Proposal for a Council Regulation establishing the European Union Solidarity Fund
Date: 2002-09-18
Institutions: European Commission
Subjects: EU financial instrument, accession to the European Union, aid to disaster victims, economic support, emergency aid, natural disaster

31.12.2002

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Official Journal of the European Communities

C 331 E/347

Proposal for a Council Regulation establishing the European Union Solidarity Fund

(2002/C 331 E/51)

COM(2002) 514 final — 2002/0228(CNS)

(Submitted by the Commission on 18 September 2002)

EXPLANATORY MEMORANDUM

Need for a new emergency instrument

The recent flooding in central Europe has been on an almost unprecedented scale in recent history. The
extent and cost of the damage 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.

Other disasters of dramatic proportions — of a similar or different nature — have occurred in the past;
unfortunately they cannot be excluded for the future. While Community instruments are in place to assist
in the event of a disaster elsewhere in the world no comparable instruments exist within the Member
States themselves.

We are a community of peoples on the path to closer union. At the same time the Union is preparing for
enlargement in the very near future. In the event of a major disaster it is only right and natural that the
citizens, Member States and countries with which accession negotiations are under way, as well as the
Community Institutions, feel a spontaneous urge to show their sympathy for the victims through practical
gestures of financial solidarity in particular.

With this proposal for a Council Regulation the Commission therefore proposes to create a new European
Union Solidarity Fund to assist affected regions in Member States and other countries involved in accession
negotiations in the event of major natural, technological and environmental disasters.

Wide support

The European Parliament too has voiced its concern and has promised to process proposals which require
the approval of the Budgetary Authority with maximum urgency. At its plenary sitting on 3 September
2002 in Strasbourg it expressed its full support for the creation of a special Community instrument to
intervene in the case of disasters in Member States or candidate countries.

The Council also shares this sense of solidarity with the victims of the flooding and of the urgency of
Community action. At the special meeting of Member States’ representatives on 29 August 2002 convened
by the Danish Presidency to discuss what measures the Union could take they unanimously supported the
idea of creating a specific Community instrument to respond to the consequences of major disasters by
rapidly mobilising new resources.

The European Union Solidarity Fund

The Solidarity Fund should be essentially different
from the Structural Funds and other existing
It should be focused on giving immediate financial assistance to help the
Community instruments.
people, regions and countries concerned return to living conditions that are as normal as possible. Its
scope should therefore be limited to the most urgent needs. The longer-term reconstruction of infra-
structure and businesses must be left to other instruments.

EU aid should be complementary to the efforts of the countries concerned and be used to cover a share of
the public expenditure caused by the disaster. The Fund should provide emergency relief for any area
affected by a major disaster, independently of 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 other potential sources of
finance.

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The principle of subsidiarity also applies in the event of disasters. Action by the European Union appears
only necessary and justified in cases of major dimension. This reasoning is reinforced by the scarcity of
supplementary budget resources.

Money from the relief fund would be given in response to a request from the affected country as a single
grant on the basis of an agreement between the European Commission and the country and — where
appropriate — the affected region(s) or localities.

The existence of a major disaster justifying action at EU level and the amount of the aid would be
proposed by the Commission to the budgetary authority (this can be done quickly). The implementation
of the aid, 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.

Making funding available

Setting up a new Fund in the EC budget requires two steps: creating an instrument to make the money
available and defining new operational budget lines to which the money can be transferred for implemen-
tation. The latter requires the adoption of a legal basis.

— A new flexibility instrument

On 11 September 2002 the Commission adopted the proposal for a new flexibility instrument for disasters
which would make it possible to address unforeseen and exceptional circumstances and which determines
the rules for its mobilisation. The corresponding expenditure shall be entered in the budget over and above
the relevant headings in the financial perspectives.

— Creating a legal basis

The Council and the Parliament will need to adopt, on a Commission proposal, a legal act establishing the
operational modalities and the criteria for the implementation of the facility. This is the objective of the
present proposal for a Council Regulation.

THE COUNCIL OF THE EUROPEAN UNION,

financial assistance to contribute to a rapid return to
normal living conditions in the disaster-stricken regions.

Having regard to the Treaty establishing the European
Community,
third paragraph of
Article 159 and Article 308 thereof,

and in particular

the

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social
Committee,

Having regard to the opinion of the Committee of the Regions,

Whereas:

(2) Existing economic and social cohesion instruments are
able to finance risk-prevention measures and the repair
of damaged infrastructure. However, provision should also
be made for an instrument which enables the Community
to act swiftly and efficiently to help, as quickly as
to meet
in mobilising emergency services
possible,
people’s
the
to
contribute
immediate
short-term restoration of damaged key infrastructure so
that economic activity can resume in regions hit by a
major disaster.

needs

and

(3) The European Union should also show solidarity with the
countries currently negotiating their accession. Extending
this Regulation to cover those countries entails recourse
to Article 308 of the Treaty.

(1) In the event of major natural, technological or environ-
mental disasters, the Community must show its solidarity
with people in the regions concerned by providing

(4) Community aid should be complementary to the efforts
of the countries concerned and be used to cover a share
of the public expenditure committed to dealing with the
damage caused by a major disaster.

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(5) In line with the principle of subsidiarity, assistance under
this instrument should be confined to major natural, tech-
nological and environmental disasters with serious reper-
cussions on living conditions, the natural environment or
the economy.

least one of

(6) A major disaster within the meaning of this Regulation
the states
in at
shall mean any disaster,
concerned, resulting in important damage expressed in
financial terms or as a percentage of the GDP. In order
to permit interventions in the case of disasters that, while
important do not reach the minimum scale required, and
under very exceptional circumstances, assistance can also
be granted whenever a substantial part of the population
of the region or the state concerned is affected by a
disaster.

(7) Community action should not relieve third parties of

responsibility or discourage preventive measures.

(8) This instrument should allow a rapid decision to be taken
to commit specific financial resources and mobilise them
as quickly as possible.

institutional,

(9) It may be desirable, in conformity with the specific consti-
tutional,
legal or financial context of the
beneficiary state and of the Community, to associate the
regional or local authorities with the formal agreement on
implementation arrangements,
state
remaining in all cases responsible for the implementation
of the assistance and for the management and control of
the operations supported by Community financing.

beneficiary

the

(10) The detailed rules for applying this instrument should be

adapted to the urgency of the situation.

for

(11) An operation funded by this instrument should not
benefit
the same purpose from assistance under
Council Regulation (EC) No 1164/94 of 16 May 1994
establishing a Cohesion Fund (1), Council Regulation (EC)
No 1260/1999 of 21 June 1999 laying down general
provisions on the Structural Funds (2), Council Regulation
(EC) No 1257/1999 of 17 May 1999 on support for rural
development from the European Agricultural Guidance
and Guarantee Fund (EAGGF) (3), Council Regulation
(EEC) No 3906/89 of 18 December 1989 on economic
aid to the Republic of Hungary and the Polish People’s
Republic (4), Council Regulation (EC) No 1267/1999 of

(1) OJ L 130, 25.5.1994, p. 1. As last amended by Regulation (EC)

No 1265/1999 (OJ L 161, 26.6.1999, p. 62).

(2) OJ L 161, 26.6.1999, p. 80. As last amended by Regulation (EC) No

1447/2001 (OJ L 198, 21.7.2001, p. 1).

(3) OJ L 160, 26.6.1999, p. 80.
(4) OJ L 375, 23.12.1989, p. 11. As last amended by Regulation (EC)

No 2500/2001 (OJ L 342, 27.12.2001, p. 1).

21 June 1999 establishing an Instrument for Structural
Policies for Pre-accession (5), Council Regulation (EC) No
1268/1999 of 21 June 1999 on Community support for
pre-accession measures for agriculture and rural devel-
opment in the applicant countries of central and eastern
Europe in the pre-accession period (6), Commission Regu-
lation (EC) No 2760/98 of 18 December 1998 concerning
the implementation of a programme for cross-border
PHARE
cooperation
programme (7)
(EC) No
1266/1999 of 21 June 1999 on coordinating aid to the
applicant countries in the framework of the pre-accession
strategy and amending Regulation (EEC) No 3906/89 (8).

framework

Regulation

Council

the

the

or

of

in

(12) Maximum transparency is required in implementing the
Community’s financial assistance as well as proper moni-
toring of the use of resources.

(13) Prudent financial management is required to ensure that
the Community can be in a position to respond if several
major disasters occur in the same year.

(14) Depending on the availability of funds, provision should
be made for possible supplementary grants to guarantee
appropriate financial assistance from this instrument for
disaster-stricken sections of the population.

(15) A deadline should be laid down for the use of

the
financial assistance awarded and provision should be
made for the beneficiary states to justify the use made
of the assistance they receive.

(16) In view of the exceptional circumstances, countries hit by
disasters from summer 2002 onwards should qualify for
assistance under this instrument,

HAS ADOPTED THIS REGULATION:

Article 1

A European Union Solidarity Fund, hereinafter referred to as
the Fund, is hereby established to enable the Community to
respond in a rapid, efficient and flexible manner to emergency
situations on the terms of this Regulation.

(5) OJ L 161, 26.6.1999, p. 68.
(6) OJ L 161, 26.6.1999, p. 8. As last amended by Regulation (EC) No

2500/2001 (OJ L 342, 27.12.2001, p. 1).

(7) OJ L 345, 19.12.1998, p. 49.
(8) OJ L 161, 26.6.1999, p. 68.

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Article 2

1.
At the request of a Member State or country involved in
accession negotiations with the European Union, hereinafter
referred to as beneficiary state, assistance from the Fund may
be mobilised when a major natural, technological or environ-
mental disaster with serious repercussions on living conditions,
the natural environment or the economy in one or more
regions or one or more countries occurs on the territory of
that state.

2.
A major disaster within the meaning of this Regulation
shall mean any disaster resulting, in at least one of the states
in
concerned,
2002 prices, or more than 0,5 % of its GDP.

in damage estimated at over EUR 1 billion,

Under very exceptional circumstances, can be included any
disaster affecting a substantial part of the population of the
region or state concerned.

Article 3

1.
Assistance from the Fund shall take the form of a grant.
For each recognised disaster a single grant shall be awarded to
a beneficiary state.

Assistance

2.
countries
affected by the same disaster. This case could give rise to
grants in favour of the different states concerned.

also cover neighbouring

shall

3.
The aim of the Fund is to help the beneficiary state to
carry out the following essential measures, depending on the
type of disaster:

— immediate restoration to working order of infrastructure
and plant in the fields of energy, water and waste water,
telecommunications, transport, health and education;

— providing temporary accommodation and funding rescue
the people

the immediate needs of

to meet

services
concerned;

— immediate

and
measures of immediate protection of the cultural heritage;

securing of preventive

infrastructures

— cleaning up of disaster-stricken natural zones.

Article 4

1.
As soon as possible and no later than two months after
the first damage caused by the disaster, a state may submit an
application for assistance from the Fund to the Commission
taking account of, among other factors:

(a) the scale of the disaster;

(b) the estimated cost of the operations referred to in Article 3;

(c) any other sources of Community and national

funding,
including private funding, which might contribute to the
costs of repairing the damage.

On the basis of this information, and any clarifications to
2.
be provided by the state concerned,
the Commission shall
determine the amount of any possible grant as quickly as
possible within the limits of the financial resources available.
However, this grant must leave available 25 % of the annual
amount allocated to the Fund up to 1 October each year.

The Commission ensures an equitable treatment of requests
presented by the states.

The Commission shall submit to the budgetary authority
3.
the proposals needed to mobilise the corresponding appro-
priations. Once
the
appropriations
Commission shall adopt a grant decision and shall pay that
grant immediately and in a single instalment to the beneficiary
state upon signature of the agreement referred to in Article 5.

available,

the

are

The eligibility of expenditure shall begin on the date

4.
referred to in paragraph 1.

Article 5

institutional,
In conformity with the specific constitutional,
legal or financial provisions of the beneficiary state and of
the Community, the Commission and the beneficiary state,
and, where appropriate, the regional or local authorities, shall
conclude an agreement to implement the decision to grant
financial assistance. That agreement shall describe in particular
the type and location of operations to be financed by the Fund.

The Commission shall ensure that the same commitments as
entered into by the Member States under this Regulation are
also entered into by countries negotiating their accession to the
European Union within the
relevant
agreements and instruments.

framework of

the

for

individual

operations

and
Responsibility
selecting
lie with
implementing the grant under the agreement shall
in compliance with the terms of this
the beneficiary state,
Regulation, the grant decision and the agreement. The bene-
ficiary state shall exercise this responsibility without prejudice
to the Commission’s responsibility for the implementation of
the general budget of the European Union and in accordance
with the provisions of the Financial Regulation applicable to
shared or decentralised management.

Article 6

1.
The beneficiary state shall be responsible for coordinating
the contribution of the Fund to the operations referred to in
Article 3, on the one hand, with assistance from the EIB and
other Community financing instruments on the other.

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Operations assisted under

this Regulation shall not
2.
from assistance from the Funds and instruments
benefit
governed by Regulations
(EC) Nos 1164/94, 1260/1999,
1257/1999, 1267/1999 and 1268/1999, and Regulations
(EEC) No 3906/89 and (EC) No 2760/98, and shall comply
with Regulation (EC) No 1266/1999. The beneficiary state
shall ensure compliance with this provision.

Article 7

Operations financed by the Fund shall be compatible with the
provisions of the Treaty and instruments adopted under it, with
Community policies and measures and with pre-accession
assistance instruments.

grant at the request of the beneficiary state. This request is
supported by new elements, notably a significantly higher
valuation of the damages incurred. The supplementary grant
shall be awarded on the same terms as the initial grant.

Article 11

therefrom shall provide

The financing decisions and all agreements and contracts
resulting
the
Commission, through the Anti-Fraud Office (OLAF), and for
on-the-spot checks to be carried out by the Commission and
the Court of Auditors,
in accordance with the appropriate
procedures.

checks

for

by

Article 8

Article 12

A grant shall be used within two years of the date on which
the grant decision is notified. Any part of a grant remaining
unused by that deadline, in compliance with the terms of this
Regulation, shall be recovered by Commission from the bene-
ficiary state.

Each year the Commission shall present
to the European
Parliament and to the Council a report on the assistance
granted from the Fund. This report shall contain information
on the assistance granted in the previous year and on the
assistance granted in preceding financial years for which the
individual operations have been closed.

No later than six months after the expiry of the two-year
period from the date of notification of the grant decision the
beneficiary state shall present a report on the financial
execution of the grant with a statement justifying the expen-
diture, indicating any other source of funding received for the
measures
settlements and
compensation from third parties. The report shall detail the
preventive measures introduced or proposed by the beneficiary
state in order to limit damages and to avoid, to the extent
possible, a reoccurrence of similar disasters.

including insurance

concerned,

At the end of this procedure, the Commission shall wind up
the assistance from the Fund.

Where the cost of repairing the damage is subsequently met by
a third party, the Commission shall require the beneficiary state
to reimburse a corresponding amount of the grant.

Article 9

Applications for assistance and the decisions to grant assistance
from the Fund, as well as the financial agreement, reports and
any other related documents shall express all amounts in euro.

Article 13

Notwithstanding the deadline provided for in Article 4(1) of
this Regulation, the Member States and countries negotiating
their accession to the European Union which have been hit by
disasters from 1 August 2002 onwards may request assistance
from the Fund within two months of the date of entry into
force of this Regulation.

Article 14

This Regulation does not prejudice
Community or
compensation of specific damages.

international

instruments

the

application of
relating to the

Article 15

The Council shall review this Regulation on the basis of a
proposal from the Commission by 31 December 2006 at the
latest.

Article 10

In exceptional circumstances, having regard to the specific
nature or intensity of a disaster and the financial resources
available, notwithstanding Article 3(1) the Commission may,
within one year of the grant decision, provide a supplementary

This Regulation shall enter into force on the day following its
publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.

Article 16