EN Official Journal of the European Union C 161/52

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission — The outermost regions of the European Union: towards a partnership for smart, sustainable and inclusive growth’

COM(2012) 287 final

2013/C 161/09

Rapporteur: Mr MALOSSE

On 20 June 2012 the Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

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

COM(2012) 287 final.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 4 March 2013.

At its 488th plenary session, held on 20 and 21 March 2013 (meeting of 20 March), the European Economic and Social Committee adopted the following opinion by 165 votes to 2 with 6 abstentions.

1. Conclusions and recommendations – the ORs as outposts of Europe

1.1 The EU's current priority in relation to the outermost regions (ORs) must be to strengthen the links that connect them with mainland Europe and their citizens' sense of belonging to the European project. The ORs can serve as laboratories, testing grounds and even models for Europe in certain areas, such as biodiversity, earth observation, renewable energies and cultural integration.

1.2 The ORs have considerable assets with which they can contribute to the future of Europe. These include the talents of their men and women, their agricultural, fisheries and industrial products, their high-quality tourism and their geographical role as outposts of Europe in their neighbourhoods. The ORs must have access to all the advantages of the internal market, on an equal footing with other European regions.

1.3 Despite the extremely tight budgetary situation, specific support for the ORs must not be cut. These regions must have access to appropriate financial means to allow them to achieve the objectives of the Europe 2020 strategy and to compensate for their disadvantages, particularly those linked to their remoteness.

1.4 Although European policy in favour of the ORs has delivered good results, the concept of outermost regions needs to be revitalised on the specific legal basis established in the TFEU by giving it a more strategic and ambitious dimension. The ORs can thus no longer be excluded from European policies on major networks, research, mobility and earth observation.

1.5 The POSEI instrument should be evaluated and extended to cover all the ORs' products, both agricultural and non-agricultural.

1.6 Article 349 of the Treaty on the Functioning of the European Union (TFEU) needs to be properly implemented in relation to certain European policies, such as those on competition, public procurement, fisheries and the environment, so as to take account of the ORs' specific geographical and climatic circumstances. Given the text of the Treaty, the European Commission's current silence on these issues is not really justified. The EESC calls on the European Commission to draw up and publish an analysis of the application of Article 349.

1.7 Employment and young people are vital issues for the ORs. The social dimension must be a priority in EU policies for the ORs. As a result, this angle needs to be effectively developed through the application of short, medium and long-term measures under support programmes for education and training, in line with the needs of the world of work in such regions, on the one hand, and support for job- and wealth-creating activities on the other.

1.8 Europe's competitiveness can also be improved by implementing programmes in the ORs concerning, for example, renewable energy, marine science, biodiversity studies, forestry, health and combating tropical diseases.

1.9 It is clearly necessary to try to improve the ORs' integration in their local environment. There are many examples which show that the European Commission has a general difficulty in understanding the ORs' strategic role in EU external policy as outposts of the EU, particularly in relation to trade, fisheries policy and development cooperation. Decisive, more visible and more active support from the European Commission for regional cooperation is essential.

1.10 The involvement of civil society in the EU's strategy must be more than just a slogan. The EESC proposes that round tables be organised, bringing in civil society players in each OR, to prepare the "Action Plans" setting out targets and milestones for the implementation of the Europe 2020 strategy. The EESC is willing to launch this process in partnership with the Conference of Presidents of the ORs and the ORs' Economic and Social Councils.

1.11 The EESC also supports establishing a structured dialogue between civil society in the ORs and in the countries of their respective neighbourhoods (i.e. Latin America, the Atlantic Ocean, the Caribbean or the Indian Ocean, as the case may be). That would, in particular, involve the participation of representatives of the ORs in the dialogue set up by the European Commission under the Economic Partnership Agreements (EPAs). The EESC is in favour of creating monitoring committees involving civil society under all the EPAs, and calls for the participation of the ORs in the committees that concern them.

1.12 The EESC proposes that EU offices be set up in each of the ORs, to make the links between the EU and those regions more tangible, visible and direct.

2. Introduction and general comments

2.1 Articles 349 and 355 TFEU define the outermost regions and recognise their special characteristics. Furthermore, since 1989 those regions have benefited from a specific programme to support socio-economic measures aimed at achieving greater convergence with the rest of the EU.

2.2 The ORs substantially extend the EU's territory and geographical presence in the world, thus increasing Europe's political, economic and cultural influence and adding huge fishing areas in the Atlantic and Indian oceans. Better use should be made of the ORs' position as outposts of Europe, by integrating them into the trans-European networks (such as TEN-T and the digital networks) and giving them priority access to European earth observation programmes (GMES and GALILEO) as well as to European research programmes on renewable energy and biodiversity. Mobility and cooperation programmes should also be used to develop the ORs' role as transmission mechanisms for Europe's influence in the world. The presence of EU special representatives in these regions, which is justified by their remoteness, will act as both a political signal and an effective tool to promote their role as outposts of the EU.

2.3 For more than twenty years, the EESC has also supported the efforts of civil society in the ORs to bring themselves closer to the EU and to be listened to and consulted more fully. In that respect, it is particularly worth highlighting the negative effects that its trade policy could have on the ORs, particularly as a result of free-trade agreements and EPA agreements with the ORs' neighbours (1). It is regrettable that the European Commission makes no mention of this issue in its Communication and has not taken on board the recommendations in the EESC's opinion of 17 February 2010 (rapporteur: Mr Coupeau) (2), particularly in relation to flanking measures.

2.4 Another weakness of the Communication is that there is a major political fact whose consequences it fails to address, namely that the ORs are part of the European Union. The hearing on Réunion showed that civil society is committed to European integration, which it has never called into question. In the EESC's opinion, the EU's strategy in relation to the ORs should focus on improving their integration into Europe as a whole, while taking their situation into account.

3. Specific issues

3.1 Simplification and speed in selection procedures and the allocation of funds have become a pressing need in relation to the implementation of cohesion policy. Excessive delays are often primarily the fault of the EU and the national authorities. These delays seriously harm the EU's credibility. This issue must be addressed urgently before the future financial perspectives are considered.

3.2 Another essential requirement for future EU programmes is to ensure that European support is more visible and more concentrated. The fact that funds are spread too thinly at present both contributes to inefficiency and leads to criticism. As stated in Mr Coupeau's opinion, mentioned above, the EESC recommends that the focus at this stage should be on three key priorities. The first of these is education and training to enhance the employability of young people, including support in the form of basic infrastructure, since of course the greatest wealth of these regions lies in the talent and entrepreneurial spirit of the men and women who live there. The second is support for the private sector's role of job- and wealth-creation, in areas such as SMEs/SMIs, tourism, services to the factors of production, agriculture, forestry and fisheries. The third priority is investment in major networks such as ICTs, transport, waste, water and energy, to ensure that the public has fair access to services of general economic interest that contribute to the competitiveness of these regions.

3.3 Sustainable development is a major issue, but it needs to be broadened to cover many areas other than just the environment. For example, sustainable development in relation to tourism includes respect for local identities, regional know-how, preservation of traditional ways of life, language, and typical local products. The issues of accessibility for all, demographic change and dealing with dependence are particularly important in the ORs and are not adequately developed by the European Commission in its communication.

3.4 The EESC encourages the Commission to look into the possibility of reflecting the situation of the ORs in the public procurement rules. The specific circumstances in the ORs justify taking into account not only local employment, but also the need to prevent social dumping from neighbouring countries with much lower wage costs, as well as aggressive price-cutting practices by some economic players which first eliminate all local competition and then, acting as monopolists, charge high prices.

3.5 As far as relations with neighbouring third countries are concerned, the EESC regrets that the Commission's communication lacks a clear vision such as the one proposed in Mr Coupeau's opinion. The EESC highlights the importance of cooperation between the ORs and neighbouring countries, particularly ACP countries, in the form of joint cooperation projects using EDF, ERDF, ESF, EAFRD and EMFF funds. Many studies have been carried out in this field, but in the absence of operational rules, few concrete cooperation projects have been implemented. However, there are many opportunities for cooperation in the fields of transport, tourism, education, health, fisheries and agriculture, research and development, and environmental protection. Equally, the issue in relation to the EU's trade policy has not been addressed. The current or prospective free-trade agreements and EPAs pose a genuine threat to the fragile economies of some ORs. The draft EU strategy in favour of the ORs is pointless if their very real interests in EU trade policy are not taken into account.

3.6 Finally, it is regrettable that this communication pays so little attention to creating a partnership with civil society in the ORs so as to establish structured consultation of civil society on the implementation of cohesion activities and develop projects that would help strengthen their inhabitants' sense of European identity through information campaigns, European citizenship and mobility programmes. The EESC would refer to its opinion on the European Code of Conduct on Partnership (CCP) (3).

4. Proposals for the future

4.1 POSEI (Programme of Options Specifically Relating to Remoteness and Insularity).

4.1.1 A careful assessment should be made of the way this programme is applied. Alongside the major resources lavished by the POSEI on two OR products (sugar and bananas) account should be taken of a range of other local products whose export could be promoted (e.g. vanilla, fruit and vegetables, fisheries products).

4.1.2 Funding for the POSEI agriculture programmes should not only be maintained but strengthened so that production for export as well as for the local market can continue to be developed, while at the same time guaranteeing the supply of raw materials and basic products.

4.2 Economic, social and territorial cohesion

4.2.1 The EESC welcomes the European Council's decision to continue to offer the ORs special treatment so that they can make the best use of the funds available, proposing a co-financing rate of 85 % regardless of their income levels. Nevertheless, it regrets that the co-financing rate for the specific allocation to offset the additional costs of remoteness remains set at 50 % and urges the Commission to exercise sufficient flexibility to ensure that it is fully effective.

4.2.2 Lastly, the EESC is concerned that the Commission's proposals for territorial cooperation do not offer concrete answers to the ORs' indispensable need for regional integration.

4.3 Mobility programmes: the EU needs to guarantee equal access to these employment or study programmes for citizens living in the ORs. There is a clear and unacceptable contradiction, for example, between the desire to allow young people and academics from the ORs to reap the full benefit of mobility programmes such as "Erasmus for all" and the refusal to take account of their geographical situation by not paying the travel costs incurred as a result of their remoteness by students coming to the ORs or travelling to other EU countries.

4.3.1 A further inconsistency is that "Erasmus for all" does not take account of third countries that are neighbours of the ORs. These inconsistencies must be removed. There should be a specific Erasmus Mundus programme for the ORs, allowing exchanges to be arranged for young people with neighbouring countries, thereby using these European outposts to promote European identity and culture.

4.4 Accessibility

4.4.1 The EESC, together with the European Parliament, highlights the need to establish an ad hoc framework for transport and ICT so that the ORs can address the problem of territorial separation and the digital divide.

4.5 Regional integration

4.5.1 The ORs should be automatically eligible for cross-border cooperation, despite the requirements for maritime borders to be no more than 150 km apart.

4.5.2 The effective regional integration of the ORs calls for measures to be adopted to improve their connectivity with neighbouring third countries and to foster the internationalisation that is essential to their SMEs.

4.5.3 It is essential that the European Union carry out impact assessments when concluding trade or fisheries agreements with the neighbouring countries of the ORs and that it keep the political authorities and civil society in the ORs informed of the negotiations and involve them on matters that directly affect them.

4.5.4 There is also interest in professional and legal circles in the ORs in the security of investments in their local environment. In that respect, the EESC supports the creation of a bar association of the ORs and all other such initiatives, including, inter alia, the Atlantic arbitration centre.

4.5.5 In a number of areas, such as transport or waste management, regional integration would make it possible to achieve economies of scale, provided that the EU shows more clearly than it has done so far that it intends to make the ORs into outposts of Europe.

4.6 Support for businesses

4.6.1 Article 107(3)(a) TFEU represents real conceptual progress, allowing the Commission to take account of the different economic situation of the ORs in the state aid framework for regional aid, as well as of the manifest deficiencies in relation to state aid for other purposes (such as research, innovation, transport and the environment). The EESC highlights the contradiction that currently exists between the priorities of the Europe 2020 strategy and the fact that the state aid frameworks for research and innovation and the environment are inadequate for the ORs. That contradiction must be corrected for the coming period.

4.6.2 At a time when the European state aid framework is under review, the ORs are concerned as to whether the existing framework will be maintained. They call for the most favourable treatment possible to be maintained, for consistent treatment of state aid for the full range of different purposes (with increased aid intensities for investment in businesses and operating aid that is not gradually reduced and not limited in time, to compensate for the additional costs associated with the outermost areas, in line with Article 349 TFEU) and a search for simple, flexible procedures.

4.6.3 The ORs have a substantial need for jobs, to put a stop to structural unemployment affecting all strata of the population. Businesses in the ORs are by definition small and medium-sized enterprises, often operating in geographically limited markets: these are very different characteristics from those that exist in mainland Europe. It must remain possible, as in 2007-2013, for aid to businesses to be granted to all types of firm.

4.6.4 Investment aid intensities in the ORs appear to have stabilised at the level applied in 2007-2013, with both the thresholds and the principle of a "bonus" for the ORs being maintained in the future. The EESC emphasises that this has no effect on intra-EU trade, particularly because the markets of the ORs have very little appeal to foreign investors. The EESC therefore calls for operating aid that is not gradually reduced and is not limited in time to continue to be allowed.

4.6.5 Public support, including European support, and investment by businesses in the ORs in innovation, the digital agenda and the search for partnerships in their local areas should be treated as priorities.

4.6.6 Due to the particular structure of the ORs, their business fabric is made up almost entirely of very small businesses. The Commission's strategy should emphasise effective implementation of the European Small Business Act and application of the "Think Small First" principle, particularly in relation to procedures and monitoring. The competition rules should be closely monitored in the ORs, to protect the interests of small and medium-sized enterprises.

4.7 Energy

4.7.1 The geography of the ORs makes them highly vulnerable and means that they need to meet the energy challenge in a different way from mainland Europe. The EU should help the ORs to secure their energy supply in complex surroundings and circumstances which significantly raise prices and restrict competitiveness.

4.7.2 It is critical for the ORs to obtain and use their own energy resources, whether in the form of energy derived from oil or gas or low-carbon forms such as wind, thermal, solar, hydropower and marine (tidal, wave, marine current and thermal) energy.

4.7.3 The EESC proposes that research into renewable energies be promoted in these regions and that energy projects in the ORs be supported through EU financial instruments, taking their specific characteristics into account.

4.8 Agriculture

4.8.1 The fundamental importance of agriculture in the ORs is clear. It contributes to employment, provides influence and helps protect traditional environments and ways of life. Besides sugar and bananas, the EU should continue to work towards diversification and self-sufficiency in food for the ORs. There is also a need to maintain the current balance between agricultural production for export and for local markets.

4.8.2 The procedures related to European aid sometimes favour large organisations and the use of intermediaries. That tendency leads to a disregard of the interests of small independent producers, who are in a large majority in the ORs, and should be changed. EU support should also serve to improve the functioning of the food chain and to promote the participation of farmers and their organisations.

4.9 Fisheries

4.9.1 The EESC welcomes the Commission's intention to ensure more regional decision-making in this field by focusing on regional maritime zones, taking account of local stock and putting in place an advisory council for the ORs. However, that advisory council must be organised according to the sea basin to which each OR belongs, to take better account of their specific situation, given that there are great differences between the fisheries of the various ORs.

4.9.2 The fisheries policy reform proposal does not satisfactorily address the situation of the ORs, for example in relation to aid to fishing fleets (as regards construction/purchase and modernisation, management of fishing effort and the impact on the ORs of fisheries agreements between the EU and third countries), as well as the lack of developments in relation to fisheries POSEIs, the content of which would benefit from a conceptual review on the model of the current approach for agricultural POSEIs. The Committee also reiterates the ideas set out in its own-initiative opinion of 27 October 2011 on The development of regional areas for the management of fish stocks and the control of fishing (rapporteur: Mr Burns).

4.10 Forestry

4.10.1 The potential for growing sustainable specialist tropical and sub-tropical hardwoods is an opportunity that should be considered in the Outermost Regions and the Overseas Countries and Territories. Their special relationship with Europe would allow them direct access due to their ability to provide certified wood that can be guaranteed not to breach any of the Forest Stewardship Council (FSC) certification rules.

4.10.2 Wood for special historical restoration projects is a specific market that should be considered, as many of the original types of wood are on endangered lists and therefore extremely difficult to source legally. Mahogany, Ipe, Virola, Padauk, Greenheart, Ramin, Apitong, or Wenge is only a small list of woods that are required for restoration projects.

4.10.3 In addition to wood, tropical and subtropical forests provide an ideal environment for growing rare plants for use in medicine and cosmetics. Wood from tropical and subtropical forestry is not a get-rich-quick-scheme, but it does offer a huge long term opportunity for these regions to capitalise on highly profitable markets that require access to these rare wood and plants.

4.11 Research and its development

4.11.1 The EESC supports the continuation of the European environment programme and the biodiversity action plan (80 % of potential European biodiversity is to be found in the ORs) and believes that future programmes under the 2020 strategy, particularly those concerning renewable energy, sustainable development and marine science, should take better account of the potential of the ORs.

4.11.2 The European Commission is not developing the ORs' potential sufficiently in this area.

4.11.3 The EESC supports the idea of creating European networks of clusters in these fields that include the ORs.

4.12 Strengthening the social dimension of the development of the ORs

4.12.1 The EESC is pleased that the Commission is focusing on the social aspect of the European model in relation to the Europe 2020 strategy. That focus should not just be a matter of good intentions, but must take the form of concrete commitments. No European citizen should be excluded or left behind by the process of development. That is the very meaning of European solidarity. The EESC supports the proposal by the President of the Region of the Canary Islands to put in place an emergency plan to combat mass unemployment, which is growing exceptionally quickly.

4.12.2 Besides the implementation of the strategic priorities, the EESC emphasises the following: 4.12.2.1 Essential basic needs, such as water for all (both individuals and businesses), sustainable energy, treatment of waste water and waste disposal, are issues of huge importance for these regions. In this respect, the Commission does not give sufficient emphasis to the need for well-functioning network services in the ORs. 4.12.2.2 A European tourism strategy is essential for the ORs; such a strategy must incorporate sustainable development and respect for identity as key pillars of the development of this sector, to avoid falling into the trap of cultural homogenisation or concreting over of coastal areas. In this context, the EESC draws attention to the Commission's Communication on Blue Growth and to the opinion currently being drawn up by the Committee (4). 4.12.2.3 The European Commission's strategy should give more attention to the cultural dimension. The ORs are an outstanding asset for the EU in that respect. The EESC therefore calls for the cultural strand of the action plans implementing the Europe 2020 strategy to be substantially strengthened.

Brussels, 20 March 2013. The President of the European Economic and Social Committee Staffan NILSSON

(1) EESC Opinion on The impact of the Economic Partnership Agreements on the outermost regions (Caribbean region), OJ C 347, 18.12.2010, p. 28.

(2) These recommendations can also be found in other documents, such as:

the study by ISMERI Europa for the European Commission on Growth Factors in the Outermost Regions;

the report by Pedro Solbes Mira for Michel Barnier, European Commissioner responsible for the internal market, on Europe's Outermost Regions and the single market: the EU's influence in the world;

the study by INED for the European Commission on Demographic and migration trends in the OR: impact on economic, social and territorial cohesion;

the report of the European Parliament's REGI Committee (rapporteur: Mr Nuno Teixeira) on The role of cohesion policy in the outermost regions of the European Union in the context of EU 2020;

the study for the European Parliament on The role of regional policy in addressing the effects of climate change in outermost regions.

(3) OJ C 44, 15.2.2013, p. 23.

(4) EESC opinion on Blue Growth: opportunities for marine and maritime sustainable growth, ((See page 87 of this Official Journal).