Opinion of the Economic and Social Committee on "Guidelines for integrated actions on the island regions of the European Union following the Amsterdam Treaty (Article 158)"

(2000/C 268/09)

On 22 September 1999 the Economic and Social Committee, acting under the third paragraph of Rule 23(3) of its Rules of Procedure, decided to draw up an opinion on the above-mentionned guidelines.

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 6 June 2000. The rapporteur was Mr Vassilaras.

At its 374th plenary session (meeting of 12 July 2000), the Economic and Social Committee adopted the following opinion by 53 votes in favour and five abstentions.

During the preparation of the opinion, representatives from the Section visited several islands locations within the European Union. A short summary of these visits is appended to this opinion.

1. Introduction

1.1. More than 25 years after the creation of the European regional policy, most of the population of the island regions(1) of the European Union still have a per capita G.D.P. lower than 75 % of EU average. This raises the question of the efficiency of the policies that have been implemented over the years, by both the European Union and the Member States, with regard to the islands.

1.2. Article 158 of the Amsterdam Treaty which now forms the legal basis for the EU's economic and social cohesion policy, not only emphasises that in order to promote harmonious development throughout the Community, the disparities between levels of development of the various regions must be reduced, but also pays particular regard to reducing the backwardness of the least favoured regions or islands, including rural areas.

1.3. For the Economic and Social Committee, the conclusion to be drawn from this new Article, together with Declaration No. 30 on island regions(2), is that EU policies have so far insufficiently addressed the structural problems faced by these regions linked to their permanent geographical handicap. It also reflects the present urgent need for special measures to ensure that island regions can compete on a level playing field with other regions.

1.4. It should be emphasised also that one of the achievements of the Amsterdam Treaty is that sustainable development is considered as one of the EU's main aims in terms of economic and social cohesion.

1.5. On 16 May 1997 the European Parliament adopted a resolution on an integrated policy adapted to the special situation of island regions in the European Union(3), in the meaning of Article 158 of the Treaty, recognising the sustainable, harmonious, convergent and balanced socio-economic development of the island regions of Europe as a priority objective and necessity, and calling upon the Council and the Commission to maintain their high level of concern to reduce the inequalities and backwardness affecting the Community's disadvantaged island regions, and to maintain the high level of structural fund interventions. It also called for them to push ahead with the necessary measures which would benefit all European island regions.

1.6. The European Parliament considers that these measures must, in the future, be reflected in all Community legislation and policies: only in this way can the nearly 14 million inhabitants of the island regions compete with the other regions on equal terms and enjoy the same opportunities for development which the EU offers to mainland and remote regions.

1.7. In December 1997, the Ecofin Council declared that it would protect and support the economic development of islands.

1.8. On many occasions, the Commission itself emphasised the need to address the specific problems faced by the most remote or isolated regions, including islands. For example, in the 10th Annual Report of the Structural Funds (1998)(4), the Commission acknowledges the need for improved coordination in the future development of transport and cohesion policy from the design stage and stated that in the new programming period, the stress will be on improving access to transport networks and the creation of sustainable and effective transport systems which make balanced use of the various modes. The ERDF and the Cohesion Fund will continue to finance the trans-European networks (TENs).

1.9. Already in its opinion on Disadvantaged island regions of 2 July 1987(5), the Committee expressed its concerns and made some initial proposals on special measures for these regions. The opinion subsequently had a positive influence on the conclusion taken at the Rhodes European Council(6) in December 1988. But it is only 9 years later, with the adoption of the Amsterdam Treaty that the European Union paved the way for new policy decisions and measures in favour of islands.

1.10. Since then, the Committee has repeatedly highlighted the need for a change in EU regional policy so that island regions are included de facto among Objective 1 regions. This would enable the socio-economic inequalities and environmental threats caused by their structural disadvantages and weaknesses to be addressed and offset. Lately, in its Opinion on The reform of the Structural Funds(7) of 10 September 1998, the Committee called for a large measure of flexibility in establishing the criteria for regions' eligibility.

1.11. However, The Committee deplores that the new regulations governing the Structural Funds for the period 2000-2006 do not take into account the specific problems faced by the island regions. In particular, most of the funding will continue to be allocated on a purely statistical basis, i.e. per capita GDP, which leaves little room, or no room at all, for flexibility.

1.12. In its opinion on the Sixth Periodic Report on the social and economic situation and development of the regions of the European Union, of 22 September 1999(8), the Committee voiced its particular concern that, as shown by the report, the statistical definition of the EU regions - the NUTS classification - could result in some disadvantaged regions not qualifying for support.

1.13. In the light of what has been said, the Committee now wishes

(i) to help design the necessary measures enabling island regions to enjoy their fair share of development and thus to contribute to implementing Article 158 of the Treaty and the attached Declaration, and

(ii) to start a thinking process for next programming period of the Structural Funds.

1.13.1. This opinion should also be seen in the context of the preparation of the next Cohesion Report, provided for under Article 159 of the Treaty, which the Commission will publish by the end of this year.

1.14. The Committee recognises that Article 158 of the Treaty also applies to many other least favoured regions of a different nature (for instance, some upland areas), including rural areas. However, it believes that given their geographical and natural dissimilarity, they should be dealt with separately.

1.14.1. The Committee believes that the problems faced by these regions also should be addressed since the new Treaty and the reform of the Structural Funds, together with the forthcoming enlargement, have created new uncertainties for them too.

1.15. In a separate commitment, Article 299 (2) of the Treaty acknowledges the special difficulties faced by the most remote, or outermost, regions of the European Union. It specifically refers to the Azores, Madeira, the Canaries, and the four French overseas territories, three of which are islands and the fourth may be considered equally isolated from the main parts of the European Union. The issues related to the implementation of Article 299(2) are not dealt with in this Opinion since they will be addressed in the course of the preparation of a separate opinion on the Commission Report on The measures to implement Article 299(2) concerning the outermost regions of the European Union(9).

2. General comments

2.1. The Committee notes that the reference to "islands" in the second paragraph of Article 158 has been translated into the various official languages of the European Union in such a way that its meaning is ambiguous, and even contradictory, from one language to another.

According to the linguistic version of the Treaty referred to, insularity is either considered as a special case in its own right, or as a mere geographical precision of little practical significance.

2.1.1. It nevertheless considers that there would have been little point in including a reference to islands in Article 158 of the Treaty if it was not to recognise the specificity of the permanent structural handicaps affecting islands. Declaration No. 30 on island regions, adopted in Amsterdam at the same time as Article 158, is absolutely unambiguous in this regard.

2.1.2. Consequently, the Committee assumes that the correct interpretation of Article 158 is that island status is a source of permanent structural disadvantage. As such, insularity is a special factor which must be taken into consideration in addition to those factors (such as per capita GDP, or unemployment rates) which are usually employed to assess the socio-economic difficulties of the less favoured regions of the European Union.

2.2. In the light of the above, the Committee must express its concern that island regions still do not receive proper treatment by the European Union. The necessary measures must be taken urgently at a time when the European Union:

1) has decided on the reform of the Structural Funds and the adoption of new rules for the 2000-2006 period - in which, from 2000 onwards very few island regions will be considered as lagging behind in development and therefore requiring special structural support;

2) is negotiating EU accession with a number of countries, most of which have very low per capita incomes. In addition, enlargement will entail additional spatial problems for both new and existing Member States in pushing eastward the centre of gravity of the European Union.

2.3. The Committee also believes that the continuous infrastructure development in the broader continental setting, with the ever-increasing added value it generates, and the blanket rules governing the internal market - which reflect the mainland socio-economic environment in the way they work - continually render island regions uncompetitive and push them further behind.

2.4. The reform of the Structural Funds fails to take account of the island nature of these regions or of the permanent physical obstacles to regional development. It restricts itself to examining macroeconomic factors alone in determining the eligibility of island regions. The Committee feels that the use of the 75 % of GDP threshold, measured in purchasing power parities, is very harsh, since in the light of the Amsterdam Treaty island regions could benefit from special measures tailored to their individual levels of development, so as to compensate for their natural disadvantage.

2.4.1. Moreover, this situation will affect authorisation of regional aid granted by the Member States, since the use of such support under Article 87.3(a) is at present strictly limited to NUTS II regions with a GDP below 75 % of the average. Consequently, it will not be possible to compensate for the lack of Community funding with national aid. Working aids, currently allowed under Article 87.3 (a), will also be prohibited, unless the guidelines are changed. This will affect many islands very seriously, and could cancel out the initial successes achieved by existing national or Community policies.

2.5. The Community enlargement policy will have the effect of spectacularly increasing the relative level of prosperity of the EU islands - at least in statistical terms. The much lower per capita GDP of the countries presently seeking to join the European Union will result in a lower EU average, thus generating a relative increase in wealth of those regions which are currently the most disadvantaged.

2.5.1. Statistics demonstrate that in 2007 only 1 to 10 % of the population of the 15 Member States would benefit from objective 1 status. As a consequence, all the island regions presently benefiting from Objective 1 status - with some exceptions - will cease to be eligible, since they will mathematically overshoot the threshold of 75 % of the EU average.

2.5.2. Therefore, the Committee believes that, in addition to socio-economic criteria, other eligibility criteria will have to be determined and taken into consideration when allocating structural Funds support, such as the insularity criterion and other criteria based on the constraints linked to the island region status.

2.6. In its opinion on the European Spatial Development Perspective (ESDP)(10) of 9 September 1998, the Committee underlined that enlargement will give added weight to the problems already faced by the outlying regions of the European Union (communications, transport infrastructure, access to economic activities and public services, health and education in particular, and so on) and will make it all the more important to secure a new regional balance taking into account the geographical diversity of the European territory, thus making the principle of territorial cohesion an additional strand to that of economic and social cohesion.

2.6.1. In the light of the above, the Committee is of the view that the European Spatial Development Perspective (ESDP) agreed at the informal Council of Ministers for Spatial Development in Potsdam, in May 1999, pays too little attention to the islands and to the need to adopt an integrated spatial development policy at both EU scale and national level which takes due account of the specific geographical characteristics and handicaps of the island regions.

2.6.2. This being the case, the Committee welcomes the multiplicity of measures taken by the political, economic and social players in the island regions and the large number of projects which they have carried out. This action gives grounds for hope and lays the foundations for concrete measures to be taken at EU level (cooperation projects, exchanges, benchmarking). The Committee would express its support, in particular, for the measures taken by the Islands Committee of the Conference of Peripheral Maritime Regions of Europe (CRPM) and the network of island chambers of commerce in the EU.

3. General conclusions supporting policy adoption

3.1. The Committee is convinced that the variety of the approximately 450 inhabited islands in the EU means that all forms of evaluation must be brought to bear on the problems and needs of each island individually, and of groups of similarly-sized islands.

3.2. Before launching sweeping assessments to determine policy, consideration must be given to

(a) the distance from the nearest centre to which the island or group of islands belongs (no sensible comparison can be made between the island of Salamina, facing the port of Piraeus, and Réunion in the Indian Ocean)

(b) the climate (islands in the north of the EU) and

(c) population: Sardinia has 1600000 inhabitants while the 53 islands off the Irish coast together contain only 4000.

3.3. The Committee believes it essential and urges the Commission to:

- draw up a green paper, in consultation with economic and social actors, mapping out a full-scale development plan for Community island regions, starting by identifying, in terms of the various Community policies (transport and telecommunications, energy and the environment, research and innovation, information and training, education and culture, information society and the new economy, health and sectoral policies in agriculture, fisheries, tourism etc.), mechanisms for joint action by the various programmes. These mechanisms could be implemented by setting up one-stop-shops for EU islands with assistance directly from individual island situations or groups of islands by means of an interactive Internet platform, on the basis of their main characteristics and needs, to integrate them into a technological-innovative-training growth dynamic faster than that on the mainland and progressively closing the existing gap;

- subsequently, this new island approach should be consolidated by a white paper containing an action plan, laying down a specific timetable for action and providing instruments to monitor performance, with economic and social actors being fully involved at island and European level.

- as an official body representing the economic and social actors of civil society, the Committee could provide a useful interface and assess, at European level, the practical results of such action by means of a report which the Commission would submit every two years to the European Parliament, the Economic and Social Committee and the Committee of the Regions;

- formulate and implement a benchmarking and assessment pilot action for problems and needs arising from island status in the EU with a view to preparing a Community strategy to integrate the various relevant European policies. While fully reflecting the diversity and specific features and problems of islands, the pilot action would provide a single focus for Community action, based on full recognition of the principle that island status represents a priority criterion for Community efforts to boost competitiveness and the harmonious development of the Union as a whole;

- rationalise, strengthen and consolidate into on-going actions information, training and valorisation networks for innovative SMEs, ensuring due regard, based on the island status criterion, to projects and initiatives with an island-related element under Community programmes and financial instruments such as:

- the Fifth RTD Framework Programme and its annual work programmes, particularly for the CRAFT sub-programme;

- the SAVE energy efficiency programmes and the Altener programme for alternative energy sources;

- the new Interreg interregional cooperation programme and the Leader programme;

- the MEDA Mediterranean cooperation programme and the PHARE programme;

- the LIFE environmental programme;

- the forthcoming multiannual programme for SMEs;

- the Leonardo, Socrates and Raffaello education, training and cultural programmes;

- the EIB and EIF financial intervention instruments;

- and, above all, present and future Community programmes and initiatives for e-business, intangible investments in the new economy and networks of learning communities, together with arrangements linking universities in remote regions to centres of excellence and skill centres, and combating new forms of social exclusion caused by computer illiteracy.

3.3.1. The Committee would emphasise the urgency of such an integrated strategic framework for action as a means of ensuring that economic and social cohesion takes root in the island regions as well as on the mainland, and that they can derive the full practical benefits of the process of European integration.

4. Proposals and recommendations

The Economic and Social Committee,

- whereas the need for the European Union to implement an integrated policy for Community island regions, designed to ensure effective economic and social cohesion and equal opportunities for competition with all parts of the European Union, counterbalancing the permanent geographical, natural, economic, social and structural handicaps affecting island regions,

- whereas the importance of the new Treaty of Amsterdam with regard to the constitutional significance of the island region status principle as set out in Article 158 - in keeping with the oft-repeated views of the European Parliament - which should be fully reflected in the Community institutions' political and legislative action,

- is convinced that benchmarking is essential for EU islands, as part of a comparative study of competitive conditions in the different island circumstances, with a view to identifying the most appropriate levels for intervention and islands' coordination needs in order to ensure that island regions enjoy equal opportunities in the single market, thereby counterbalancing their in-built handicaps;

- stresses that the island status principle, as enshrined in the Treaty, must be fully reflected in all Community policies and instruments, as a factor in prioritising actions, and believes that it should be included among project selection criteria;

- considers coordination of island-related policy and action to be crucial, together with intensified statistical data gathering, monitoring of results and assessment of the impact of Community measures on island circumstances.

- Calls upon the Commission to:

1) immediately launch an assessment and benchmarking pilot action on EU island regions;

2) present a green paper outlining the strategic framework for a EU island regions development plan, to be incorporated into the European Spatial Development perspective (ESDP) adopted at Potsdam;

3) follow this up with a white paper, containing an action plan based on a timetable for integrated measures for island regions, coordinated by a Commission interdepartmental taskforce, also responsible for managing the one-stop-shop for island regions and the related interactive Internet platform;

4) associate the Economic and Social Committee to the design of the integrated action plan for island regions;

5) submit a two-yearly report on the island regions of the EU to the European Parliament, the Economic and Social Committee and the Committee of the Regions for an opinion.

Brussels, 12 July 2000.

The President

of the Economic and Social Committee

Beatrice Rangoni Machiavelli

(1) Throughout the Opinion, the word "region" is used in its geographical, and not administrative, sense.

(2) Declaration No. 30 states: The Conference recognises that island regions suffer from structural handicaps linked to their island status, the permanence of which impairs their economic and social development. The Conference accordingly acknowledges that Community legislation must take account of these handicaps and that specific measures may be taken, where justified, in favour of these regions in order to integrate them better into the internal market on fair conditions.

(3) OJ C 167, 2.6.1997, p. 249.

(4) COM(1999) 467 final, point 1.2.5, p. 24.

(5) OJ C 232, 31.8.1987.

(6) "The European Council recognizes the particular socio-economic problems of certain island regions in the Community. It therefore requests the Commission to examine these problems and submit, if appropriate, any proposals which it deems useful, within the financial possibilities offered by the Community's existing policies as they have been decided."

(7) OJ C 407, 28.12.98.

(8) OJ C 329, 17.11.1999, p. 20.

(9) COM(2000) 147 final of 14.3.2000.

(10) OJ C 407, 28.12.98, p. 85.

APPENDIX I

to the Opinion of the Economic and Social Committee

Some features of the permanent structural problems of island regions

1. The geographical area of the EU contains some 450 inhabited islands, accounting for 5 % of its land surface and with a population of more than 14 million. Some are close to the mainland, while others are more remote and widely scattered.

2. Island regions are parts of Member States entirely surrounded by the sea, without fixed link to the mainland: none of them is home to a Member State capital city (Eurostat definition).

3. From the administrative point of view, islands have different arrangements according to size and population. First, second and third level administrations are all present in some islands: others join together in small groups around a larger island, together providing all levels of local government. Certain islands with first level government belong to the second and third level administrative arrangements of mainland areas. Some particularly small islands with minimal populations have no such administrative structure.

4. Islands are characterised by permanent disadvantages, which clearly distinguish them from mainland regions. These permanent disadvantages, with common characteristics although varying in intensity, include:

- isolation from the mainland;

- the higher cost of sea and air transport, communications and infrastructure on account of natural and climate-related obstacles;

- restricted usable land area;

- limited fishery resources;

- restricted water supplies;

- restricted sources of energy;

- marine and coastal pollution;

- special difficulties in waste management;

- falling population, particularly of young people;

- coastal erosion;

- the shortage of a qualified workforce;

- the absence of a favourable economic climate for businesses;

- difficult access to education and health services.

5. Island economies also suffer from the small scale and seasonal nature of local markets. They often depend on a single economic sector (agriculture, fisheries, tourism), leaving them completely defenceless against market fluctuations. Most island regions are particularly hard hit by a falling employment rate, which is not offset by alternative job opportunities in other sectors. The result is a shift of the working population to other centres. The steady decline in the working population entails a reduced demand for goods and services supplied by local businesses, undermining the public and private sector economy. This cycle of decline weakens the economic and social base of island regions, leading to depopulation.

6. This means that all island regions experience much greater difficulty in achieving a level of socio-economic development comparable to the EU average or, when they have attained a reasonable level of prosperity, that they have to strive much harder simply to maintain their existing level of development. In other words, while they are not systematically the Community's poorest regions, islands are nevertheless far more fragile and vulnerable, since their natural and permanent constraints cumulate with, and tend to increase, the socio-economic problems which are common to all regions.

7. Islanders are proud of their origins and culture, and welcome visitors. Historical monuments and mediaeval cities are preserved on numerous islands, and new archaeological finds are constantly unearthed. The history and traditions linked with these monuments further enrich Europe's historical fabric. Island living conditions are often difficult for both inhabitants and visitors. Although island regions are varied, they must all face up to the problem of their island status.

APPENDIX II

to the Opinion of the Economic and Social Committee

1) Third meeting to be held in the Autonomous Region of the Azores (Portugal) on Wednesday 15, Thursday 16 and Friday 17 March 2000

At the Study Group meeting in the Azores and during the exchange of views which took place there between the various interest groups, e.g. employers, employees, etc., it emerged that peripheral regions were coping well with Article 299 and therefore agreed with the ESC Opinion on Article 158. They are calling for an additional instrument to be made available, along with Article 158 for further developing island regions.

It is their opinion that the Commission and the Council of Ministers must set up a global programme and finally issue a white paper, to take account of equal rights and equal opportunities in overcoming the structural disadvantages associated with the island regions; these act as a constant brake on their economic and social development (as recognized in Declaration No. 30 of the Amsterdam Treaty).

2) Fourth meeting to be held in Oban (Scotland) on Wednesday 12, Thursday 13 and Friday 14 April 2000

As part of the work carried out in preparing the Own Initiative Opinion, the Study Group visited two of the Islands of the West of Scotland. The visit was hosted by the Argyll and Bute Council and Argyll and the Islands Enterprise and both organisations gave evidence about Island life.

There are about 90 inhabited islands in the Highland and Islands Objective I area with a total population of 103000. Only three islands have a population of more than 15000 people and two-thirds have fewer than 500.

During the visit the Study Group visited the Islands of Mull and Iona, took evidence from local Community Groups, and held a hearing in Oban at which other Islands were represented and gave evidence.

The main issues of concern raised during the visit were Access and Transport, Infrastructure (roads, telecommunications), Education and Skills Training, De-population, Growing and Creating Businesses, Tourism, Agriculture and Fishing.

3) XXth C.P.M.R. Islands Commission Meeting - KOS (Greece) - 11/12 May 2000

The Rapporteur attended the 20th meeting of the C.P.M.R. Islands Commission held in Kos. It is worth noting that all participants expressed support for the work of the Committee on Island regions. The final declaration stated that a white paper and a global programme at European level would help the islands to overcome their chronic problems through an appropriate policy for the future and equal development opportunities.