WRITTEN QUESTION E-3075/01

by Isidoro Sánchez García (ELDR) to the Commission

(9 November 2001)

Subject: Aid received by the Canary islands in the period 1991-2001. Outermost regions

2001 marks the tenth anniversary of the entry into force of Council Regulation (EEC) No 1911/91(1) of 26 June 1991 on the application of the provisions of Community law to the Canary Islands.

With a view to assessing the impact of Community policies and aid in this outermost region, can the Commission state the total and separate amounts of aid received by the Canaries in the period 1991-2001 from the ERDF, the ESF, the FIFG and the EAGGF Guidance Section, as well as the total amounts under the EAGGF Guarantee Section? What impact did such financial aid have on GDP and increased employment in the Canaries?

(1) OJ L 171, 29.6.1991, p. 1.

Supplementary answergiven by Mr Prodi on behalf of the Commission

(30 April 2002)

Structural Funds and Cohesion Fund

As far as the Structural Funds (ERDF, ESF, EAGGF-O, FIFG) are concerned, the programming periods unfortunately do not coincide with the ten-year period (1991-2001) mentioned by the Honourable Member.

The programming periods in question are 1989-1993, 1994-1999 and 2000-2006, and, except for EAGGF (Guidance) and FIFG, it is therefore not possible to indicate the figures for the period 1991-2001. The closest proxy to the ten-year period concerned would be to take the sum of the first two programming periods. The figures in Table 1 give (for ERDF, ESF and REGIS) the total specific structural fund aid allocations to the Canary Islands decided during these two periods. There were also some general interventions for which specific regional breakdowns are not available and which are to be added to the figures of Table 1.

On an indicative basis, the Community Support Framework 1994-1999 estimated that the Canary Islands would benefit from about EUR 530 million in aid from these interventions.

The Community finance provided by the ERDF during the 1989-1999 period, EUR 1 650 million, was intended to promote economic growth and job creation in the Canary Islands, in particular by improving the economic infrastructure and social facilities, encouraging relocation of

appropriate productive activities and developing the area's endogenous potential. The main measures included transport and telecommunications systems to contribute to reducing the isolation of the islands; water and electricity supply; water treatment and purification of industrial waste water; improvement of care and hospital facilities; measures to encourage the production and services sector and provision of infrastructure to support economic activity; development of tourism (in particular in qualitative terms); development of the rural environment and fisheries; provision of infrastructure for the education system and human resource development.

As regards the ESF, the funds allocated EUR 545 million for 1989-1999 went largely towards technical vocational training and lifelong learning, integration and re-integration of the unemployed, with the result of considerably reducing their numbers. For 2000 and 2001, a total of EUR 79 million was set aside.

Under the EAGGF (Guidance Section), a total of EUR 133 million was spent on operations in the Canaries in the period 1991-2001, including: an Objective 1 operational programme, a programme under the Leader (I, II and +) Community Initiative and part of a REGIS (I and II) Community Initiative (Table 2). An ex post evaluation of the Objective 1 operational programme for the period 1994-1999 is under way. The recent assessment of the Leader II programme by the Spanish authorities concluded that it had a very positive effect.

A specific figure is given for the Community initiative REGIS, with a global amount of EUR 342 million for the period 1989-1999, which had a particular role to play in the Canary Islands, by strengthening the local and urban development, the SMEs and technical assistance.

Between 1991 and 2001, the FIFG contributed approximately EUR 96 million to restructuring the Canary Islands' fishing fleet, developing aquaculture and modernising the fish processing industries in the framework of the adaptation of capacity to available resources.

Finally, the Cohesion Fund has been in operation in Spain since 1993. Until 1999, total allocations from this fund for projects in the Canary Islands amount to EUR 263 million.

The current evidence, as shown by different evaluation reports, as well as by the figures about GDP increase and fall in unemployment (Table 4), indicates a significant contribution of the various funds to the economy. There has also been clear progress in infrastructures development contributing to offset the structural deficit of the archipielago. In the current programming period 2000-2006, significant additional resources, estimated at over EUR 2 700 million, have been allocated by the Structural Funds to the Canary Islands.

EAGGF (Guarantee Section) (Common organisation of the markets and Poseican).

Agricultural production in the Canary Islands benefits fully from the CAP:

- via the common organisation of the markets, and

- the provisions of the Poseican programme set up in 1992 (Council Regulation (EEC) No 1601/92 of 15 June 1992 concerning specific measures for the Canary Islands with regard to certain agricultural products(1)), which aims to adjust Community policies to take account of the specific problems faced by the Islands.

The expenditure on common organisation of the markets relates mainly to the market in bananas, with total expenditure of EUR 829 million out of EUR 871 million between 1994 and 2001 (see Table 3).

As regards the agricultural measures taken as part of the Poseican programme, these have compensated to a large extent for the constraints on agriculture in the Canary Islands due to their remoteness:

- the special supply arrangements provide for exemptions from levies and/or customs duties for essential agricultural products for human consumption or local processing, imported from non-member countries, and for grants for the supply of such products from Member States; total expenditure for the period 1993-2001 was EUR 213 million for plant products and EUR 616 million for animal products (see Table 3);

- moreover, direct aid for local agricultural production, with a view to increasing its competitiveness, totalled EUR 67 million and EUR 33 million for plant and animal products respectively, between 1999 and 2001 (see Table 3).

In 1999, the impact of these measures was evaluated in detail. The Commission report on the measures to implement Article 299(2) of the EC Treaty(2) sets out the results of this assessment, which were broadly positive. The purpose of the Commission proposal drawn up on the basis of this evaluation was to simplify, consolidate and improve the existing framework by making the necessary adjustments. This proposal resulted in the adoption of Council Regulation (EC) No 1451/2001 of 28 June 2001 amending Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector(3).

Overall performance, GDP per inhabitant and unemployment

Concerning the impact of the Community aid on gross domestic product (GDP) and increased employment in the Canary islands, there is no detailed evaluation available. Whilst this aid clearly has had, as mentioned, a positive impact on the socio-economic situation, at this stage it is not possible to distinguish it clearly from that of other factors notably national and regional policies, such as taxation regimes, social benefit schemes or labour market policies. It also has to be borne in mind that despite the presence of Community support, the growth performance in the region will depend on macroeconomic evolutions. The drastic deceleration in GDP growth per capita from 1992 to 1996 shows the effect of an international financial crisis. Nevertheless, the robust growth rates and strong fall in unemployment during the years 1995 to 1999 indicate that the situation in the Canaries has been improving markedly during the period of implementation of the special programmes by the Community, while these have most likely cushioned the negative impact of the adverse economic climate.

Table 4 shows the developments in GDP and employment since 1991. The GDP per capita in relation to the Community's average is not recorded prior to 1995, as the methodology of calculation was changed and figures are therefore not comparable. GDP per head (index EU-15 = 100) has increased from 75 % in 1995 to 77 % in 1998, and unemployment fallen from 22 % in 1989 (24 % in 1991) to 14,5 % in 1999.

A copy of the tables has been sent direct to the Honourable Member and to the Secretariat-General of the Parliament.

(1) OJ L 173, 27.6.1992.

(2) COM(2000) 147 final.

(3) OJ L 198, 21.7.2001.