The Committee on Regional Development adopted the report by Rosa ESTARÀS FERRAGUT (EPP, ES) on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund.

The committee recommended that the position adopted by the European Parliament at first reading under the ordinary legislative procedure should amend the Commission’s proposal as follows:

Definitions: Members defined:

• a 'major natural disaster' as one that causes serious damage and/or involves severe disruption of normal living conditions in a given geographic area, whether caused by natural phenomena or the accidental catastrophic effects of human action, and which requires special attention from public authorities and other humanitarian or social service organisations;
• a regional natural disaster resulting in direct damage in excess of 1% of the region's gross domestic product (GDP) in a region at NUTS 2 level, or in several neighbouring NUTS 3 level regions that together constitute a territory corresponding to the minimum criteria for NUTS 2 level, of a Member State or a country involved in accession negotiations with the Union. Where the disaster concerns several regions that may request assistance from the Fund at NUTS 2 level, or at NUTS 3 level when they constitute a territory equivalent to a NUTS 2 unit, the threshold shall be applied to the weighted average GDP of those regions. The particular situation of remote isolated regions, such as the insular and outermost regions, where there is a direct impact on a whole sector of activity or category of infrastructure shall also be considered when assessing the damage.

Certain types of natural disaster, that develop over a longer period of time before their disastrous effects become catastrophic, should be eligible for assistance from the Fund.

Provisions of the future Regulation should allow for enough flexibility in defining natural disasters.

Restoring the working order: Members stipulated that restoring the working order of should mean returning to the original condition, where appropriate, or restoration in a form which can improve the capacity to withstand future natural disasters, including the relocation of infrastructure projects which are clearly situated in a place that could be threatened again by a natural disaster.

Members suggested provisions to restore safe conditions for airport and port facilities, safe havens and marinas, and measures to protect coastal heritage, as well as creating safe conditions in coastal areas.

Eligibility of technical assistance: contrary to the Commission proposal, technical assistance, including management, monitoring, information and communication, complaint resolution, and control and audit, may be eligible for a contribution from the Fund, provided it is essential for carrying out rehabilitation work and does not exceed 2% of the total amount of the contribution.

Application deadline: Members requested that the as soon as possible, and no later than 15 weeks (compared to 10 weeks), after the first occurrence of damage as a consequence of a natural disaster, a State may submit an application for a contribution from the Fund to the Commission.

On the basis of the information received by the Member States concerned, the Commission should assess whether the conditions for mobilising the Fund are met and shall determine the amount of any possible contribution from the Fund as quickly as possible and no later than 6 weeks after receipt of the application, counting from the date of receipt of the complete application.

The contribution from the Fund should be used within 18 months from the date on which the Commission has disbursed the full amount of the assistance (as opposed to 1 year).

Amount of the advance: Members considered that the amount of the advance should not exceed 15% of the amount of the contribution anticipated (instead of 10%) and should in no case exceed EUR 40 million (as opposed to EUR 30 million set out in the proposal).

Implementation report: lastly, Members called for the implementation report of the Funds to report on experience gained from the disaster and the measures taken or proposed to ensure environmental protection and resilience in relation to climate change and disasters.

PURPOSE: to amend Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund with a view to simplifying its functioning and making it more visible to citizens.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: 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.

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.

IMPACT ASSESSMENT: no impact assessment was undertaken. However, The 2011 Communication served as a basis for discussions with the Member States and the European Parliament and other stakeholders.

LEGAL BASIS: the third subparagraph of Article 175 and Article 212(2) of the Treaty on the Functioning of the European Union.

CONTENT: 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:

Scope: a clearer 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.

Exceptional mobilisation: 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 has been introduced. 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.

Advanced payments: 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 commitments 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 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.

Starting dates: the proposal includes 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.

Disaster prevention: provisions are included to encourage 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.

Awarding aid: it is proposed to merge 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.

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,
• a provision on the use of the Euro and its conversion into national currencies.

Further modifications: 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.

BUDGETARY IMPLICATIONS: the EUSF is not budgeted. Actual spending will depend on applications for aid submitted by eligible States following the (unpredictable) occurrence of natural disasters and the maximum amount of annual allocation available to the Fund as decided in the IIA. 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.

PURPOSE: to amend Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund with a view to simplifying its functioning and making it more visible to citizens.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: 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.

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.

IMPACT ASSESSMENT: no impact assessment was undertaken. However, The 2011 Communication served as a basis for discussions with the Member States and the European Parliament and other stakeholders.

LEGAL BASIS: the third subparagraph of Article 175 and Article 212(2) of the Treaty on the Functioning of the European Union.

CONTENT: 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:

Scope: a clearer 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.

Exceptional mobilisation: 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 has been introduced. 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.

Advanced payments: 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 commitments 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 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.

Starting dates: the proposal includes 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.

Disaster prevention: provisions are included to encourage 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.

Awarding aid: it is proposed to merge 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.

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,
• a provision on the use of the Euro and its conversion into national currencies.

Further modifications: 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.

BUDGETARY IMPLICATIONS: the EUSF is not budgeted. Actual spending will depend on applications for aid submitted by eligible States following the (unpredictable) occurrence of natural disasters and the maximum amount of annual allocation available to the Fund as decided in the IIA. 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.