools, libraries and government offices as to businesses. It has become an essential tool to making the modern economy work. But there are gaps – communities where the market has not delivered coverage, due to dispersed populations and high costs. That is why the European Economic Recovery Plan set out a goal of developing broadband networks to achieve a full 100% high-speed internet coverage by 2010. It also underlined the need to upgrade the performance of many existing networks, alongside efforts to promote competitive investments in fibre networks and free up spectrum for wireless broadband.

The support for broadband infrastructure is also favoured by Member States' possibility to choose specific aid intensity rates for public infrastructure investments in rural areas, with a maximum of up to 100%. This creates already a good basis for absorption of the funds for broadband from the Recovery Plan. For other non-public infrastructure operations the rates as defined under the general state aid rules apply.

Furthermore, Member States have to ensure the utmost acceleration of the implementation of additional funds from the Recovery Plan already from 2009 in order to allow for a most timely response to the economic crisis.

The EU already uses rural development to promote growth in rural economies and the overall health of rural society. The 'Health Check' of the CAP identified a series of new challenges of particular relevance to European agriculture. Tackling these challenges more quickly would allow agricultural communities to bring forward work to address these challenges and better placed to be ready for improved economic circumstances. This would follow the emphasis given by the Recovery Plan to accelerating the implementation of EU structural actions, to bring investment on stream early in difficult times.