Communication from the Commission to the European Parliament and the Council - The European Community response to the flooding in Austria, Germany and several applicant countries - A solidarity-based initiative
Date: 2002-08-28
Institutions: European Commission
Subjects: EU Member State, EU action, EU aid, Structural Funds, flood, natural disaster

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 28.8.2002
COM(2002) 481 final

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

THE EUROPEAN COMMUNITY RESPONSE TO THE FLOODING IN AUSTRIA,
GERMANY AND SEVERAL APPLICANT COUNTRIES

A solidarity-based initiative

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

THE EUROPEAN COMMUNITY RESPONSE TO THE FLOODING IN
AUSTRIA, GERMANY AND SEVERAL APPLICANT COUNTRIES

A solidarity-based initiative

TABLE OF CONTENTS

1.

2.

3.

4.

5.

6.

7.

8.

Introduction...................................................................................................................3

Financial measures for Member States.........................................................................4

Financial Measures for Applicant Countries Affected .................................................6

Agriculture....................................................................................................................7

Legal measures .............................................................................................................8

Coordinating and preventive Measures ........................................................................9

Proposal for an EU Disaster Relief Fund .....................................................................9

Conclusion ..................………………………………………………………………11

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1. 

INTRODUCTION

The recent flooding in central Europe has been of unprecedented proportions. It is too
early yet to draw up a definitive estimate of the extent and cost of the damage, but it is
obvious  that  it  is  very  extensive  –  dozens  of  people  have  lost  their  lives,  the  socio-
economic  infrastructure  of  entire  regions  has  been  disrupted  and  the  natural  and
cultural heritage has been damaged. Some very preliminary estimates indicate damage
amounting  to  €  15  billion  in  Germany,  €  2  billion  in  Austria,  between  €  2  and  3
billion in the Czech Republic and up to € 35 million in Slovakia.

This  communication  describes  briefly,  for  the  benefit  of  the  public,  the  European
Parliament  and  the  Council,  the  action  that  the  European  Commission  has  already
taken  or  proposes  to  take  to  come  to  the  aid  of  the  Member  States  and  applicant
countries  whose  citizens,  farmers,  workers,  business  people  and  communities  have
suffered in the recent catastrophic floods.

Much  of  this  action  involves  the  reallocation  of  existing  resources  and  is  relatively
easy to implement.  But  a  strong  feeling  has  developed  in  the  course  of  the  last  few
weeks  in  favour  of  additional  European  Community  action.  To  this  end  the
Commission is proposing the creation of an EU Disaster Relief Fund.

Solidarity

We are a community of peoples on the path to closer union. It is only right and natural
therefore  that  the  citizens,  Member  States  and  Community  Institutions  feel  a
spontaneous  urge  to  show  their  sympathy  for  the  victims  of  the  floods  through
practical gestures of financial solidarity in particular.

Causes of the catastrophe

This communication focuses on the short to medium-term action that the Community
can take to help the Member States and the applicant countries concerned make good
the damage done by the recent catastrophic flooding. However, looking to the longer-
term, the Commission believes that the dramatic events of the last few weeks should
make  us  reflect  on  how  such  a  catastrophe  came  to  pass.  Over  and  above  the
exceptional climatic conditions of the last few weeks, we need to examine the extent
to which human intervention has contributed to these problems, in particular through
the continuing emission of high levels  of  greenhouse  gases  and  inadequate  land-use
and  water-management  policies.  At  a  time  when  world  leaders  are  assembling  in
Johannesburg  to  agree  on  measures  to  promote  sustainable  global  development,
renewed  commitment  to  further  concrete  action  in  this  direction  by  the  Union  and
other major players is more than ever necessary.

The European Community's response

As  soon  as  the  extent  of  the  catastrophe  became  apparent,  the  Commission  –  its
President,  individual  Commissioners  and  its  departments  –  contacted  and  began

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discussing  Community  aid  with  the  national  and  regional  authorities  concerned  in
both the Member States and the applicant countries affected.

The European Parliament too has voiced its concern and has promised to process with
maximum urgency proposals which require the approval of the Budgetary Authority.

The  Council  of  Ministers also shares this  sense  of solidarity  with  the  victims  of  the
flooding  and  of  the  urgency  of  Community  action.  The  Danish  Presidency  has
convened a special meeting of Member States' representatives for the 29 August 2002
to discuss what measures the Union could take.

The European Community's solidarity-based response is twofold:

– 

– 

on the one hand, using the possibilities offered by existing Community laws
and instruments, particularly in the fields of the Structural Funds, agriculture
or aid to candidate countries (to which could be added EIB loans). Meetings
are already scheduled with the national and regional authorities concerned in
order to evaluate all these possibilities more precisely;

on  the  other  hand,  creation  of  an  "EU  Disaster  Relief  Fund"  with
mobilisation procedures specifically adapted to respond to the consequences
of major catastrophes by rapidly mobilising new resources.

In  the  following  section  the  document  sets  out  in  general  terms  certain  factual  data
and measures already undertaken and measures to be taken.

2. 

FINANCIAL MEASURES FOR MEMBER STATES

Structural Funds

Existing  Community  credits  already  allocated  to  the  regions  and  Member  States
concerned  can  be  redirected  to  flood-related  measures  by  modifying  existing
programmes in order to target support on the restoration effort. Member States have
three possibilities open to them:

– 

– 

– 

Concentrating  funds  on  flood-related  measures  in  affected  regions  within
existing  measures  under  on-going  Operational  Programmes/Single
Programming Documents.

Creating new measures that would allow expenditure for flood-related action,
in particular to rebuild damaged infrastructure and for productive investment
in  companies,  to  replace  destroyed  equipment  and  for  special  training  and
occupational schemes and other human-resources related measures.

Shifting funds from other measures and priorities to the appropriate existing
or newly  created  measures  including,  where  necessary,  between  funds.  The
precise amount of available funds has to be assessed by the national, regional
and  local  authorities  who  are  responsible  for  the  selection  of  the  projects
cofinanced by the structural funds.

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As  regards  the  application  of  the  so-called  “n+2  rule”  on  automatic  decommitment,
the  possibility  exists  in  cases  of  force  majeure,  which  includes  large  scale  natural
disasters with serious consequences for implementation of the assistance provided by
the  structural  funds,  to  make  available  again  the  commitment  appropriations
corresponding to the decommitment carried out pursuant to the second sub-paragraph
of Article 31(2) of Council Regulation 1260/1999 (if the under-execution was due to
flooding).

Future action

The Commission will make every effort to take the necessary decisions regarding the
modification of the Programmes within the shortest possible time. The Member States
and regions can adapt their priorities and where necessary inform the Commission and
request  modifications  to  existing  programmes.  Moreover,  resort  to  the  performance
reserve (4%) will be examined.

In certain cases, the Managing Authorities of the Programmes concerned may adjust
the  programme  complements  within  the  limits  set  by  Article  34.3  of  Council
Regulation 1260/1999 under their own responsibility.

Trans-European networks (TEN)

Approximately € 11 million under the TEN- Transport budget and € 5.9 million under
the TEN-Energy budget have not yet been allocated and could, in principle, be freed
to support the reconstruction of TEN projects damaged by the floods in Germany and
Austria.  In  addition,  in  the  Multi-Annual  Indicative  Programme,  €  79.7  million  are
earmarked  for  German  projects  and  €  14.4  million  for  Austrian  projects.  These
amounts  could  be  redirected  to  specific  reconstruction  projects  at  the  request  of
Germany and Austria.

Future action

The Commission will, on receipt of requests from Austria and Germany, submit them
to  the  TEN  Financial  Committee  and,  if  approved,  process  them  as  quickly  as
possible.

EIB

The  EIB  is  currently  examining  a  proposal  for  the  fast  implementation  of  its
announced Flood Disaster Relief Plan. The Bank proposes to make available from its
own resources, as soon as possible, € 1 billi on of loans for flood disaster relief. The
loans  would  have  maturities  of  up  to  30  years,  would  be  provided  on  the  finest
possible  terms  and  could,  in  exceptional  circumstances,  finance  up  to  100%  of  the
cost  of  individual  projects.  Global  loans  to  finance  SMEs  would  be  part  of  the
programme.  The  objective  would  be  to  make  loans  immediately  available  by
distributing them through a limited number of the EIB's existing intermediaries.

Future action

The EIB will submit the proposal to its Board for approval on 19 September 2002.

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3. 

FINANCIAL MEASURES FOR APPLICANT COUNTRIES AFFECTED

ISPA

The Commission will allocate to the Czech Republic up to € 48 million of unallocated
ISPA  2002  money  towards  flood  relief,  under  more  favourable  and  flexible
conditions. In particular, as already foreseen in Regulation 1267/99 of 21 June 1999
for exceptional circumstances and in conformity with procedures laid out therein, the
Commission  will  increase  the  ceiling  on  public  aid  to  75%  and  the  Community
contribution  to  85%  for  relevant  projects  in  areas  affected  by  exceptional  natural
disasters.

The Commission can allocate to Slovakia several million euros of unallocated ISPA
2002  funds  towards  flood  relief,  under  the  same  more  favourable  and  flexible
conditions.

The  Commission  will  make  available  to  both  countries  by  the  second  week  of
September  funds  from  ISPA  for  technical  assistance  to  finance  100%  damage
assessment and project design to help accelerate disbursement of the € 76 million. The
first projects could start during the fourth quarter.

PHARE

The  Commission  will  make  immediately  available  to  the  Czech  Republic  an
additional  €  9.75  million  from  the  PHARE  2003  reserve  under  more  flexible
conditions.

SAPARD

The Commission has made advances of €  5.5 million to the Czech Republic and of €
4.6  million  to Slovakia.  The  Commission  will,  in  case  of  need,  immediately  double
the advances mentioned above.

Future action

The Commission will submit proposals to the other EU institutions for a modification
of Regulation 1268/1999 in order to increase the ceiling on public aid to 75% and the
Community  contributions  to  85%  for  relevant  projects  in  areas  affected  by
exceptional natural disasters.

The  Commission  is  prepared  to  consider  as  eligible,  on  request  from  affected
applicant  countries,  actions  which  aim  at  restoring  rural  areas  following  flood
damage, and that with retroactive effect.

The  Commission  will  on  request  make  the  SAPARD  implementation  rules  more
flexible to allow funds to flow rapidly to the areas where most needed.

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4. 

AGRICULTURE

Derogation in respect of set-aside use in certain Community regions

The Commission has already authorised the use for feeding purposes of land set aside
under the arable crop scheme from 9 August 2002 onwards on condition that at least
33% of the forage area of the holding has been flooded in certain regions of Germany,
Austria, Ireland and the UK.

Advance in direct payments for arable crops

The  Commission  has  already  proposed  to  the  Cereals  Management  Committee  to
allow Germany to pay 50% in advance to producers affected by floods in certain areas
from 1 September 2002 and before 15 October 2002 at the latest.

Future action

Should subsequent developments require an extension of the action, the Commission
will propose to the Management Committee to modify the regulation accordingly on
29 August 2002.

Use of intervention stocks of cereals

Austria has requested that interventions stocks be made available at special prices for
animal producers, to compensate for forage losses due to flooding.

Future action

Following  the vote in  the Management Committee  foreseen  for 29  August  2002  the
Commission  will authorise the available  cereals  intervention stock in Austria  (about
32.000  tonnes)  to  be  made  available  by  the  Austrian  authorities  to  the  affected
producers by the end of September 2002.

Rural development

The  Council  Rural  Development  Regulation  1257/1999  already  includes  specific
measures  to  help  restore  agricultural  and  forestry  production  potential.  It  is  for
Member States/regions to decide which measures to insert in their programmes.

The  Commission  implementing  rules  (445/2002)  already  include  specific  provisions
for  cases  of  force  majeure  including  natural  disasters  such  as  the  current  flooding.
This will permit flexible handling of cases where beneficiaries of rural development
measures  face  difficulties  in  respecting  eligibility  conditions  for  their  support  (e.g.
stocking densities, agri-environment obligations) due to flood damage.

Future action

The  Commission  will  adopt  a  more  flexible  and  fast-track  process  to  approve
modifications  such  as  an  increase  in  the  Community  co-financing  rate  or  the  aid
intensity for beneficiaries affected by the flooding. It could agree to derogate from the
current  limit  of  one  programme  modification  per  year  to  permit  an  exceptional

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modification to programmes in areas affected by the flooding. In these circumstances,
the  Commission  will  consider  expenditure  under  newly  introduced  measures  as
eligible  from  the  date  of  receipt  of  an  official  request  from  a  Member  States/region
concerned rather than from the date of receipt of a fully detailed proposal.

The Commission is ready, at the  request  of  the Member  States  affected,  to  examine
and submit to the competent Management Committee further specific derogations to
the administrative requirements of the existing Commission implementing provisions
for rural development measures in order to facilitate the restoration effort.

5. 

LEGAL MEASURES

State aids

Compensation  can  be  up  to  100%  of  the  material  damage  caused  by  the  flood.
Individual  aid  as  well  as  aid  schemes  are  compatible.  Since  all  damage  which  has
arisen can be compensated for, compensation could also include previously awarded
aid the effects of which would have been "washed away".

As  regards  compensation  for  more  indirect  forms  of  damage  caused  by  the  floods,
e.g., production  delays because  of  electricity  cuts,  difficulties  in  delivering  products
due  to  blockage  of  certain  transport  routes,  where  a  clear  causal  link  between  the
damage and the flood can be established, full compensation is possible.

Under the so-called de minimis rule, aid of up to € 100,000 over any three year period
is not covered by the Community State aid rules. This may be of particular relevance
for smaller  companies.  Furthermore, public funding  for  general  infrastructure  works
such as roads and bridges is not covered by State aid rules.

Future action

The Commission will do its utmost to simplify and speed up the procedures. Member
States affected by the floods should as quickly as possible establish informal contacts
with  the  Commission  and  notify  the  intended  measures;  this  will  speed  up  the
Commission's decision-making process.

Public procurement

The directives and the EC Treaty allow a flexible application of the rules concerning
public contracts in cases of natural disasters.

Future action

Where contracts fall within the scope of the Directives, the Commission would point
out that there are two derogations to the standard procedures:

– competitive tendering with reduced deadlines;

–  negotiated  procedure  without  prior  publication  of  a  contract  notice  in  the  Official
Journal.

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6. 

COORDINATING AND PREVENTIVE MEASURES

Civil Protection

The  Commission  activated  the  Monitoring  and  Information  Centre  (MIC)  for  civil
protection  and  since  14  August  2002  it  has  been  channelling  information  and
coordinating  assistance  (pumps,  vaccines  etc.)  to  the  affected  areas.  The  Seveso
contact points have also been alerted and they have provided specific information on
the situation regarding chemical plants in Germany and the Czech Republic.

Future action

The  Commission  will  adopt  an  integrated  European  strategy  on  prevention,
preparedness and response to natural, man-made and other risks, as announced in its
work programme for 2002.

A European flood alert system

The  Commission  has  developed  a  flood  simulation  system  (LISFLOOD)  enabling
forecasts between two and 10 days ahead and simulation of the impact of preventive
measures in catchment areas.

Future action

The Commission will provide scientific support for a European flood warning system
containing  information  on  the  main  European  basins  and  with  real-time  access  to
medium-term meteorological forecasts.

7. 

PROPOSAL FOR AN EU DISASTER RELIEF FUND

In the event of a major disaster the victims expect the EU – as a community of values
and solidarity – to render assistance. Therefore the Commission proposes to create a
new  Disaster  Relief  Fund  to  assist  affected  regions  in  Member  States  and  countries
involved  in  accession  negociations  in  the  event  of  major  natural,  technological  and
environmental  disasters.  In  addition,  the  creation  of  a  specific  EIB  facility  could  be
envisaged as a complement to the Relief Fund.

Aim, scope and functioning of the Relief Fund

EU aid must be complementary to the efforts of the countries concerned and should
be used to cover a share of the public  expenditure caused  by the disaster. The Fund
should  provide  emergency  relief  action  for  any  area  affected  by  a  major  disaster,
independently  from  its  status  under  the  Structural  Funds.  The  amount  of  support
would be related to the size of the disaster but could also take into account the relative
prosperity of the region(s) concerned.

As discussed in Berlin, the Fund would be set up so as to be operational as quickly as
possible and should make available at least € 500 million in a first phase. The Fund
could be extended to the countries with which accession negotiations are under way.

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Action from the Fund should primarily focus on the following two areas:

1. 

2. 

Short  term  reconstruction  of  destroyed  infrastructures  in  the  fields  of
electricity,  water/waste  water,  telecommunications,  transport  and  social
infrastructures, including temporary shelter.

Immediate securing of damaged preventive infrastructures such as dams and
dikes.

Money from the Relief Fund would be granted on request by the affected country as a
global  relief  grant  on  the  basis  of  a  tripartite  agreement  between  the  European
Commission, the country and the affected region(s).

The  existence  of  a  disaster  of  European  scale  and  the  amount  of  the  aid  would  be
decided by the budgetary authority (this can be done quickly) upon a proposal by the
Commission. The implementation of the global relief grant, in particular the selection
of individual projects to be assisted, would be carried out under the responsibility of
the  country  and  the  regions  concerned.  The  Fund  would  be  subject  to  the  normal
Community rules on financial aid including issues of control.

Setting up a reserve inside the EC budget

The  setting  up  of  a  new  Fund  in  the  EC  budget  requires  two  steps:  to  create  an
instrument  to  make  the  money  available  (either  a  new  relief  reserve  or  a  new
flexibility  instrument)  and  to  define  a  new  operational  budgetary  line  to  which  the
money  would  be  transferred  for  implementation.  The  latter  needs  the  adoption  of  a
legal basis.

– 

A new relief reserve

A  new  reserve,  similar  to  the  emergency  aid  reserve  existing  for  third  countries,
would  be  created  under  Heading  6  of  the  Financial  Perspectives  (reserves),  the
resources  for  which  would  be  called  only  in  case  of  mobilisation.  This  would
necessitate  a  revision  of  the  Interinstitutional  Agreement  (IIA)  and  its  annexed
Financial Perspectives.

– 

A new flexibility instrument

Through  a  new  flexibility  instrument  for  disasters  it  would  be  possible  to  address
unforeseen  and  exceptional  circumstances  while  maintaining  the  ceilings  of  the
overall  Financial  Perspectives  of  Berlin.  Such  a  new  instrument  would  be  set  up
simply  by  a  revision  of  the  IIA,  in  which  the  rules  for  its  mobilisation  would  be
determined.  The  necessary  resources  would  also  be  called  only  in  case  of
mobilisation. Therefore, its establishment may  be lighter  from  a  procedural  point  of
view as it does not require a modification of neither the Own Resources Decision nor
the Regulation on Budgetary Discipline.

In  order  to  be  operational  as  quickly  as  possible,  the  Commission  recommends
following the approach of creating a new flexibility instrument. An amount of at least
€  500  million  should  therefore  be  available  already  in  2002  as  a  tangible  and
immediate  expression  of  European  solidarity  towards  those  affected  by  the
catastrophe. Should this approach be chosen for the medium term, the annual amount

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should  be  not  less  than  €  500  million  and  coul d  be  set  at  up  to  €  1  billion.  In  the
framework  of  the  next  financial  perspectives,  consideration  could  be  given  to  other
options and mechanisms.

– 

Creating a legal basis

It  will  be  necessary  for  the  Council  and  the  Parliament  to  adopt,  following  a
Commission  proposal,  a  legal  act  establishing  the  operational  modalities  and  the
criteria for the implementation of the facility.

– 

Budget lines to implement the global relief grant

The  new  budget  lines  could  be  located  in  Heading  2  of  the  Financial  Perspectives
(structural  actions),  it  being  understood  that  the  normal  ERDF  programming  rules
would  not  apply,  or  in  Heading  3;  and  in  Heading  7  for  countries  involved  in
accession negotiations.

Mobilisation of the Fund in 2002

the  new 

the  creation  of 

three  decisions  are  needed:  an
instrument, 
For 
interinstitutional  agreement  between  Parliament,  Council  and  the  Commission,  the
adoption of a legal basis and the creation of new budget lines. These procedures are
feasible  and  it  would  be  possible  to  complete  them  within  a  relatively  short
timeframe,  provided  that  all  institutions  give  a  top  priority  to  this  initiative.  Fresh
money  would  be  made  available  through  a  supplementary  budget  which  takes  few
weeks to be adopted by the Budgetary Authority.

Future action

Discussions with the Budgetary Authority:

September 2002

Proposals:

September 2002

8. 

CONCLUSION

This  communication  stresses  the  willingness  and  the  readiness  of  the  European
Commission  to  help  in  a  spirit  of  solidarity  those  Member  states  and  applicant
countries which are suffering from the flood catastrophe.

As  a  first  step  and  with  a  view  to  the  urgency  of  the  measures  to  be  taken,  the
communication proposes in the short term mobilising financial resources, in particular
the  reallocation  of  structural  fund  and  other  aid  resources.  The  Commission  sees  as
well the importance of ensuring flexibility and simplified administrative procedures as
far as possible.

The  Commission  is  aware  that  at  this  stage  not  all  problems  can  be  solved  in  a
satisfying manner. Specific decisions and initiatives will be subject to later legislative
and administrative proposals submitted to the College for approval in due course and
according to the appropriate procedures.

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To enable the Community to intervene more easily in the case of major disasters, the
Commission  proposes  the  creation  of  a  EU  Disaster  Relief  Fund.  The  Fund  would
then dispose of at least € 500 million  and could be operational before the end of the
year.

In the longer term, the Commission will promote in close cooperation with Member
States measures for improved prevention of natural disasters.

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