EN Official Journal of the European Union C 294/21

Opinion of the European Economic and Social Committee on the Communication from the Commission — A stronger partnership for the outermost regions

(COM(2004) 343 final)

(2005/C 294/05)

On 27 May 2004 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the Communication from the Commission — A stronger partnership for the outermost regions

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 22 June 2005. The rapporteur was Ms López Almendáriz.

At its 419th plenary session, held on 13-14 July 2005 (meeting of 13 July), the European Economic and Social Committee adopted the following opinion by 62 votes to 1 with 8 abstentions.

1. Introduction

1.1 In June 2002, the Seville European Council asked the European Commission to submit a report presenting a global, coherent approach to the special characteristics of the situation of the outermost regions and to ways of addressing them; in response, the Commission adopted a Communication entitled A stronger partnership for the outermost regions (1) on 26 May 2004.

1.2 This request from the European Council, which came on the eve of EU enlargement and in the context of globalisation, represented a decisive initiative for drawing up a global strategy for development in the outermost regions, based on pressing ahead with the implementation of Article 299(2) of the Treaty.

1.3 On 29 May 2002, just before the Seville European Council, the European Economic and Social Committee adopted an Own-initiative opinion on the Future strategy for the outermost regions of the European Union (2), which proposed the development of a global strategy for these regions, specifying principles, objectives, available resources and a timetable for the adoption of measures.

1.4 With the objective of launching a comprehensive, coherent policy for the outermost regions, in June 2003 the regional governments and the countries concerned submitted memorandums, all stressing the importance of recognising the specific characteristics distinguishing these regions from other European regions.

1.5 Articles III-424 and IV-440(2) of the Constitutional Treaty confirm specific legal recognition of the outermost regions, and a new objective of territorial cohesion is added to the objectives of economic and social cohesion.

2. Gist of the Commission document

2.1 The Commission is proposing a stronger partnership with the outermost regions of the Union. The new strategy forms part of the reform of EU cohesion policy for 2007-13. The Communication identifies three priorities: — Competitiveness: improve the competitiveness of the outermost regions by creating and developing a business environment which will attract new companies. — Accessibility: step up cohesion efforts in the outermost regions in order to reduce the difficulties connected with their remoteness, such as fragmentation among a group of islands or enclosure in areas with poor access. The reduction of these handicaps and of the additional costs of production in the outermost regions is one of the main priorities of the Union's activities to help these regions. — Regional integration: the outermost regions and neighbouring non-member countries exist in a common regional environment which should facilitate trade among them in goods and services. This is why it is important to encourage their integration into their surrounding geographical area.

2.2 The Commission proposes two specific solutions aimed at helping the outermost regions to develop their full potential: — A specific programme to compensate for handicaps: this programme would be financed by the ERDF over the period 2007-13. It would be dedicated to reducing the specific handicaps faced by the economies of the outermost regions which are listed in Article 299(2) of the EC Treaty: remoteness, insularity, small size, difficult topography and climate and economic dependence on a few products. — An action plan for a wider neighbourhood: the aim would be to enlarge the natural sphere of influence of the outermost regions in socio-economic terms (including as regards migration-related issues) as well as in terms of culture. This means reducing barriers which limit the scope for trade within the geographical area of these regions, which are far from the European mainland but very close to the regional markets of the Caribbean, America and Africa. The action plan for a wider neighbourhood will consist of measures concerning both trade and customs matters and also transnational and cross-border cooperation.

3. General comments

3.1 The Committee welcomes the fact that Articles III-424 and IV-440(2) of the draft Constitutional Treaty confirm specific legal recognition of the outermost regions at the highest level of legislation, recognising their exceptional nature and providing for the adoption of cross-sectoral laws and regulations to ensure flexible application of common policies in these regions.

3.2 The Committee is pleased to note the EU's ability to respond to regions' specific needs and, in particular, its recognition of the specific characteristics of the outermost regions and of the way they differ from other regions with geographical or demographic constraints.

3.3 The Committee welcomes the fact that the Commission has accepted the recommendation it made in its Opinion on the Future strategy for the outermost regions of the European Union to reinforce the Commission's interdepartmental group for the outermost regions, creating a specific unit in DG Regio to give it more human resources, and hopes that its role of interdepartmental coordination will not be obstructed.

3.4 The Committee welcomes the recognition in the Commission Communication that the special status of the outermost regions is based on the principles of equality and proportionality. The special status allows differing treatment to take account of the distinct situation of those regions, so that their inhabitants can enjoy the same opportunities as people living in other regions of Europe.

3.5 The Committee welcomes the Commission's recognition that the combination of permanent constraints on the outermost regions gives rise to additional costs, in terms of energy supply in general, and primarily, where farm products for local consumption are concerned, owing, inter alia, to the following difficulties: — small markets; — isolation from main markets; — lack of economies of scale in the production sector and the need for firms to stock large quantities of goods; — faster depreciation of goods, and the consequent need for equipment to comply with higher safety standards or be replaced more often (problems caused by the difficult climate and terrain); — problems caused by the use of production infrastructure geared to larger-scale production and distribution systems; — shortage of skilled labour because of the small labour market and the difficulty of gaining access to the rest of the European labour market; — the additional costs of energy supply, affecting farming products for the local market; — lack of access to high-speed connections and telecommunications networks, the additional costs of electronic communications services; — the difficulty of promoting local products outside a region; — obstacles created by the need to comply with environmental regulations; — twofold insularity, i.e. the fact that some outermost regions are themselves broken down into a number of islands.

3.6 The Committee shares the Commission's concern to integrate the outermost regions into the Lisbon and Gothenburg strategy with a view to creating jobs and boosting economic reform and social cohesion, and therefore proposes that their potential be harnessed in the area of the knowledge-based society.

3.7 The Committee feels that the vigorous growth of the tourism sector represents considerable added value, helping to increase the competitiveness of the outermost regions' economies. However, the sector must not grow too fast because of the imbalance that would be created and the detrimental impact on the environmental sustainability of those regions.

4. Specific comments on the Commission Communication

4.1 The Committee welcomes the fact that the Commission Communication takes into consideration a number of the recommendations made in its own-initiative opinion (3) but regrets that others have not been taken into due account.

4.2 The Committee wishes to point out that the common position of the outermost regions and the Member States concerned on future cohesion policy rules applying to these regions proposed automatic eligibility for the former objective 1 — now the ‘convergence’ objective — as the best way of addressing their specific situation, thereby guaranteeing that they receive uniform treatment and the necessary funding to tackle their permanent constraints.

4.3 The Committee notes that the Commission has opted for an alternative proposal, combining the application of general cohesion policy rules to the outermost regions with the creation of specific instruments: a programme to compensate for the specific constraints on the outermost regions and an action plan for the ‘wider neighbourhood’.

4.4 The Committee notes that there is no explicit reference to the legal scope of the new Article III-424 of the draft Constitutional Treaty (4).

4.5 The Committee regrets that the Commission's strategy for the outermost regions is chiefly and almost exclusively concerned with cohesion policy, hardly making any provision at all for action in other spheres.

4.6 The Committee hopes that the progress made in identifying the specific characteristics of the outermost regions and noting the inadequacy of certain sectoral policies will result in a cross-sectoral strategy for these regions which takes account of their specific, anomalous situation within the Community.

4.7 The Committee therefore thinks that the lack of consideration given to the role of other Community policies means that, strictly speaking, this cannot be called a genuinely comprehensive, coherent strategy for the outermost regions as required by the Seville European Council.

4.8 The Committee regrets this oversight, particularly where agriculture is concerned, in that no response is given to many of the questions raised by the outermost regions which urgently require solutions to be found.

4.9 Similarly, the Committee regrets the lack of provisions on immigration policy seeking to provide solutions to urgent problems constantly besetting some of the outermost regions and calls for the specific characteristics of these regions to be taken into account in future immigration policy.

4.10 The Committee expresses reservations regarding whether it is appropriate and sufficient to apply the general cohesion policy eligibility criteria to the outermost regions, considering that they have insufficient basic infrastructure and lack the conditions for competitiveness which are necessary if the goals of the Lisbon and Gothenburg strategies are to be achieved.

4.11 The Committee notes that the Commission's strategy for the outermost regions is based almost exclusively on two specific instruments: the programme to compensate for the specific constraints they face, and the ‘wider neighbourhood’ action plan (5).

4.12 The Committee welcomes the fact that, under the new ERDF objective 3, ‘European territorial cooperation’, the outermost regions are to be eligible for funding for both cross-border cooperation and transnational cooperation, as this is essential if they are to be able to interact with their respective neighbours.

5. Recommendations

5.1 The Committee believes that the Commission should draw up a comprehensive strategy for the outermost regions, providing the resources necessary to implement it in accordance with the commitments made in its March 2000 report and called for in the June 2002 Seville European Council Conclusions. To this end, it must be made clear that the current Article 299(2) of the Treaty (the future Article III-424 of the Constitution) is the sole, common legal basis for all measures applying to the outermost regions, whether they involve derogation from the actual Treaty or amendment or adaptation of secondary legislation.

5.2 For these reasons, the Committee considers it right and necessary to make a number of recommendations urging the Commission to:

5.2.1 consider not applying the general cohesion policy eligibility criteria to the outermost regions, as the best way of enabling them to tackle their permanent constraints, while, in addition, ensuring that they continue to receive uniform treatment;

5.2.2 allocate the two proposed specific instruments sufficient funding to enable them to meet the needs and resolve the problems of all the outermost regions;

5.2.3 spare no effort or resources to give practical effect to the ‘wider neighbourhood’ action plan through effective, coherent coordination with EU development policy and, in particular, with the provisions of the Cotonou Agreement, the MEDA (southern Mediterranean and the Middle East) and ALA (Latin America and Asia) programmes and other future Community programmes and initiatives launched with specific regions of the world;

5.2.4 safeguard the interests of the Community banana sector as a whole in the impending changes to the rules governing the COM in bananas, improving the current market equilibrium so that growers from the less developed countries can have access to the Community and global markets while, at the same time, Community growers' incomes and jobs can be safeguarded, by setting an appropriate tariff which is sufficiently high to secure the future of the Community banana sector;

5.2.5 respond to the final outcome of the WTO negotiations with regard to the setting of the flat tariff rate by proposing, where necessary, appropriate measures to ensure continued employment and income guarantees for Community growers in the banana sector. These could include measures to improve the mechanisms of the internal support system;

5.2.6 when amending the Posei agricultural programmes, ensure that their potential is fully exploited. This has not been the case so far, mainly because some of the measures are very recent. The ceilings established for the programmes should be respected, allocating sufficient funding to enable the goals set to be achieved;

5.2.7 address the specific needs of the outermost regions as regards rural development policy, not least by abolishing provisions which restrict or prevent access to structural aid; compensating farmers for increased costs; setting aid levels which are commensurate with the needs of these regions; and increasing Community coverage by introducing support measures in the following and other fields: specific production systems, use of appropriate machinery, agricultural insurance schemes, promotion of the setting-up of associations, and programmes for combating harmful organisms;

5.2.8 adopt new measures to boost the competitiveness of farm products such as tomatoes, fruit, plants and flowers, which have to compete in the same markets as similar products from other countries with which the EU has association agreements, such as Morocco, or which have preferential systems, such as the ACP countries;

5.2.9 take the necessary measures to ensure that all the outermost regions continue to benefit from the current levels of funding and aid, where both the future Rural Development Fund and the future European Fisheries Fund are concerned;

5.2.10 strengthen the European Social Fund's role in the outermost regions, with a view to bringing down the unemployment rate, which is particularly high in most of these regions, and ensuring that the people of these regions have the same opportunities as other EU citizens;

5.2.11 support the creation or, where appropriate, consolidation of economic and social councils, which will convey the views of economic and social stakeholders and civil society organisations in general more effectively;

5.2.12 revise its proposals on state aid, taking into account the provisions of the draft Constitutional Treaty, and continue and step up the special treatment of the outermost regions as regards state aid in the agricultural and fisheries sectors and in the freight sector;

5.2.13 introduce appropriate measures to ensure that proper provision is made for the outermost regions in all common transport policy instruments which affect their development, and that the specific characteristics of these regions are taken into account in Community legislation on public service obligations so that quality and prices can be assured which are geared to the needs of their inhabitants;

5.2.14 build on and improve the competition system in the sea and air transport sectors in the outermost regions, particularly in regions suffering from ‘twofold insularity’;

5.2.15 give practical effect to the specific references to the outermost regions made in the Commission proposal on the Seventh RTD Framework Programme, in order to facilitate their participation in Community R&D initiatives in the fields of climatology, volcanology, oceanography, biodiversity and natural risks, among others;

5.2.16 take into account the specific situation of the outermost regions when liberalising the internal gas and electricity markets, in order to avoid penalising consumers in these regions in terms of regularity of supply, quality of services and prices; that means taking a more flexible approach to establishing public service obligations and state aid;

5.2.17 urgently adopt measures ensuring sustainable development in the outermost regions, particularly in the fields of protection of biodiversity, the Natura 2000 network and waste management;

5.2.18 be imaginative when establishing specific mechanisms and procedures for the outermost regions, to ensure that the benefits of the single market do not pass them by, e.g. encouraging the use of renewable energies and access to broadband networks;

5.2.19 ensure that the outermost regions continue to enjoy special tax arrangements, as these are essential for their economic development;

5.2.20 envisage the active participation of the outermost regions in the negotiation of the EU-ACP economic partnership agreements (EPAs), facilitating the creation of a permanent channel for ongoing dialogue between regional — and/or national — authorities and regional bodies with which the EU is negotiating the EPAs, in order to make the agreements more effective, compatible and consistent.

Brussels, 13 July 2005. The President of the European Economic and Social Committee Anne-Marie SIGMUND

(1) COM(2004) 343 final.

(2) OJ C 221 of 17.9.2002, p. 10, rapporteur: Ms López Almendáriz.

(3) OJ C 221 of 17.9.2002

(4) ‘Article III-424: Taking account of the structural economic and social situation of Guadeloupe, French Guiana, Martinique, Réunion, the Azores, Madeira and the Canary Islands, which is compounded by their remoteness, insularity, small size, difficult topography and climate, economic dependence on a few products, the permanence and combination of which severely restrain their development, the Council, on a proposal from the Commission, shall adopt European laws, framework laws, regulations and decisions aimed, in particular, at laying down the conditions of application of the Constitution to those regions, including common policies. It shall act after consulting the European Parliament.

The measures referred to in the first paragraph concern in particular areas such as customs and trade policies, fiscal policy, free zones, agriculture and fisheries policies, conditions for supply of raw materials and essential consumer goods, State aids and conditions of access to structural funds and to horizontal Union programmes.

The Council shall adopt the measures referred to in the first paragraph taking into account the special characteristics and constraints of the outermost regions without undermining the integrity and the coherence of the Union legal order, including the internal market and common policies.’

(5) See footnote 1.