Opinion of the Economic and Social Committee on the "Future strategy for the outermost regions of the European Union"
Date: 2002-05-29
Institutions: European Economic and Social Committee
Subjects: economic development, peripheral region, social development

17.9.2002

EN

Official Journal of the European Communities

C 221/37

Opinion of the Economic and Social Committee on the ‘Future strategy for the outermost regions
of the European Union’

(2002/C 221/10)

On 31 May 2001, acting under Rule 23(3) of its Rules of Procedure, the Economic and Social Committee
decided to draw up an opinion on the ‘Future strategy for the outermost regions of the European Union’.

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 7 May 2002. The
rapporteur was Mrs Lo´ pez Almenda´riz.

At its 391st plenary session of 29 and 30 May 2002 (meeting of 29 May), the Economic and Social
Committee adopted the following opinion with 103 votes in favour and 3 abstentions.

1.

Introduction

1.1.
The outermost regions — i.e. the French overseas
departments, the Azores, Madeira and the Canary Islands —
are full members of the European Union, but at the same time
present their own unique characteristics.

1.2.
Each of these regions is characterised by a series of
geographical, physical and historical factors that handicap its
economic and social development.

As

recognised

in
under
1.3.
Article 299(2) (1)of the Treaty, these regions are characterised
by the permanence and combination of a series of factors,

Community

Law

( 1) Article 299(2):

The provisions of this Treaty shall apply to the French overseas
departments, the Azores, Madeira and the Canary Islands.
However, taking account of the structural social and economic
situation of the French overseas departments, 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, acting
by a qualified majority on a proposal from the Commission and
after consulting the European Parliament, shall adopt specific
measures aimed, in particular, at laying down the conditions of
including
application of the present Treaty to those regions,
common policies.
The Council shall, when adopting the relevant measures referred
to in the second subparagraph, take into account 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 Community programmes.
The Council shall adopt the measures referred to in the second
subparagraph taking into account the special characteristics and
constraints of the outermost regions without undermining the
integrity and the coherence of
the Community legal order,
including the internal market and common policies.

such as remoteness, insularity and small size (except Guiana),
their topography, population density and economic depen-
dence on a small number of economic activities.

1.4.
The outermost regions therefore bear additional costs
compared to the rest of the EU and this, in turn, prevents them
from participating fully in the internal market. It is to be
hoped, though, that the success of the euro will contribute to
the integration of these regions, both among themselves and
with the rest of Europe.

1.5.
The outermost regions suffer from major underdevel-
opment compared to other regions in the EU. Despite improve-
ments in certain areas over the years, thanks largely to
is still
Community aid, the degree of underdevelopment
significant due to the structural, permanent and severe handi-
caps imposed by their remoteness.

1.6.
Owing to their strategic geographical location near
other continents, the outermost regions are also the EU’s
outermost external border; this brings many opportunities,
but many uncertainties.

2. Legal and administrative framework of Community

action in the outermost regions

2.1.
The particular situation of the outermost regions,
which has always been recognised by the EU, is covered by
Article 299(2) of the Treaty of Amsterdam.

In 1986 the European Commission set up an interde-
2.2.
partmental group for the outermost regions composed of
representatives from several Directorates-General. This group,
which is attached to the European Commission’s Secretariat
General and falls under the authority of the Commission
President, is responsible for coordinating Community action
to help these regions and for acting as an intermediary with
the national and regional authorities concerned.

C 221/38

EN

Official Journal of the European Communities

17.9.2002

2.3.
In due course, the European Commission decided to
adopt a joint approach to these regions through its pro-
grammes of options specific to the remote and insular nature
of the outermost regions (Posei): Poseidom for the French
overseas departments (Martinique, Guadeloupe, Guiana and
Réunion); Poseican for the Canary Islands and Poseima for
Madeira and the Azores.

2.3.1.
The Posei programmes are based on the dual prin-
ciple that the outermost regions are part of the European
Community but have their own specific regional features. They
have led to greater flexibility in certain common policies and
the adoption of specific measures for these regions, without
undermining the principle of the coherence and unity of
Community law;
their objective is economic and social
cohesion.

However, in its March 2000 report (1), the European
2.4.
Commission itself recognised that this approach is insufficient
and partial and needs to be reinforced.

2.5.
The European Commission recognises that, in light of
the major changes that enlargement and globalisation will
bring, Community action to help the outermost regions needs
to be better targeted, more flexible and more effective.

The accession of new Member States with a per
2.5.1.
capita GDP much lower than the Community average will
effectively mean that the underdevelopment of the outermost
regions within the EU will appear to fall in relative terms. This
could result in Community aid being redirected towards the
future new Member States of Eastern Europe.

2.6.
In the aforementioned report, the European Com-
mission points out that Article 299(2) marks the beginning of
a new phase in the Community’s approach to the outermost
regions. It is a quantum leap forward compared with the
previous approach and must be followed by a strategy of
sustainable development for these regions.

The conclusions of the Lisbon, Feira, Nice, Göteburg and
Laeken Councils urged the Council of Ministers to begin
discussing concrete proposals for implementing specific poli-
cies concerning the outermost regions.

2.7.
In addition to the European Commission, the European
Parliament and the Committee of the Regions also wished to
express their views on how to implement Article 299(2) in
such a way that it meets its objective, helps reduce discrepan-
cies between the outermost regions and the rest of the EU, and
ensures that the outermost regions can benefit from the single
market under the same conditions.

( 1) COM(2000) 147 final: Commission report on the measures to
implement Article 299(2). The outermost regions of the European
Union.

Similarly, the European Economic and Social Com-
2.8.
mittee hopes
to implement
to help define measures
Article 299(2), so that they are part of a genuine strategy of
sustainable development for the outermost regions and help
these regions become fully integrated into the European Union.

3. Grounds for adopting specific measures

3.1.
The situation of the outermost regions is acknowledged
in Article 299(2) of the Treaty. In its March 2000 report, the
European Commission recognises that this article provides a
single common legal basis for specific measures to help the
outermost regions.

3.1.1.
In the aforementioned report, the European Com-
mission clarifies that the list of areas in which the Council may
adopt specific measures for the outermost regions is not
exhaustive. The various areas mentioned are therefore subject
to future changes in Community policies.

3.2.
Article 299(2) is a new phase in the Community
approach towards the outermost regions. This new approach,
which has nothing to do with the transitional period towards
full European integration which some of these regions are
undergoing, will lead to the adoption of specific measures in
the future. This new phase is an authentic quantum leap in the
Community approach to the outermost regions insofar as in
the future this approach must be based on a global strategy for
the outermost regions.

3.3.
Common policies must be adapted to the structural
and permanent nature of the factors characterising outermost
regions, and Article 299(2) is the appropriate legal basis for
achieving this objective. This must be the legal basis for
drawing up a specific regime without jeopardising the coher-
ence of Community law and the internal market.

It should be pointed out

3.3.1.
that under the Posei
programmes common policies were made more flexible and
specific measures for the outermost regions were adopted,
without ever jeopardising the coherence of Community law
and the internal market.

The outermost regions are fragile and suffer from
3.3.2.
specific difficulties of a permanent nature, in particular major
underdevelopment, very high rates of unemployment and a
high degree of insecurity according to type of work. Conse-
quently, far from having a negative impact on the functioning
of the internal market, the specific measures adopted for these
regions aim to put them on an equal footing with the rest of
the EU and to achieve cohesion.

17.9.2002

EN

Official Journal of the European Communities

C 221/39

3.4.
The European Commission itself recognised in its
March 2000 report that rather than simply answering the
it will assess
specific requests submitted by these regions,
which aspects of the outermost regions require attention
before drawing up any Community legislation.

3.4.1.
In the future — and in the context of enlargement in
particular — Community action to help the outermost regions
must therefore continue and increase, as the outermost regions
will still be at a disadvantage owing to their remoteness.

4. Specific comments

5. Proposals and recommendations

The Committee believes that

5.1.
the European Com-
mission must honour the commitments it made in its March
2000 report and give Article 299(2) the weight it merits as an
appropriate legal basis for drawing up exemptions from
general Community law so as to offset the disadvantages
suffered by outermost regions on account of their remoteness
and thereby promote their development.

5.2.

The Committee believes that:

— there is an urgent need for the EU to develop a
comprehensive strategy for the outermost regions, speci-
fying the guiding principles, the objectives sought and
the resources available, and laying down a timetable for
the measures to be adopted;

4.1.
The Committee regrets that the new regulations gov-
erning the Structural Funds for the period 2000-2006 do not
take account of the remoteness criterion for the inclusion of
these regions in Objective 1.

— this need is even more pressing against the backdrop of
globalisation and enlargement, which will move the EU’s
centre of attention eastwards;

4.2.
Regarding Structural Fund eligibility beyond 2006, the
Committee believes that Article 299(2) is a sufficiently solid
legal basis for using criteria that are a better reflection of the
situation of the outermost regions than a merely statistical
criterion such as per capita GDP.

4.3.
The Committee is concerned that the European Com-
mission, despite the intentions expressed in its March 2000
the operational
report,
possibilities implicit in Article 299(2), in particular in some
areas of Community policy, as the scale of the development
challenge facing the outermost regions demands.

in practice is not developing all

— there must be a new phase in the Community approach
to the outermost regions — a quantum leap from its
traditional approach and an appropriate legal basis for
allowing exemptions from and adjustments to general
Community law to help the outermost regions, and for
drawing up a genuine Community policy for these
regions;

— the remoteness criterion must be included at all stages of

implementation of Community policy.

5.3.
The Committee thus considers it essential to draw up
a non-exhaustive list of measures — set out below — to
serve as guidelines for action. It thus urges the European
Commission:

4.4.
The Committee is concerned because the European
Commission seems reluctant to use this article when submit-
ting specific proposals to the Council to help these regions. In
doing so, it considerably limits the scope of this article, using
it instead as a residual provision.

5.3.1.
To propose specific measures to help the outermost
regions based on Article 299(2). Given that the factors affecting
outermost regions are permanent and structural, no time-
limits should be put on these specific measures, though they
may be subject to regular checks.

4.5.
The Committee believes that, far from being a residual
is a specific legal basis for the
provision, Article 299(2)
outermost regions, the main objective of which is to promote
development in these regions.

5.3.2.
To take account of the specific characteristics and
needs of the outermost regions when drawing up all Com-
munity legislation and to assess the impact of the legislation
concerned on these regions; likewise, to take account of the
criterion of remoteness at all stages of implementation of
Community policies.

C 221/40

EN

Official Journal of the European Communities

17.9.2002

5.3.3.
To consider remoteness as sufficient grounds for
including the outermost regions in the sphere of application
of Article 87(3)(a) of the EC Treaty, particularly with regard to
the implementation arrangements for state aid for regional
purposes.

5.3.8.
To ensure a level playing field for imported and local
products and to consider, among other measures, consolidat-
ing and strengthening the agriculture chapter of the Posei
to guarantee that sufficient funds are available, improving
conditions for re-export and dispatch of processed products
produced from raw materials, and ensuring the stability of aids
by setting a minimum level of aid.

5.3.4.
To promote access for the outermost regions to
Community programmes and to give preferential treatment to
projects involving them.

5.3.5.
To begin studying the role of the outermost regions
in the new regional context in preparation for post-2006
regional policy reform, taking into account the provisions of
Article 299(2). In its second report on Cohesion, the European
Commission recognises that the outermost regions are particu-
larly fragile and therefore a priority for Community action.
The Committee calls on the Commission also to take account
of criteria more suited to the situation of the outermost regions
than per capita GDP, both in this study and when drawing up
eligibility criteria for the Structural Funds under the new
regional policy.

5.3.6.
To implement specific measures for the outermost
regions as part of the reform of the Common Fisheries Policy,
the
indefinitely maintain regimes intended to offset
e.g.
increased cost of marketing certain fishery products, with
periodic updates with regard to species, imports and quotas;
introduce specific arrangements for the fleet in these regions
under the Financial Instrument for Fisheries Guidance (FIFG);
implement a policy of conserving, managing and researching
fisheries resources in these regions; broaden and extend the
special arrangements for importing fishery products not found
in these regions; and earmark funds for regular assessment of
fish at
fisheries resources, recognition of new species of
Community level and specific aids, such as those relating to
private storage, carry over and trade organisations.

5.3.7. With regard to agriculture, to adapt the common
market organisations (CMO) to the specific characteristics of
farm products in the outermost regions, in particular those
CMOs which have the most direct impact on these products
(e.g. bananas, fruit and vegetables, flowers and plants, dairy
products, beef, goat/sheep meat, sugar, wine, rice, etc.), either
in the framework of the Posei programmes or through specific
recognition within the CMOs themselves. Also, so as not to
jeopardise the survival of traditional agricultural products in
the outermost regions, to ensure that the blueprint for future
reform of the CAP takes due account of the special features of
agriculture in these regions, the most salient of which are their
dependence on a small number of products and the lack of
real possibilities for diversification.

5.3.9.
To reinforce and consolidate the CMO for bananas
so as to ensure continued income guarantees for Community
producers. Likewise, to maintain the quota system, abandon
the introduction of the flat tariff system from 2006 and, prior
to any significant change to the current system, to carry out
an in-depth analysis of the likely impact on producers in the
outermost regions.

5.3.10.
In view of the highly specialised nature of agri-
culture in the outermost regions, to adopt new measures to
promote the competitivity of agricultural products from these
regions, such as tomatoes, flowers, plants and fruit, which
have to compete with similar products from nearby areas
which have association agreements with the EU, such as
Morocco, or which have their own preferential systems, such
as the ACP countries; also, in this connection, to establish the
customs measures necessary to guarantee strict compliance
with the quotas established under these bilateral agreements in
order to safeguard the balance provided for with regard to the
levels of third-country production that may enter the European
Union without causing market dysfunction.

5.3.11.
To promote the establishment of safeguard clauses
providing for the possibility of measures to protect the markets
of the outermost regions where the development of their
economies is threatened by imports of certain products
benefiting from tariff preferences or cooperation agreements
with third countries.

5.3.12. With regard to taxation, to allow the outermost
regions to continue to enjoy differentiated tax arrangements,
which are necessary for the economic development of these
regions.

5.3.13. With regard to customs, to maintain tariff exemp-
tions on the import of certain products that are important for
the economies of the outermost regions, and to introduce
exemption and free circulation status for all products produced
in the outermost regions through sufficient processing of raw
materials originating from third countries as a means of
compensating for the EU’s policy of tariff preferences for
third countries, the absence of economies of scale and the
remoteness of the outermost regions from centres of industrial
activity.

17.9.2002

EN

Official Journal of the European Communities

C 221/41

5.3.14. With regard to transport, to draw up appropriate
mechanisms and procedures to ensure that the outermost
regions are properly integrated into all aspects of the common
transport policy which affect development in these regions; to
start assessing the potential impact of the liberalisation of the
transport markets on the outermost regions, and to continue
its efforts to include projects in these regions in trans-European
transport networks. Likewise, the Committee calls on the
European Commission to discuss in depth the possibility of a
specific framework for state aid and services of general
economic interest with regard to transport to and within the
outermost regions.

5.3.20.
In relation to SMEs and the development of new
productive activities and services, to consider the following
measures: promoting the development of measures conducive
to a climate of initiative and entrepreneurship in the outermost
regions; bolstering financial resources through the use of
financial
initiatives and programmes (risk capital, mutual
guarantee schemes, etc.); helping SMEs to access these sources
of funding with a view to removing obstacles to their creation
and growth; promoting knowledge and use of EIB loans and
risk capital operations; improving the exchange of experience
and good practice regarding measures to support SMEs.

5.3.15. With particular regard to the transport sector, to
speed up promulgation of the directive on the liberalisation of
port services, which is necessary to reduce the cost of supplying
these regions, considering,
in turn, the need to integrate
remoteness into all aspects of the common transport policy
which affect
in accordance with the
commitments entered into by the Commission in its March
2000 report.

their development,

5.3.16.
To consider introducing mechanisms to guarantee
public funding for transport infrastructure in the outermost
regions, adopting specific public transport programmes and
making the public service obligation more flexible in these
regions to enable them to tackle problems connected with
routes, frequency, quality of service, timetables and the costs
of sea and air transport, in order to alleviate the problem of
their dual insularity.

5.3.17. With regard to energy,
to bear in mind that
exploiting the potential of renewable energy and setting up
energy transport networks in the outermost regions improves
economic stability and energy efficiency and helps achieve the
objectives of sustainable development; but that, owing to the
volume of financial resources needed by projects in such areas,
the outermost regions should be allowed to apply for multiple
European sources of funding.

5.3.18.
To drive forward liberalisation of the energy mar-
kets, adopt safeguards to guarantee tariffs equal to or lower
than those in mainland Europe and to promote priority access
for the outermost regions to horizontal energy programmes.

5.3.21.
To take account of Article 299(2) when drawing up
eligibility criteria for Community horizontal programmes. The
outermost regions have frequently been unable to benefit from
these programmes as they are tailored to the characteristics
and needs of mainland regions, which are very different to
those of the outermost regions.

To help develop the potential of human resources
5.3.22.
in the outermost regions, in particular by supporting measures
in the spheres of education and vocational
training for
businesspeople and workers and ensuring implementation of
the Structural Funds in the sphere of employment.

5.3.23.
To consider introducing a range of measures to
help alleviate the effects of illegal immigration in the outermost
regions, given their situation on the outermost borders of the
Community.

5.3.24.
Given that the information society and technologi-
cal innovation are a real opportunity to alleviate some of the
disadvantages suffered in outermost regions, to give these
regions priority when taking initiatives in these fields; thus, to
establish in the outermost regions a series of regional integrated
R&D and innovation strategies aimed at increasing significantly
the participation of these regions in Community framework
R&D programmes, to promote research in the main economic
sectors in the outermost regions through technology transfer
initiatives and projects taking account of the particular charac-
teristics of these regions, and to promote the availability of
specific R&D infrastructure, for example in relation to the
exploitation of natural resources and astronomical research,
taking advantage of the specific geographical and climatic
features of the outermost regions.

5.3.19.
Concerning the environment, to facilitate access to
European funding for environmental management infrastruc-
ture and introduce adjustments and derogations to horizontal
environmental rules, whilst bearing in mind the position of
the outermost regions as part of the natural environment.

5.3.25. With regard to telecommunications, to apply the
new regulatory framework fully to the outermost regions, in
particular access to infrastructure (the international, national
and local networks),
loop and
application of a non-discriminatory tariff policy.

liberalisation of the local

C 221/42

EN

Official Journal of the European Communities

17.9.2002

5.3.26.
To take the necessary action to help the outermost
regions cooperate with neighbouring third countries. Such
cooperation is practically impossible under the INTERREG III
Community initiative owing to a lack of coordination between
the Community financial instrument (ERDF) and the financial
instruments for cooperation with third countries (MEDA, EDF).
Such action must also cover aspects related to trade, which
will require the development of strategies for breaking into the
markets of neighbouring third countries. Action of this kind
could help to alleviate some of the difficulties derived from the
lack of economies of scale in these very small regional markets.
To draw up, each year, a precise timetable of actions
5.3.27.
it intends to take to implement Article 299(2) and a biannual

Brussels, 29 May 2002.

report evaluating the results obtained in the previous six-
month period.

5.3.28.
To reinforce the European Commission’s interde-
partmental group and give it sufficient human and operational
resources to be able to continue developing, under optimum
conditions, its work of coordination, follow-up and initiative.
This would give the interdepartmental group in general,
and its president in particular, greater room for manoeuvre
between different units within the Commission that might be
involved in matters connected with the outermost regions.

The President

of the Economic and Social Committee

Göke FRERICHS