# EUR-Lex - 52012DC0287 - EN

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# 52012DC0287

**COMMUNICATION FROM THE COMMISSION The outermost regions of the European Union: towards a partnership for smart, sustainable and inclusive growth /* COM/2012/0287 final */**

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COMMUNICATION FROM THE COMMISSION

The outermost regions of the European
Union: towards a partnership for smart, sustainable and inclusive growth

1........... Introduction. 4

2........... Developments in the
European Strategy for the outermost regions. 4

3........... Axes of the renewed EU
Strategy. 6

4........... Proposals for the
future. 6

4.1........ Internal dimension. 6

1) Cohesion policy. 6

2) Traditional sectors. 6

3) Emerging sectors. 6

4) Developing entrepreneurship. 6

5) Integration in the single market 6

6) Protecting the outermost regions'
environment 6

4.2. ...... External dimension. 6

5........... Conclusion. 6

1.       Introduction

The present
Communication sets out how the Commission plans to work in partnership with the
outermost regions[1]
(OR) for smart, sustainable and inclusive growth. The Council [2] has stressed that the Europe
2020 Strategy with its three main priorities, namely, developing an economy
based on knowledge and innovation, promoting a more resource efficient, greener
and more competitive economy and fostering a high-employment economy, and delivering
social and territorial cohesion, should be fully applied in the outermost
regions taking into account their special characteristics and constraints. The
Council recognised "the need for a balance between measures to offset the
specific and permanent constraints of the outermost regions on one hand and
those that aim to promote their advantages and opportunities on the
other".

The aim is to help
the OR become more self-reliant, economically more robust and better able to
create sustainable jobs, by capitalising on the unique assets they possess and
their added value for the EU. As recognised in Article 349 of the TFEU,
important constraints will always remain, such as remoteness from continental Europe. However a concerted effort to reform, modernise and diversify their economies - which
have been heavily affected by the global economic and financial crisis - will
be the best way to ensure a more prosperous future for the OR.

Each OR is
different and distinctive ways forward need to be designed for each one.  The renewed strategy set out here outlines opportunities for
all outermost regions, but each region will need to design its own path to
greater prosperity, according to its specific characteristics.

While some
specific OR support instruments have shown their value, OR are sometimes best
supported by adaptations of EU rules or by taking into account their specific
needs at the moment of implementation. This strategy seeks to demonstrate how
the OR can find their place in the many initiatives that are supporting
delivery of Europe 2020, with much more comprehensive attention to the
situation of the OR across the European policy spectrum than seen in the past.

Unique assets
and added value

Any strategy for
the OR must recognise their value for the EU as a whole. Their geostrategic locations
mean they serve as ambassadors for the EU in the Atlantic, the Caribbean and
the Indian Ocean, with the potential to benefit the EU through their relations
with their neighbours and to spread EU influence in their regions.   Despite
their handicaps, the OR possess many potential drivers of growth based on their
specific characteristics. They account for over half of the exclusive economic
zone (EEZ) of the EU, with a potential reserve of marine resources measuring
close to 15 million km2. This represents a unique deep-sea laboratory for EU
exploration in fields such as food security, climate action, energy and
biotechnology. It is also an asset in terms of tourism based on an exceptional
natural and cultural environment. Their locations create major opportunities for
development of space, astrophysics and satellite activities for the EU. The OR
host a unique diversity of species and ecosystems of crucial importance for
biodiversity at a global scale. The OR, together with the overseas countries
and territories, have more endemic animal and plant species than continental
Europe as a whole, including more than 20% of the world's coral reefs and
lagoons. Their biodiversity offers potential in the areas of health, bio-medicine
and bio-pharmacy, cosmetics and many other sectors such as materials for
eco-construction and wood. The conditions exist in different regions to develop
renewable sources of energy from bio-fuels to wind, solar, geothermal or
photovoltaic. In terms of human capital, the OR have a better educated and
skilled workforce, public services, and more advanced know-how than their
neighbours giving them the possibility to sell services and expertise in high
added value sectors.

The principles
underpinning the proposed partnership for growth are to:

-           support the OR in exploiting all
opportunities for smart, sustainable and inclusive growth based on their assets
and endogenous potential;

-           ensure that European policy frameworks
contribute to reducing obstacles specific to the OR' full integration into the
single market; and

-           increase recognition of the OR as an
asset to all, and of the need to take their specificities and constraints into
account.

Action to
support the OR requires partnership between EU, national and regional
authorities. Strong commitment to action is required at all these levels. The
OR themselves have a responsibility to seize the opportunities available to
them.

2.           Developments
in the European Strategy for the outermost regions

Since 1999, the
EU has formally recognised the geographical and economic specificity of the OR: remoteness, insularity, small size, topography,
climate, and economic dependence on a small number of products, which severely
restrain development (Article 349 TFEU), and make it difficult for the OR to
reap the benefits of the single market.

Since 2004, the
Commission has set OR-related actions within a framework based on three axes[3]:  improving accessibility; improving
competitiveness; and promoting regional integration in neighbouring regions. Since
2008[4], it has focused on making the
most of the OR' unique assets.

The OR
themselves[5], supported by their respective Member States[6], as
well as the Council and the European Parliament[7] have
contributed to reflection on how to improve economic performance. In 2011 Pedro
Solbes delivered a report entitled "Europe's Outermost Regions and the
single market: the EU's influence in the world"[8], which underlines the need for a better
integration of the OR both in a deepened and consolidated single market and in
their immediate neighbourhood, building in particular on the external dimension
of the single market.

A study entitled
"Growth Factors in the OR"[9]
launched by the Commission recognized the OR' structural constraints, but
underlined the opportunities for economic growth. The study also pointed to the
differences among the OR and to the need for different measures adapted to address
the particular challenges each OR faces. It concluded that to strengthen
traditional sectors like agriculture, greater product differentiation and
specialisation is essential. Sustainable tourism has significant potential in
most OR.   The study identified emerging sectors based on the OR' assets including 
biodiversity and marine ecosystems, potential for producing renewable energy,
advanced agro-environmental or climate research, astrophysics and aerospace
science.

Another study
"Demographic and migration trends in the OR: impact on economic, social
and territorial cohesion"[10] also stresses the ORs' potential but points to challenges in
meeting educational, employment and environmental goals.

The EU's renewed
strategy for the OR should build on these elements.

3.           Axes
of the renewed EU Strategy

While the
existing framework for policy towards the OR remains valid, it needs to be updated
and adapted in the light of Europe 2020. This means greater emphasis on
creating jobs and growth, and a comprehensive approach to climate action. The
axes are the following:

I.          Improving accessibility to the
single market. Accessibility means transport, but also transfer of knowledge
and the implementation, at reasonable cost, of new technologies for information
and communication.

II.         Increasing competitiveness through
modernisation and diversification of OR economies, investment and innovation in
sectors of high growth potential and/or of high added value (traditional and
emerging ones), affordable and sustainable energy supply as well as and support
to development of the private sector (mainly, SMEs and micro enterprises), and
to innovation in new products and services.

III.       Strengthening regional integration within
the ORs' respective geographic zones to expand the EU's sphere of
socio-economic and cultural influence through the OR and to foster greater
trade and sharing of knowledge. The OR are outposts of the EU in their
respective regions, and the EU benefits from their close relations with the overseas
countries and territories[11],
third countries such as key emerging nations (i.e. Brazil or South Africa),
developing countries as well as developed countries with which they share historical
and cultural links.

IV.       Reinforcing the social dimension of
the OR development, including through measures for employment creation, enhancing
skills and educational attainment, reducing early school leaving, increasing the
number of tertiary education graduates, fighting poverty, improving access to
healthcare and improving social inclusion.

V.        Mainstreaming climate change action
into all relevant policies. Appropriate action will be taken for adaptation and
mitigation measures.

The proposals for
the future in the next section each have a positive impact on the above axes.

4.           Proposals
for the future

The measures
outlined in this communication need to be delivered in partnership. The Member
States and regional authorities concerned should maintain strong commitment to
maximising the potential of each outermost region and ensure that national
rules and practices are adapted where necessary to reflect the OR' needs. The
OR themselves should continue to develop their capacity to participate in
competitive tenders under EU programmes.

In line with the
Council conclusions of June 2010, the Commission will ensure that, where
appropriate, the OR dimension is taken into account in impact assessments and
other preparations for new policy initiatives.

The Commission will reinforce the visibility of
the OR in its communication policy, and will continue exchanges and temporary
secondment of officials between the OR and the European institutions.

4.1.        Internal
dimension

1) Cohesion
policy

Cohesion
policy is the principal EU instrument to deliver
Europe 2020, providing the greatest concentration of EU investment funds to
create jobs and growth. In the OR, cohesion policy will support investments in
smart, sustainable and inclusive growth. The emphasis will be on investment to permanently
reduce disparities with the rest of the EU. The thematic concentration of funds
foreseen in the proposed reform of cohesion policy will help in particular to
ensure significant funding is available to support innovation in its widest
sense; to promote modernisation and diversification of the economies; to
address key human capital investment needs; to strengthen the SME sector to create
and maintain jobs; to support climate change adaptation and mitigation and the
development of sustainable energy supplies.

The Commission
proposes to continue to offer specific treatment for the OR to help them make
the best use of the investment funds available. A co-financing rate of 85% is
proposed regardless of the OR' GDP. A specific allocation is proposed to offset
the additional costs of OR handicaps and to diversify and modernise their
economies.

The Commission will
assess whether each OR's individual needs and assets are appropriately
reflected in the partnership agreements which will be agreed between the
Commission and each Member State for the next financial period.

Each OR will be
required to analyse its potential and ensure a critical mass of the ERDF is
allocated to research and innovation, to promote new opportunities for
employment and enterprise inter alia to reduce the risk of brain drain, as well
as  to energy efficiency and to renewable energies. Member States should ensure
that OR representatives are fully involved in the preparation and monitoring of
the agreement.

To improve
access to finance for micro to medium-sized enterprises, the OR will be
encouraged to allocate appropriate funding to the
financial instruments under cohesion policy and to make use of the financial
and non-financial products available under initiatives such as JEREMIE or
JASMINE, to develop the potential of micro-credit in their territories.

The Smart
Specialisation Platform[12]
helps Member States and regions prepare their innovation strategies for
cohesion policy funding. It offers the OR an opportunity to make the most of
their unique assets in science and technology, contributing to, and benefiting
from, new opportunities in the European Research Area (ERA). Such projects and
innovation strategies should fully exploit synergies between Horizon 2020 and
the new cohesion policy. Projects financed through research framework
programmes and cohesion policy funds can play a major role in attracting and
training scientists and integrating the OR fully into the ERA, including
important spill-over effects in the local and regional economies.

Under Commission
proposals, the European Social Fund (ESF) will also continue to support the OR,
which include regions with the highest levels of unemployment in the EU. Comprehensive
investments are needed to foster market participation and labour mobility (both
national and transnational), and boost education, skills and lifelong learning,
in particular with a view to reducing early school-leaving and to increasing
attainment levels in tertiary education. The ESF will also help the OR to
facilitate adaptation of workers and enterprises to change, improve
productivity, ensure good integration of young people into the labour market,
strengthen social inclusion and enhance institutional capacity. The OR should  take
advantage of the proposed EU Programme for Social Change and Innovation,
including PROGRESS, EURES and the European Progress Microfinance Facility.

The Commission
has proposed that territorial cooperation financed under the ERDF[13] involving the OR should be
reinforced to improve competitiveness, trade and knowledge links with neighbours. 
Under this proposal the OR should receive not less than 150% of the ERDF
support they receive in the current period plus an additional allocation of EUR
50 million. The total amount that may be allocated to OR operations outside the
EU should increase from 10% to 30% facilitating projects with neighbouring
countries and territories. The Commission underlines the opportunities offered
by current arrangements for transnational co-operation, but would be open to
facilitate OR cross border cooperation on maritime borders across distances
greater than 150km.

2) Traditional
sectors

Growth Factors Study: "Production and employment ... can only be strengthened through product differentiation and specialisation" "Areas of specialisation such as eco, environmental, social, cultural and [wellness] tourism are still not fully exploited"

Agriculture
and rural development. The POSEI ("Programme
of Options Specifically Relating to Remoteness and Insularity") agricultural
support scheme is an instrument developed for the OR. With its two sections,
specific supply arrangements and support to the local agricultural production,
the Member States have substantial flexibility to target expenditure, including
for actions for diversification of production. The report on the impact of the
POSEI reform of 2006 confirms the suitability of this scheme to the needs of
the OR and that the allocated resources have enabled the objectives of the
programme to be met. The Commission proposes to maintain the scheme with some
adaptations, with the possibility of further review in 2013. In the context of
such a possible review of the POSEI scheme, the significance of new areas of
activity, such as timber production in French Guiana, will be analysed.

Under the
Commission's proposals, the OR will also continue to enjoy specific treatment under
the European Agricultural Fund for Rural Development (EAFRD)[14]to support improvements in
competitiveness, diversification of activities in rural areas,  sustainable
management of natural resources and a balanced territorial development of rural
areas.

Fisheries. The Commission’s proposals for reform of the
Common Fisheries Policy have foreseen that fish stock management and decision
making would have a more regionalised character, addressing sea basins and
taking account of the local stocks. In the framework of this regionalized
approach, the Commission is discussing with the European Parliament and the Council
how to ensure that stakeholders in the OR can become an effective part of the consultation process and the design of conservation measures, including
by creating a dedicated Advisory Council for the OR to
take better account of their specific context.

Furthermore the local
fishing industries in the OR should receive responsibility to manage fisheries
and work out a marketing plan to increase the value added of their products. The OR could take up a number of measures in the European
Maritime and Fisheries Fund (EMFF) proposals which are of particular interest to
them, such as actions supporting sustainable local development of fisheries
areas or support for small scale coastal fleet, including business and
marketing strategy advisory services or facility studies for innovative
approaches. Support for aquaculture enterprises and processing enterprises
could also represent an important source of funding for potential beneficiaries
in the OR and help create new job possibilities there in these businesses.

On the funding side, the proposed EMFF takes into account the
specificities of the OR by offering additional financial support in the form of
increased aid intensity for EMFF investments in these regions. The proposed
EMFF also foresees the integration of the compensation mechanism, the so-called
"fisheries POSEI", so that the OR would continue to receive support[15].

In addition, and following the existing model for the Azores,
Madeira and the Canary Islands, the Commission is discussing with the European
Parliament and the Council the establishment of an exclusive access zone which could
be envisaged for the French OR.

Tourism is an established area of activity in some OR, but there is still significant
potential for further growth according to the Growth Factors study. The OR are
invited to redouble efforts to implement the actions described in the
Communication "Europe, the world's N°1 tourist destination" (June
2010) to make tourism sustainable and allow growth, through specialisation.
Efficiency should be raised through increased use of ICT and enhancing quality,
skills and competence. The new cohesion policy programmes will be a source of
finance for investment in tourism.

Cultural and
natural heritage are an important resource for tourism-oriented development in
OR. The EU will promote measures contributing to protection, sustainable use
and added value of cultural and natural heritage, including biodiversity, and
access to it for tourism purposes in the OR.

The Commission
will seek to ensure access of the OR to the Union's future cultural policy
programmes and initiatives in order to develop cultural and creative
industries.

3) Emerging sectors

Growth Factors Study: "[Need to strike the right] balance between a radical improvement of the traditional sectors and the creation of a sufficient space of growth for the new products and sectors" "The mix of endogenous resources, new technologies and the way that factors are organised may give rise to a competitive advantage" "Policies need to focus and concentrate human and material resources, make them more market oriented, rather than disperse them in too many potential fields"

Research and innovation. The participation of the OR in RTD networks
will be key to delivering "smart" growth in the OR. There are already
many examples of good practice, although a lack of research critical mass remains
a challenge. The proposed "Horizon 2020" will nurture scientific
excellence in the OR, support technological as well as practice-based
innovation and stimulate private sector investment in experimentation, including in agriculture and
endemic biodiversity. The aim will be to get stakeholders from a wide diversity
of fields involved in encouraging innovation that may lead to new products or
applications in traditional sectors, or open up new areas of economic activity,
creating employment.

Sustainable Energy. The EU will support current and new actions designed to reduce dependence
on energy imports and on fossil fuels in the OR and to develop renewable energy
sources through the structural funds and initiatives such as the "Pact of
Islands". The objective will be to enhance self-sufficiency in energy, and
support the creation of centres of excellence which would contribute to achieving
a reduction in CO2 emissions of at least 20 % by 2020.

Following  suggestions made by the European
Parliament in the field of energy, the Commission will examine with the OR and
their Member States how funding for renewable energy and energy efficiency
under the cohesion policy funds can best be deployed to meet the specific needs
and capacities of the OR.

Maritime opportunities.
In view of developments in the Integrated Maritime
Policy of the European Union[16],
EU funds in the 2014-2020 period under the common strategic framework or other
relevant horizontal programmes can be devoted to investments in the maritime
and marine economy in the OR. In this respect, the Macaronesian and Caribbean OR
should seize the opportunities offered under the EU Atlantic Strategy[17].

In the field of knowledge networks, the
Commission intends to roll-out the European Marine Observation and Data Network
(EMODNet) programme after 2012 to the OR. The
Commission will continue to take account of the OR dimension in the implementation
of the Union's integrated maritime policy, including the Blue Growth initiative[18].

4) Developing
entrepreneurship

Small and
Medium-sized Enterprises are important for the
relatively small-scale economies of the OR. A key problem is accessing finance
for business development. The Commission will take account of the
particular situation of the OR when implementing the Action Plan to improve access to finance for SMEs[19] and the Microfinance
and Social Entrepreneurship support axis[20]of
the Programme for social change and innovation.  In addition to what may be done with ERDF initiatives
such as JEREMIE, the Commission, together with the EIB group, will
work with the Member States and the OR  to support the creation of local
investment funds in each OR and the development of regional capital/investments
markets.

Social
entrepreneurship. Social enterprises are important
drivers of inclusive growth and development. The OR should examine their
options under the new Social Business Initiative (SBI), adopted in October
2011, which aims to create a favourable environment for companies whose first
ambition is to tackle social needs, setting out a comprehensive action plan to
enhance the visibility of social businesses and their access to financing.
Dedicated investment priorities have been proposed in this context under the
ERDF and ESF regulations for 2014-20.

5) Integration
in the single market

The Single
Market Act[21]
has underlined the importance of the single market as a competitiveness
platform for the OR. A second chapter of the Single Market Act is to be adopted
in autumn 2012. Wherever it is relevant, the specific situation of the OR will
be taken into account to enable their full integration in the single market.

The first
obstacle to such integration is the OR' remoteness. The EU will take into
account the OR dimension in the implementation and development of the trans-European
networks in the fields of transport[22],
telecommunications and energy. In these three fields, the OR will be included
in projects of common interest[23]
where appropriate and in line with the policy objectives and criteria, as set
out in the sectoral Guidelines once adopted. The proposed Connecting Europe
Facility (CEF) will also follow this approach when identifying those projects of common interest eligible for funding. More specifically, in the field of
transport, projects of common interest involving OR and focused on Motorways of
the Sea would be eligible for financial support from the proposed CEF.

Following suggestions made by the
European Parliament in the field of transport, the
Commission will examine with the OR and their Member States how the
opportunities under the cohesion policy funds can best be used in each case.

Eliminating the
digital divide and increasing OR access to the digital single market will be
important. In order to create a
well-functioning and effective digital single market, the OR dimension
will be taken into account explicitly in all forthcoming regulatory proposals on
the European digital single market.

State aid rules are key to avoiding distortions of competition in the single
market. Article 107(3)(a) of the TFEU explicitly recognises the OR as regions
where aid can be granted to promote economic development in view of their
structural, economic and social situation. In this context, the regional aid
guidelines will maintain preferential treatment for the OR. In addition, special rules for the OR
in the agricultural, fisheries and the aquaculture sectors will be maintained.

Public
procurement rules based on fair and open calls for
tender are a pillar of the single market. The Commission will explore the possibility of reflecting the OR
dimension in the implementation phase of its proposals for the reform of EU procurement
rules once they are adopted. To determine whether public contracts not or not
fully subject to EU procurement rules are subject to EU Treaty rules and
principles, an OR dimension has already some relevance[24]. The current situation
however should be further clarified. Contracting authorities in the OR may require the hiring
of local labour by the enterprises to which a public contract has been awarded,
as long as there is no direct or indirect discrimination regarding the freedom
of establishment and freedom to
provide services[25] and conflicts of interests are
prevented and avoided.

Taxation and Customs. Specific regimes have
contributed to increasing the competitiveness of the OR. The Commission will
examine requests and justifications from the Member States concerned for prolongation or modifications of
these regimes and will bring forward proposals accordingly, taking into account the effects of these regimes on the
local economy and on the internal market. Principles of good governance in the
tax area (transparency, exchange of information and fair tax competition) should prevail as in any other parts of the Union.

Better
information. ‘Single Market’ contact points will be
set up in each OR, with specific training measures for enterprises and public
officials in the OR providing more information about the possibilities on offer.
More use will also be made of the IMI and SOLVIT platforms.

Education and
skills.  The proposed programme "Erasmus for
All"[26]
will provide opportunities to support partnerships between business and
education and training institutions (i.e. universities, vocational training
institutions) of the OR and facilitate and promote the mobility of student and
teachers to and from the OR. Modernisation of education and training systems as
well as measures for improving the accessibility of good-quality education can
be financed from the ESF.

On consumer policy, the Commission will
take into account when appropriate the OR dimension in implementation of its
new European Consumer Agenda. Issues of interest for OR consumers relate in
particular to sectors such as travel, telecommunications and energy.

Health is important given the inequalities in life expectancy and
health status between OR and the continent. Cohesion policy offers
opportunities to invest in health infrastructure – including telemedicine and
in the training of health professionals in their OR.

6) Protecting
the outermost regions' environment

EU civil protection policy supports measures to
minimise the ORs' particular vulnerability to natural disasters helping to
create the conditions for more sustainable growth. The geography and the
difficult topography of the OR hamper the deployment of intervention resources
and create particular needs for assistance in the event of a major emergency. The
Community Civil Protection Mechanism Decision and the Civil Protection
Financial Instrument Decision[27]
make reference to the special needs of the OR and take them into account in the
implementation of EU CP Mechanism-related actions. The Proposal on a Union
Civil Protection Mechanism[28]
reiterates this support.

Climate action. The EU will take action both in the fields of climate
change mitigation and adaptation[29].
ORs' resilience to climate change impacts has to be increased by supporting
climate change adaptation in all relevant sectors, and promoting
a greener, low-carbon economy, the improvement of energy and resource efficiency
as well as sustainability of transport and agriculture. Coastal protection is a particular concern for the OR.  The results of a
study ordered by the Commission on the impact of climate change in the OR will
be published in 2013.

Biodiversity
and ecosystem services. Efforts will be strengthened
to support biodiversity and ecosystem services in the OR, building upon
initiatives such as BEST (voluntary scheme for Biodiversity and Ecosystem
Services in Territories of the OR and OCTs), which helps to deliver on all
relevant targets and actions of the EU Biodiversity Strategy. Activities in this area can be financed by the structural
funds.

4.2.        External
dimension

Given the OR' geographical
position, EU policies with an external dimension are key to this strategy. To develop
their own potential, and bring their full added value to the EU, the OR need to
better integrate not only within the single market, but within their own regional
neighbourhoods. Regional neighbourhood plans should be established, consistent
with EU external policy objectives. Coordination and complementarity of actions
by EU authorities will be improved, particularly more will be done to improve
co-ordination and synergy between the cooperation programmes supported by the
ERDF and other instruments, chiefly the European Development Fund, but also the
Development Cooperation Instrument (DCI) and Partnership Instrument (PI). The
external dimension of the single market for OR will need to be strengthened
too, building on the work done in the context of the Single Market Act.

Cooperation between the OR and their neighbours will be pursued in
the interests of all sides, and with a particular focus on boosting economic
opportunities.  Cooperation can be encouraged through better
exploitation of ad hoc provisions contained in EU agreements with third
countries[30],
or by making better use of programmes such as Erasmus Mundus in education, where
OR universities are potential leaders in training
activities. The OR have the potential to become business and cooperation
platforms and logistical hubs.

Trade and
fisheries agreements. EU agreements will
take due account of the OR, for example, where agreements cover products
produced in the OR. This can help OR producers compete not only in the EU, but
also in third country markets. The practice of accompanying proposals for trade
agreements, such as the Economic Partnership Agreements, with impact analyses,
is now well-established and should where relevant address the OR dimension. The
inclusion of specific safeguard clauses for the OR are important, but information
should be improved to ensure that such clauses are fully used if need be.

New or more
efficient air and maritime routes between the OR and their neighbours. The Commission will reflect on how the specificities of the OR
might be taken into account as it prepares for the revision of the 1994 and
2005 Aviation Guidelines[31]
and the review of the 2004 Maritime Guidelines[32].
The Commission will assess requests from Member States to conclude bilateral
agreements with third countries neighbouring OR, establishing service
requirements on passenger transport similar to public service obligations
contracts under EU law. This could only be envisaged when market conditions
alone are not enough to attract economic operators, without any discrimination
among the latter and in respect of the existing bilateral and multilateral
agreements and relevant state aid rules. The
EU will also consider the conclusion of agreements with countries neighbouring
the OR to liberalise transport and increase connections.

Energy. The EU will support projects to create more effective energy markets
encompassing the OR and neighbouring countries and territories.

Electronic
communications networks. Improving the reliability
of network infrastructure will be a top priority. Current digital networks that
rely on a single low-capacity undersea cable connection do not guarantee
service continuity, and are unable to deliver constantly increasing speeds. Issues
concerning access, tariffs, quality and security of ICT services need to be
addressed more resolutely, particularly to create the conditions for
‘high-speed’ internet. The national competition authorities have a key role to
play in determining the conditions for acquiring capacity through undersea
cables and the conditions for access to the terrestrial parts of these cables.

SMEs operating
internationally. The Commission will take
particular account of the OR when carrying out the actions referred to in its
communication ‘Small Business, Big World"[33].

Business-to-business
alternative dispute instruments. Confidence
building between businesses located in OR's and in their third country
neighbours is one of the first concrete steps needed to unlock trading flows
within regional ensembles. To achieve this, the establishment of
business-to-business alternative dispute settlement systems between the OR, the
OCTs and neighbouring third countries should be encouraged through the
approximation of the legal systems involved.

Mobility. The Member States should step up efforts to facilitate the mobility
of key groups of third country nationals such as students, researchers and the business
community, while continuing efforts to reduce irregular immigration and address
trafficking in human beings.

5.           Conclusion

Much has been
achieved in the OR but their economies remain relatively fragile. Efforts to
mitigate their permanent constraints and to ensure their full integration into
the single market and into their respective neighbourhood need to be maintained
and consolidated by actors at all levels. Their specificities should be taken
into account in the new generation of policies implementing Europe 2020, and
they and their respective Member States should do all they can to ensure they
seize the opportunities that exist. Potential growth in the OR can come from
restructuring the traditional sectors of tourism, agriculture and fishery, and
new specializations which stem from the application of RTDI to old and new
sectors.

Modernising
traditional sectors and diversifying into well-chosen new areas of activity
will be key to the future prosperity of the OR.  The Commission will support
each OR in tracing its own individual path to diversification and modernisation
of its economy, with a view to creating more robust economic conditions and
reducing disparities with other EU regions. Each OR together with their
respective Member State is invited to draw up an Action Plan setting out, with
targets and milestones, how they intend to implement the Europe 2020 agenda
taking account of their individual situations, and the different instruments available
set out in this communication.

The Commission
will pursue efforts to strengthen the integration of the OR in the single
market and in their geographical environment at regular meetings of a dedicated
interservice group. By the end of 2017 at the latest, the Commission will
review implementation of each of the measures proposed in this communication.

[1]               According to Articles 349 and 355(1) of the Treaty on
the Functioning of the European Union (TFEU), as modified by the European
Council Decision of 29.10.2010  amending the status of Saint-Barthélemy, there
are eight "outermost regions" of the EU: the four French overseas
departments and regions (Guadeloupe, French Guiana, Martinique, Réunion) and one
overseas collectivity (Saint Martin); the two Portuguese autonomous regions
(the Azores and Madeira); one Spanish Autonomous Community (the Canary
Islands). Under Art. 355(6) TFEU, France has made a formal request to the
European Council to change the EU status of Mayotte, currently among the
overseas countries and territories, to become an OR from January 2014.

[2]
                     3023rd FOREIGN AFFAIRS
Council meeting, 14 June 2010.

[3]               COM(2004) 343, 26.5.2004; COM(2004) 543, 6.8.2004

[4]               Communication from the Commission: The outermost
regions: an asset for Europe (COM (2008) 642 final, 17.10.2008).

[5]               Joint Memorandum, of the
Outermost Regions: From now until 2020, 14th October 2009.

[6]               Memorandum, of Spain, France, Portugal and the Outermost Regions: A renewed vision of the European Strategy for outermost
regions, 7 May 2010.

[7]               Report of the European Parliament on “The role of
Cohesion Policy in the outermost regions of the European Union in the context
of EU 2020", 18 April 2012 (rapporteur Nuno Teixeira)

[8]           Commissioner
Barnier asked former Minister of Agriculture and of Economy and Finance of
Spain and former European Commissioner, Pedro Solbes Mira, to  undertake a
study on the place of the OR within the single market

http://ec.europa.eu/internal_market/outermost_regions/index_en.htm

[9]         Carried out by Ismeri Europa, commissioned by the
Commission in 2009, delivered in March 2011

[10]             Carried out by the "Institut National d'Études
Démographiques" (INED), commissioned by the Commission, and delivered in
May 2012.

[11]             Overseas countries and territories referred to in Articles
198 and 355(2) of the TFEU. Special attention shall be given to the future
Council Decision on the Association of the Overseas Countries and Territories
with the EU and in particular its provisions relating to the regional
cooperation and integration of these territories.

[12]             http://s3platform.jrc.ec.europa.eu/home

[13]             COM(2011) 611 final, 6.10.2011

[14]             COM(2011) 627 final/2, 19.10.2011

[15]             COM(2011) 804 final, 2.12.2011.

[16]             COM(2007) 575 final, 10.10.2007

[17]             COM(2011) 782 final, 21.11.2011.

[18]             Council Conclusions  19.12..2011, point 12.

[19]             COM(2011)
870 final, 7.12.2011; and SEC (2011) 1527 final.

[20]             COM(2011) 609 final, 6.10.2011. The implementation of
these measures may be done through financial instruments, with take-up of
funding depending, inter alia, on the conditions of, and awareness about the
instruments, as well as demand from the micro credit providers.

[21]             COM(2011) 206 final, 13.4.2011: "[We need a] better integrated market
which fully plays its role as a platform on which to build European competitiveness
for its peoples, businesses and regions, including the remotest and least
developed".

[22]             COM(2011) 650 final/3, 6.02.2012, Art. 4(2)(j)

[23]             See below the External Dimension

[24]             Given
that geographic location and the size and structure of the market are criteria determining
whether a contract award is of interest to operators from other Member States -
see C179, 01.08.2006: Point 1.3 in Commission interpretative
Communication on the EU law applicable to contract award not or not fully
subject to the provision of the Public Procurement Directives.

[25]        Judgement of the Court in Case 31/87 Beentjes
[1988] ECR 4635.

[26]             COM(2011) 788 final,  23.11.2011.

[27]          Council Decision
2007/162/EC of 5 March 2007; Council Decision 2007/779/EC of 8 November 2007.

[28]             COM(2011) 934 final, 20.12.2011

[29]             White Paper "Adapting to climate change: towards a
European framework for action", COM(2009) 147 final, 1.4.2009

[30]             For example, Art. 132(h) and Art 239 of the EPA
EU/CARIFORUM.

[31]             Community guidelines on financing of airports and
start-up aid to airlines departing from regional airports, OJ C 312, 9.12.2005,
p. 1.

[32]             Community guidelines on State aid to maritime
transport, OJ C 013, 17.01.2004, p.3

[33]             COM (2011)
702, 9.11.2011.