Explanatory Memorandum to COM(2013)522 - Amendment of Council Regulation (EC) No 2012/2002 establishing the EU Solidarity Fund - Main contents
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| dossier | COM(2013)522 - Amendment of Council Regulation (EC) No 2012/2002 establishing the EU Solidarity Fund. |
|---|---|
| source | COM(2013)522  |
| date | 25-07-2013 |
The EU Solidarity Fund (EUSF) was created in 2002 to enable the EU to respond to major disasters inside the EU and in countries involved in accession negotiations. The instrument is generally meeting its objectives well but is considered not to be sufficiently responsive and visible and as far as certain criteria for its activation are concerned too complicated and not sufficiently clear.
In 2005 the Commission presented a proposal for a new EUSF Regulation. While the proposal was favourably received by the European Parliament it was not adopted in the Council. The Commission officially withdrew the proposal in June 2012.
In October 2011 the Commission presented a Communication on the Future of the Solidarity Fund which contains an evaluation of the operations of the current instrument and proposes options for improving its functioning. An analysis of the current policy was also included in a separate chapter to the EUSF annual report for 2008.
This proposal is situated in the context of the new Multiannual Financial Framework for the years 2014-2020.
Moreover, the proposal complements the recent common proposal of the Commission and the High Representative for implementing arrangements of the Solidarity Clause enshrined in Article 222 TFEU which underlines the role of the Solidarity Fund as one of the key Union instruments in applying this provision of the Treaty.
The Communication of October 2011 served as a basis for discussions with the Member States and the European Parliament and other stakeholders.
The European Economic and Social Committee and the European Parliament adopted reports that very broadly shared the analysis of the Communication and supported the ideas presented by the Commission for improving the Fund through a number of adjustments to the Regulation.[7][8]
Member States expressed their views in meetings of the COCOF and Structural Actions Working Party of the Council.
The main objective of the proposal is to improve the functioning of the existing Solidarity Fund instrument by making it quicker to respond and more visible to citizens, simpler to use and its provisions clearer. This is to be achieved by a limited number of technical adjustments to the Regulation. The principles of the instrument remain unchanged as do its financing method outside the multiannual financial framework (MFF) and the likely level of spending.
The proposal contains those adjustments to the EUSF-Regulation that were discussed in the 2011 Communication on the Future of the Solidarity Fund:
· A clear definition of the scope of the EUSF limited to natural disasters including man-made disaster that are the direct consequence of a natural disaster (cascading effects). This will eliminate existing legal uncertainties about the scope and thus avoid that applications are presented which do not meet the conditions.
· 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. As demonstrated in the 2011 Communication the lack of clarity under the current provisions about the conditions for exceptionally mobilising the EUSF will be eliminated by setting the damage threshold for regional disasters at 1.5% of GDP at NUTS 2 level. This will considerably simplify and speed up the preparation of applications by eligible States and their assessment by the Commission. At the same time it will significantly reduce the number of rejected applications as applicants will know from the outset whether the criterion is met. The rate of 1,5% of regional GDP is proposed as the new threshold because a detailed analysis of past applications has shown that it will lead to almost identical results as in the past while achieving considerable simplification and considerably help speeding up decision-making and paying out grants.
· The introduction of the possibility to make rapid advance payments upon request of the affected Member State, limited to 10% of the expected amount of the financial aid capped at EUR 30 million. Recoveries from the Member States from the Solidarity Fund and from the Cohesion Instruments (ERDF and Cohesion Fund) up to a maximum annual amount should be made available to the Solidarity Fund as assigned revenue in order to make committments for advance payments available in the Union budget. In addition to including a specific provision in the Solidarity Fund Regulation this will also require including a provision in the Common Provisions Regulation[9] relating to the Cohesion Policy Funds and in the transitional provisions relating to the current programming period. It is envisaged that the Commission will present an amending proposal to be adopted at the same time as the present proposal.
· The inclusion of a specific provision for slowly unfolding disasters such as drought. Defining the start of such disasters as the date at which the public authorities took the first counter-measures will eliminate legal difficulties stemming from the current obligation to submit applications within 10 weeks of the date of the first damage.
· The introduction of certain provisions encouraging more effective disaster prevention, including full implementation of relevant Union legislation on prevention, the use of available Union funding for related investments and improved reporting on these actions. In the event that a disaster of the same nature as one for which the Fund was previously mobilised should occur and Union legislation has not been complied with, the Commission will seriously consider rejecting a new application or granting a reduced amount of aid only.
· The merger of the decision awarding the aid and the implementation agreements into a single act. This administrative measure will help to speed up the processing of applications inside the Commission and therefore allow paying out aid more rapidly.
The recommendations of the performance audit report of the European Court of Auditors on the financial aid to Italy for the L'Aquila earthquake[10] are taken into account by including a clearer definition of the terms 'temporary accommodation' and 'immediate emergency operations' as well as a provision on revenue generation.
Moreover, a number of further elements were included in the proposal, such as a specific provision on the eligibility of VAT and the exclusion of Technical Assistance, a provision requiring respect for the Union acquis, a revised provision to avoid double financing, extended ex-post reporting on prevention measures and a provision on the use of the Euro and its conversion into national currencies.
Lastly, a number of modifications are introduced to bring the Regulation in line with the Financial Regulation as amended in 2012. This concerns not only terminology but in particular certain rules and obligations in relation the implementation of the Fund by Member States under the principle of shared management and by eligible candidate countries (countries negotiating the accession to the Union) under the principle of indirect management. In order not to put at risk the objectives of the Fund, i.e. to make financial assistance available as quickly as possible after the occurrence of a major disaster, it is however necessary to derogate from certain provisions of the Financial Regulation, in particular as concerns the normally time-consuming process of designating the implementing authorities, including those for audit and control, as well as regarding the timing of annual reporting.
Contents
The legal basis of this proposal is Article 175 third subparagraph and Article 212 second paragraph of the Treaty on the Functioning of the European Union which corresponds with the legal base of the current Regulation. Recourse to Article 212 is necessary to include non-Member States that are in the process of negotiating their accession to the EU.
While the Solidarity Fund is to be seen as one of the Union instruments for the implementation of the Solidarity Clause enshrined in Article 222 TFEU the latter is not appropriate as legal basis for the Fund. Article 222 is reserved for the most serious of crisis situations whereas the criteria for the activation of the Solidarity Fund are defined in a way leading to the use of the Fund several times each year. Under the legislative procedure foreseen by Article 222 the European Parliament is informed but not actively involved; this is not in line with the provisions of the Fund fully involving the Parliament in raising the appropriations for Solidarity Fund financial aid. Moreover, the Solidarity Fund includes certain non-Member States not covered by Article 222.
The proposal respects the subsidiarity principle and does not go beyond what is necessary to achieve the objectives of the Solidarity Fund as established in 2002. The current Solidarity Fund Regulation itself is based on the subsidiarity principle. Accordingly, the Fund intervenes only in cases where the capacity of a disaster-stricken country to deal with the situation alone reaches its limits. The objective is not to deal with disasters at EU level but to grant affected countries financial aid to help them bear the financial burden inflicted on them as a consequence of a natural disaster The proposal does not touch on these constituent principle nor does it change the eligibility criteria for disasters to be accepted.
The proposal respects the proportionality principle. It does not go beyond what is necessary to achieve the objectives already lead down in the current instrument.
The proposal takes account of the Multi-annual Financial Framework 2014 – 2020 which foresees maintaining the current mechanism whereby the necessary budgetary resources for awarding financial aid are raised over and above the MFF ceilings by a decision of the budget authority within a maximum annual allocation of EUR 500 million (2011 prices).
The decision to express the maximum annual allocation of the Fund in 2011 prices (instead of current prices) is mirrored in the proposal by applying the same basis to the amount of EUR 3 billion which is one of the two damage threshold for defining major disasters. The other threshold defined as 0.6% of gross national income is not affected.
In cases where an advance has been paid its amount will be taken into account when the final contribution from the Fund is paid out.