Report from the Commission on implementation of Article 299(2) of the EC Treaty: measures to assist the outermost regions
Date: 2002-12-19
Institutions: European Commission
Subjects: Canary Islands, EU aid, EU regional policy, French overseas department and region, Madeira, common agricultural policy, common fisheries policy, economic and social cohesion

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 19.12.2002
COM(2002) 723 final

REPORT FROM THE COMMISSION

on implementation of Article 299(2) of the EC Treaty: measures to assist the outermost
regions

   
1.

INTRODUCTION

Since  the  adoption  of  the  Commission's  report  of  14 March  2000  on  measures  to
implement Article 299(2) of the EC Treaty concerning the outermost regions1, it has
sent  the  European  Council  a  report  every  six  months  assessing  the  situation  and
reviewing the measures to be adopted to offset the serious and permanent handicaps
affecting these regions and assist their socio-economic development. These measures
remain  essential  because  the  development  of  the  outermost  regions  is  still  lagging
behind, even though these measures have undoubtedly helped reduce the gap.

Paragraph 58 of the conclusions of the Seville European Council of 21 and 22 June
2002  invited  the  Council  and  the  Commission  to  press  ahead  with  implementing
Article 299(2) of the Treaty and to adopt suitable proposals for these regions' special
needs  to  be  taken  into  account  through  the  various  common  policies,  in  particular
transport  policy,  and  in  the  reform  of  regional  policy.  In  this  connection,  the
European  Council  asked  the  Commission  to  submit  a  new  report  on  those  regions,
built  on  a  global,  coherent  approach  to  the  special  characteristics  of  their  situation
and to ways of addressing them.

During  the  second  half  of  2002,  the  Commission  continued  the  work  it  had  begun
with  the  March  2000  report.  It  took  note  of  the  conclusions  of  the  June  2002
European  Council  and  established  the  instruments  to  prepare  the  planned  general
report  and  any proposals required. The Commission  also  pursued  the  partnership  it
had  established  with  the  outermost  regions  and  took  steps  to  ensure  continued
coordination of its initiatives within its own departments.

This  report  is  not,  however,  the  general  report  updating  the  one  adopted  in  March
2000  as  suggested  by  the  Seville  European  Council  but  the  six-monthly  report
reviewing  the  measures  adopted  under  the  various  Community  policies  during  the
second half of 2002. The report requested by the Seville European Council can only
be generated from the agreements and discussions with the outermost regions and the
memoranda which the Member States concerned intend to submit to the Commission
during  the  first  half  of  2003.  Nor  can  such  a  report  present  a  global  strategy,  as
suggested  by  the  Seville  European  Council,  unless  it  includes  the  guidelines  to  be
determined  during  2003  on  the  institutional  future  of  Article 299(2)  and  the
definition of regional policy from 2006.

It  is  against  that  background  that  this  report  reviews  the  most  significant  recent
stages in developments concerning the outermost regions  during the  second  half  of
2002; at the end of 2003 it will be supplemented by a general report as proposed at
the Seville European Council.

It should also be noted that the Community takes account of the concerns relating to
Article 299(2) EC through its policies based on other articles of the Treaty and these
will be reflected in this report. Since the purpose of this report is not to specify the
legal basis for Community instruments to be adopted in the future, the developments
below should be interpreted without prejudice to the determination of the legal basis
for the instruments to whose adoption reference is made.

1

COM(2000) 147 final.

2

                                                
2.

2.1.

TRADITIONAL PRODUCTS

In  the  area of  agriculture, recent developments include  as  a  major  feature  the
Commission’s  communication  on  the  mid-term  review  of  the  common
agricultural policy (MTR)2. The aim of the planned reform of agriculture is to
respond to the new challenges which have arisen in recent years and to complete
the  reform  process  begun  in  1992  and  continued  through  Agenda 2000.  This
reform seeks to raise the profile of the rural development pillar of the common
agricultural policy while de-emphasising market management.

The outermost regions are anxious to know what the impact of this reform will be on
them.  The  Commission  would  like  to  stress  in  response  that  it  will  adopt  the  most
appropriate arrangements for taking account of their particular situation, both in the
mid-term review and in the implementation of the CAP in general. The measures to
implement this reform should be clarified in the first half of 2003.

As regards changes in the measures concerning traditional products, the Commission
notes  that  in  2001  the  Council  adopted  the  regulations  concerning  the  agricultural
aspect  of  the  POSEI  schemes3  laying  down  the  reform  process  for  supporting
agriculture in the outermost regions. The Commission implemented these reforms in
2001 and 2002.

Particular mention should be made of the market organisation for three  agricultural
products in the outlying regions: rice, sugar and bananas.

Under the mid-term review, the Commission intends to present the Council with new
measures concerning rice.

In  the  case  of  sugar,  the  new  Regulation  adopted  by  the  Council  in  2001  and  the
special  measures  under  the  POSEI  regulations  apply  and  the  guarantees  for
production and prices extended until 2006 under these arrangements also support the
production  of  beet  and  cane  in  the  outermost  regions.  The  Commission  intends  to
present the Council in 2003 with a report on possible new guidelines for this policy
from 2006.

The  questions  concerning  bananas  relate  to  the  import  into  the  Community  of
bananas from non-member countries, the common organisation of the market and the
scheme of compensatory aid for production.

As  regards  imports  from  non-member  countries,  the  agreement  with  the  United
States and Equator in 2001 stabilised trade, allowed the compensatory aid scheme to
continue and provided for movement to a tariff system from 2006. Its entry into force
was  decided  by  Council  Regulation  (EC)  No 2587/2001  of  19 December  2001
amending Regulation (EEC) No 404/93 on the common organisation of the market in
bananas4. Under Article 32  of  Regulation  (EEC)  No 404/935,  the  Commission  is  to

2

3

4

5

Commission communication of 28 July 2002 (COM(2002) 394 final).
Council Regulations (EC) Nos 1452/2001 (Poseidom), 1453/2001 (Poseima) and 1454/2001 (Poseican)
of  28 June  2001,  OJ  L  198,  21.7.2001,  pp.  11,  26,  57;  Council  Regulation  (EC)  No 1455/2001  of
28 June 2001, OJ L 198, 21.7.2001, p. 54 and Council Regulation (EC) No 1447/2001 of 28 June 2001,
OJ L 198, 21.7.2001.
Regulation (EC) No 2587/2001 of 19.12.2001, OJ L 345, 29.12.2001, p. 13.
Regulation (EEC) No 404/93 of 13.2.1993, OJ L 47, 25.2.1993, p. 1.

3

                                                
present a report to  the European Parliament and the Council by  31 December  2004
on the operation of the market organisation for bananas together with any proposals
required  and  will  make  proposals  to  the  Council  in  good  time  for  the  fixing  of
customs duties for the tariff-only regime, to begin no later than 1 January 2006.

Compensatory aid to Community producers of bananas continues to guarantee their
incomes.  The  system  of  compensatory  aid  has  demonstrated  its  effectiveness  by
providing  producers  with  a  guaranteed  income  for  fixed  quantities.  To  cope  with
recent falls in banana prices and to support the income of Community producers in
this situation, the Commission proposed an increase in advance payments to banana
producers to the Management Committee in November 2002. This proposal was well
received  but  the  producers’  request  for  supplementary  payments  cannot  be
contemplated before 2003.

As regards the structural derogations in agriculture, the regulations adopted in June
2001  led  to  requests  from  the  Member  States  concerned  which  caused  the
Commission to amend the programming. For the Portuguese autonomous regions of
the Azores and Madeira, this principally  entailed  an increase in the level of  aid  for
certain types of measures (maximum of 75% for investments in agricultural holdings
and  in  firms  engaged  in  the  processing  and  marketing  of  agricultural  products),  an
increase  in the  amounts  of  aid (for  the measure to protect lakes  in the  Azores)  and
more  flexible  conditions  for  support  for  forestry  (eligibility  of  all  public
administration bodies). Furthermore, the Community contribution rose from 35% to
50% of the total eligible cost for investments in small firms  and  from  75%  to  85%
for  agri-environmental  measures.  In  the  case  of  the  Canary  Islands,  the  increase  in
the  IOP  raises  the  level  of  aid  (maximum  of  75%)  for  measures  concerning
investments  in  small  firms  engaged  in  processing  and  marketing  local  agricultural
products.

responsible 

guaranteeing 

Turning  to  fisheries,  work  on  reform  of  the  common  fisheries  policy6  in  the
second  half  of  the  year  was  the  main  feature  of  2002.  This  should  result  in  a
policy  able  to  ensure  the  sustainable  development  of  the  sector,  in  both
environmental  and  economic  and  social  terms  and  through  the  adoption  of
measures 
and
competitiveness  and  a  reasonable  standard  of  living  for  those  dependent  on
fisheries. To that end, in its communication of 28 May, the Commission set out a
programme  of  measures  which,  while  stressing  the  need  to  ensure  the
sustainability of resources and application of the principles of good governance,
includes  proposals  for  new  arrangements  to  conserve  and  manage  resources,
improved technical measures for conservation, a new approach to fleet support
policy,  a  new  regulatory  framework  to  monitor  activities,  new  strategies  for
aquaculture and distant-water fishing and steps to improve the social dialogue.

economic 

viability 

fishing, 

2.2.

The  work  preparing  for  the  reform  of  the  CFP  has  always  taken  account  of  the
special  features  of  the  outermost  regions  because  of  the  importance  of  this  sector
there. In this connection, it should be noted that the Green Paper on the future of the
CFP7  refers  to  the  approach  to  be  used  in  designing  measures  for  conserving  and

6

7

Commission  communication  on  the  reform  of  the  common  fisheries  policy  of  28 May  2002
(COM(2002) 181 final).
COM(2001) 135 final of 20 March 2001.

4

                                                
managing  resources  (the  need  to  modulate  the  measures,  where  necessary,  in  the
light of the special features of each region, by taking account of differences in their
resources) or as regards improving the social and economic dimension of the CFP to
support these regions (commitment to table proposals and, if appropriate, adopt new
measures).  This  approach  was  set  out  explicitly  in  the  document  which  the
Commission  sent  to  the  Seville  European  Council  on  the  implementation  of
Article 299(2) EC.

The Commission’s detailed discussions with representatives of the fishing industry in
these regions about their special characteristics will enable their specific situations to
be  taken  into  consideration,  in  line  with  its  commitments  on  this  aspect,  once  the
reform of the common fisheries policy is implemented.

The  Commission  continues  to  scrutinise  national  aid  to  the  fisheries  sector  in  the
light  of  the  guidelines  adopted  in  20018,  which  contain  a  specific  reference  to  the
outermost regions.

The Commission completed its work on evaluating the implementation of the system
of  compensation  for  the  additional  costs  incurred  as  a  result  of  remoteness  for  the
marketing of fisheries products from the Azores, Madeira, the Canary Islands and the
French  departments  of  Guiana  and  Réunion,  which  had  been  extended  until
31 December 20029, and preparation of an appropriate proposal for this scheme from
1 January 2003.

As  regards  the  structural  derogations,  it  should  be  noted  that  Council  Regulation
(EC)  No 2792/1999  laying  down  the  detailed  rules  and  arrangements  regarding
Community structural assistance in the fisheries sector was amended10 to adjust the
limits applying to the Financial Instrument for Fisheries Guidance in the light of the
particular difficulties of the outermost regions. On that basis, during the second half
of 2002 the Member States concerned amended their programming complements for
those regions.

3.

THE INSTRUMENTS TO SUPPORT ECONOMIC DEVELOPMENT

The  socio-economic  parameters  in  the  Second  Report  on  Economic  and  Social
Cohesion  and  the  annual  adjustment  of  the  figures  contained  in  it  show  that  the
outermost regions have evolved in different ways.

From  1995  to  1999,  per capita  GDP  compared  with  the  Community  average
(EUR=15)  changed  as  follows:  Canary  Islands  up  from  75%  to  79%,  Guadeloupe
unchanged at 56%, Martinique up from 63% to 65%, French Guiana down from 59%
to 52%, Réunion down from 53 to 48%, Azores up from 50% to 53%, Madeira up
from 63% to 71%.

During that same period the economies of the Canary Islands and Madeira converged
with  the  rest  of  the  Union  while  the  other  regions  did  not,  either  remaining  at  the
same level or, in the cases of French Guiana and Réunion, falling further behind.

8

9

10

OJ C 19, 20.1.2001, p. 7.
Council Regulation (EC) No 579/2002, OJ L 89, 5.4.2002, p. 1.
Council Regulation (EC) No 1451/2001 of 28 June 2001, OJ L 198, 21.7.2001, p. 9.

5

                                                
3.1.

The disparities among the outermost regions in terms of per capita GDP will remain
identical in the event of enlargement to 27 Member States. This result is based on a
static analysis/projection using the latest available statistics on per capita GDP, those
for 1997, 1998 and 1999.

Trends in employment show similar divergences.

The  situation  is  very  bad  in  Réunion,  French  Guiana  and  Guadeloupe,  where  the
unemployment rates in 2001 were as follows: Réunion, 33.3% out of a population of
713 000;  French  Guiana,  20.5%  out  of  a  population  of  158 000;  Guadeloupe,  29%
out of a population of 426 000; Martinique, 26.3% out of a population of 383 000.

The  position  is  still  difficult  in  the  Canary  Islands  at  13.1%  out  of  a  population  of
1 658 000.

By  contrast,  the  situation  looks  better  in  the  Azores  (2.2%  out  of  a  population  of
234 000) and Madeira (2.8% out of a population of 240 000).

The  disparities  on  this  parameter  would  also  remain  the  same  in  the  event  of
enlargement.

Regional  policy  makes  a  very  substantial  contribution  to  the  socio-economic
development  of  the  outermost  regions.  Besides  qualifying  for  Community
assistance  under  Objective 1  (a  priority  objective  of  cohesion  policy),  these
regions receive special attention from the Commission because of their specific
handicaps.  This  concern  was  demonstrated  recently  by  the  inclusion  of  a
qualitative  criterion  in  the  recent  Council  Regulation  (EC)  No 2012/2002
establishing  the  European  Union  Solidarity  Fund11.  As  proposed  by  the
Commission,  Article 2  defining  what  is  meant  by  ‘natural  disasters’  adds  a
qualitative criterion to the quantitative criteria based on the amount of damage
or the percentage of gross national income. This qualitative criterion is based on
the impact on the population of the region affected by the natural disaster or on
the  threat  to  the  economic  stability  of  the  region.  This  is  important  for  the
outermost regions, where the damage due to a natural disaster might not satisfy
the  quantitative  criteria  laid  down.  That  is  also  the  reason  why  this  provision
explicitly states that there will be particular focus on remote or isolated regions,
such as the island regions and the outermost regions defined in Article 299(2) of
the Treaty.

The special features of the outermost regions were also highlighted recently through
a  study  carried  out  for  the  Commission  on  the  socio-economic  situation  of  island
regions,  particularly  the  outermost  regions,  which  were  the  subject  of  a  specific
section within the study. The Commission is currently considering the results of this
study, which will, if necessary, be supplemented by  other studies in preparation for
the report on the general strategy for the outermost regions to be prepared in 2003.

These  analyses  and  studies  will  contribute  to  the  Commission’s  reflections  on  the
future  of  regional  policy.  While  the  resources  and  scope  for  measures  to  assist
economic and social cohesion are already fixed until 2006, the advent of enlargement
in the very near future will mean a thorough rethinking of this policy.

11

Council Regulation (EC) No 2012/2002 of 11 November 2002, OJ L 311, 14.11.2002, p. 3

6

                                                
The Commission has therefore been  conducting a very broad-based  debate  with  all
regional,  local  and  voluntary  bodies  on  the  future  of  cohesion  policy.  This  debate
will be pursued and should lead to proposals that need to be fair and objective and to
take account, in particular, of the specific handicaps of the outermost regions.

3.2.

The Commission notes that the concept of remoteness was incorporated into the
rules on state-aid schemes in 2000 as part of an amendment to the Guidelines on
national regional aid12.

3.3.

That amendment makes explicit reference to Article 299(2) EC and enables operating
aid to be granted in the outermost regions which benefit from the derogation under
Article 87(3)(a)  and  (c)  of  the  Treaty.  The  rules  on  assessing  the  compatibility  of
such aid with the common market are more favourable than those applied in regions
not  regarded  as  remote  or  under-populated  and  in  particular  allow  operating  aid
which is neither degressive nor limited in time.

Most  of  the  aid  schemes  notified  concerning  the  outermost  regions  have  been
approved by the Commission following a preliminary examination culminating in the
adoption of a decision to raise no objections, with no formal examination procedure
being opened.

The Commission took note of the ‘Resolution on state aids’ adopted in La Palma in
October  2002  by  the  Presidents  of  the  outermost  regions,  and  in  particular  their
invitation to  the Commission  to continue  considering ways  of adapting  the rules to
meet the specific needs of the outermost regions.

During 2002, the Commission tabled several draft measures on taxation which
resulted  in  Council  instruments.  On  20 June  the  Council  adopted  a  decision
authorising the Spanish authorities,  until  31 December  2011,  to  lay  down  total
exemptions from or reductions of the local tax “Arbitro sobre las Importaciones
y  Entregas  de  Mercancías  en  las  Islas  Canarias”  (AIEM)  for  certain  products
produced  locally  and  listed  in  the  annex  to  the  decision.  These  exemptions  or
reductions  may  not  result  in  differences  in  excess  of  5%,  15%  or  25%  of  tax
exemptions,  depending  on  the  product13.  This  decision  was  the  result  of
consideration of the specific handicaps of manufacturing firms in these regions
and the need to support sectors producing goods to ensure the diversification of
economic activity.

As  regards  the  French  overseas  departments,  the  Commission  received  a  request
from  the  French  authorities  in  March  2002  for  an  extension,  for  a  further  10  years
from 1 January 2003, of the arrangements for dock dues which were due to expire on
31 December 2002. The Commission is currently considering this request in liaison
with the French authorities and has identified certain data which it needs to complete
its examination. The  French authorities  should supply all  the  data  needed  to  define
the  future  arrangements  during  the  first  quarter  of  2003  and  on  that  basis  the
Commission will prepare a proposal for a long-term Community framework for dock
dues during that year.

12

13

OJ C 258, 9.9.2000, p. 5.
Council Decision 2002/546/EC of 20 June 2002, OJ L 179, 9.7.2002, p. 22

7

                                                
To avoid any lapse  in  the  present  system  of  dock  dues,  the  Commission  adopted  a
proposal  for  a  Council  decision  on  28 August  extending  for  one  year,  to
31 December  2003,  its  decision  of  22 December  198914;  the  Council  should  be
adopting this decision by 31 December 2002.

The Council adopted two decisions on excise duties in 2002. Decision 2002/167/EC
of  18 February  authorised  Portugal  to  apply  a  reduced  rate  of  excise  duty  in  the
autonomous region of Madeira on locally produced and consumed rum and liqueurs,
and  in  the  autonomous  region  of  the  Azores  on  locally  produced  and  consumed
liqueurs and eaux-de-vie.15 Decision 2002/166/EC of 18 February authorised France
to  extend  the  application  of  a  reduced  rate  of  excise  duty  on  ‘traditional’  rum
produced in its overseas departments16.

3.4.

The  customs  measures  implemented  in  the  outermost  regions  fall  into  two
categories: one intended to promote the development of free zones there and the
other allowing the duty-free import of certain products.

These measures are in line with Article 299(2) of the Treaty.

The  free  zone  on  Madeira  is  the  only  one  currently  benefiting  from  specific
measures.  These  include  the  suspension  of  customs  duties  on  the  import  of  certain
goods intended to equip the free zone until the end of 2008. In addition, favourable
tariff  treatment  -  which  may  go  as  far  as  the  total  suspension  of  customs  duties  -
applies  to  the  import  of  certain  industrial  products  for  processing  or  substantial
working within the free zone until 31 December 2005. The products obtained may be
put  into  free  circulation  without  payment  of  duties  and  sent  to  other  parts  of  the
Community’s customs territory without needing to be re-exported elsewhere.

As regards the import of goods without payment of duties, Council Regulation (EC)
No 704/200217  authorises  the  suspension  of  customs  duties  on  the  import  into  the
Canary  Islands of  certain  industrial products (goods for  capital  investment  and  raw
materials for maintenance and processing) and fisheries products until 31 December
2011.  These  measures  are  intended  to  help  maintain  and  develop  industrial  and
commercial  activity  there,  while  at  the  same  time  gradually  abolishing  the
suspensions  of  customs  duties  on  goods  intended  for  final  consumption.  These
customs  measures  for  industrial  products  are  accompanied  by  tariff  exemptions
based on quotas for fishery products destined for local consumption and supplement
those in the agricultural sector.

In  addition,  the  Commission  is  willing  to  consider  any  other  request  for  customs
measures  to assist  the  outermost  regions  and  designed  to  offset  the  effects  of  trade
policy towards non-member countries, particularly those bordering on the outermost
regions, as long as such measures comply with the limits set out in Article 299(2) of
the Treaty.

14

15

16

17

COM(2002) 473 final.
Council Decision 2002/167/EC of 18 February 2002, OJ L 55, 26.2.2002, p. 36.
Council Decision 2002/166/EC of 18 February 2002, OJ L 55, 26.2.2002, p. 33.
Council Regulation (EC) No 704/2002 of 25 March 2002, OJ L 111, 26.4.2002, p. 1.

8

                                                
4.

4.1.

4.2.

THE STRATEGIC DOMAINS

A number of projects for small firms and tourism are being carried out under
Structural  Fund  programming  for  2000-2006.  However,  because  of  the
difficulties recently encountered by the tourism sector in some of the outermost
regions,  the  Commission  believes  that,  in  addition  to  the  measures  to  be
implemented  in  the  transport  field,  at  least  two  types  of  measures  should  be
assessed and investigated. These are measures to assist access for small firms to
financial  resources  and  credit,  and  greater  support  for  vocational  training
programmes in these sectors.

In the area of transport, mention should be made of changes in the Community
guidelines  for  the  trans-European  transport  networks.  Following  the  adoption
of Decision 1346/2001/EC18 amending the guidelines adopted in 1996, the ports
in the outermost regions are regarded as of common interest and form part of
the  trans-European  network,  which  makes  them  automatically  eligible  for
finance  from  the  TEN  budget  and  the  Cohesion  Fund.  Furthermore,  on
6 November  2001  the  Commission  made  a  proposal  for  a  decision  of  the
European  Parliament  and  the  Council  amending  Decision  1692/96/EC  on  the
Community  guidelines  for  the  development  of  the  trans-European  transport
networks.  This  proposal,  which  is  being  discussed  by  Parliament  and  the
Council, has as one of its priorities the development of infrastructure linking the
outermost regions to the central regions of the Union.

On 5 February 2002 the Commission sent the Council and Parliament a proposal for
a  Regulation  of  the  European  Parliament  and  the  Council  concerning  the  grant  of
Community  financial  assistance  to  improve  the  environmental  performance  of  the
freight  transport  system:  the  'Marco  Polo'  programme.  The  Commission  proposal,
which is currently being discussed by Parliament and the Council, would enable the
outermost  regions  to  participate  in  the  three  types  of  measures  in  the  programme:
modal shift measures, catalyst actions (e.g. 'motorways of the sea') and measures to
promote common learning actions (e.g. improved port procedures).

In  general,  the  Commission  regards  transport  as  a  strategic  element  in  the
development of the outermost regions, a factor stressed also in the conclusions of the
Seville European Council and the recent declaration adopted by the Presidents of the
outermost  regions  at  La Palma  on  15 October  2002.  Transport  will  therefore  be
considered  at  length  in  the  report  on  the  future  of  the  outermost  regions  to  be
presented by the Commission at the end of 2003 as required by the Seville European
Council.  To  that  end,  and  following  the  conclusions  of  the  meeting  between  the
Commission and the Monitoring Committee for the outermost regions which met in
Brussels on 2 October 2002, a  working party  on  transport will be set up  within the
Commission’s  inter-departmental  group.  The  work  and  thinking  of  this  group  will
concentrate  on  state  aids  and  public-service  obligations  in  the  transport  sector
(particularly  the  adaptation  of  existing  Community  instruments  to  the  specific
features of the outermost regions and offsetting their handicaps) and the mobilisation
of  the  Structural  Funds  (particularly  as  regards  infrastructure)  in  order  to  maintain
and expand the transport resources intended to overcome the handicaps imposed by
these regions’ remote location.

18

Decision 1346/2001/EC of the European Parliament and the Council of 22 May 2001, OJ L 185, p. 1.

9

                                                
4.3.

4.4.

4.5.

The  main  feature  as  regards  energy  is  the  evolution  of  the  Community
guidelines  for  the  trans-European  energy  networks.  On  6 March  2002  the
Commission  sent  Parliament  and  the  Council  a  proposal  for  a  Decision
amending  Decision  1254/96/EC  laying  down  a  series  of  guidelines  for  trans-
European  energy  networks.  This  proposal,  currently  being  discussed  by
Parliament  and  the  Council,  includes  in  the  Community  guidelines  for  the
Energy  TENs  the  interconnection  of  the  remote  and  outermost  regions.  Two
projects  of  common  interest  are  identified  in  this  regard:  the  development  of
electricity networks in these regions and their connection and the introduction
of natural gas and the establishment of gas networks there. This integration will
make such projects eligible for TEN finance, mainly in the form of part-finance
for studies and other preparatory measures.

On 10 April 2002 the Commission sent Parliament and the Council a proposal for a
decision on a multi-annual programme for measures in the field of energy. This is the
“Intelligent  energy  for  Europe”  (2003-2006)  programme.  This  proposal,  which  is
currently being discussed by Parliament and the Council, encourages participation by
the  outermost  regions,  which  are  by  definition  covered  by  the  programme  (energy
efficiency and the promotion of renewable sources of energy) and provides  for key
measures concerning these regions to be launched. The definition of these measures
will be specified in the Commission’s work programme.

On the  subject of compensation for  the  extra costs  of  transporting  energy borne by
these  regions,  the  Commission  would  like  to  consider,  jointly  with  the  outermost
regions  and  the  Member  States  concerned,  what  is  the  best  way  of  combining
national and Community solutions.

As  regards  the  environment,  the  Commission  will  ensure  that  the  mid-term
review of programming under the Structural Funds takes account of the needs
of the outermost regions in terms of environmental infrastructure. It also notes
that  various  issues  of  crucial  importance  to  these  regions  (such  as  climate
change,  protecting  biodiversity,  managing  coastal  areas, 
the  marine
environment  and  civil  protection)  are  priorities  in  the  sixth  Community
programme for the environment.

Developments  in  the  information  society  and  telecommunications  are  of
fundamental  importance  for  the  development  of  the  outermost  regions,  in  the
same  way  as  ports  and  airports,  because  this  infrastructure  helps  overcome
geographical  remoteness  and  facilitates  essential  applications  such  as  e-
commerce, e-government, distance medicine, education, tourism and research.

The telecoms regulatory package which the Commission adopted in March this year
must be implemented by the national  authorities during 2003  and applied in full in
the outermost regions. The Commission will establish the appropriate contacts with
the national authorities and draw their attention to the fact that implementation must
take account of the needs of these regions.

On 11 and 12 April 2002, the Commission organised a conference with the Spanish
presidency on the information society and sustainable regional development. One of
the  results  of  that  conference  was  agreement  among  the  outermost  regions  on  a
programme  to  implement  the  information  society  there.  The  Commission  will

10

support a working party of these regions to define and implement the resulting action
plan.

As part of its work on monitoring tariffs and prices for telecommunications services,
the Commission will ensure that in 2003-2005 the outermost regions will not suffer
discrimination; it will also encourage price reductions through greater competition.

As regards the programmes of innovative actions, it is encouraging to see that, from
2001, the first year of the Initiative, the outermost regions have shown considerable
interest in the new generation of ERDF innovative actions for 2000-2006. This part
of the ERDF's activities is designed to identify and support innovative practices that
promote  economic  and  social  development  in  the  priority  areas  of  the  information
society, technological innovation and sustainable development.

The following operations are under way in the various regions concerned:

-  Réunion  has  chosen  to  target  its  regional  programme  of  innovative  actions  on
upgrading  skills  and  bringing  them  into  line  with  demand  from  firms  in  the  new
information and communications technologies so as to boost the local economy;

- the Canary Islands have based their programme on a regional strategy to integrate
the  islands  into  the  information  society  (local  people,  firms,  new  economic
activities);

- Madeira has concentrated its innovation activities on developing a regional strategy
and  pilot  projects  in  the  fields  of  R&TD  and  locally-generated  and  sustainable
development;

In  May  2002  Guadeloupe  and  the  Azores  submitted  action  programmes  which  the
Commission is currently evaluating. 

Also in the field of the information society, the Commission will ensure that the sixth
Framework  Programme  on  research  is  applied  and  the  European  Research  Area
(ERA) implemented so as to ensure that the outermost regions secure their share and
in  particular  achieve  the  priorities  relating  to  the  information  society  technologies.
This  will  require  a  dynamic  and  innovative  approach  to  ensure  sustainable
development, as the Presidents of the outermost regions stressed in their conclusions
at the La Palma Conference in October 2002.

4.6.

In  the  area  of  research,  the  Commission  has  carried  out  a  study  on  research
potential  in  the  outermost  regions  with  the  aim  of  preparing  an  inventory  of
existing  resources  to  be  used  to  identify  the  measures  to  be  taken  to  allow  the
outermost  regions  to  participate  more  fully  in  the  European  Research  Area
(ERA) and improve access to the research carried out there.

The  study  and  its  recommendations  were  presented  at  the  La Palma  conference  in
October  2002.  In  cooperation  with  the  outermost  regions,  the  Commission  will  be
assessing  these  recommendations  so  that  measures  at  Community,  national  and
regional  level  can  help  to  improve  the  integration  of  research  activities  in  the
outermost regions.

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4.7.

In  the  education  sector,  the  Commission  notes  the  importance  of  regional
education networks as a measure to support sustainable development.

5.

THE INTERNATIONAL ENVIRONMENT AND REGIONAL COOPERATION

The main goal regarding the international environment of the outermost regions is to
integrate them into their regional context. This presupposes in particular an accurate
assessment of the impact of trade and association agreements concluded with regions
and countries in the same geographical area. Accordingly the Commission has had a
study carried out on this subject, principally to look at the impact on the outermost
regions  of  the  new  ACP-EU  Partnership  Agreement  and  the  ‘Everything  but  arms’
initiative. This analysis should also cover the impact of other relevant trade measures
and  agreements,  particularly  the  trade  agreements  with  the  countries  around  the
Mediterranean.

This  study  should  provide  pointers  as  to  what  steps  could  be  taken  to  help  the
outermost regions to seize opportunities to promote their economic and commercial
activities  and  meet  the  challenges  of  adjustment  posed  by  trade  measures  and
agreements.

The recent approval of three Interreg III B programmes specifically for the outermost
regions  makes  further  financial  instruments  available  to  them  to  assist  their
harmonious  integration  into  their  regional  context.  The  Interreg  programmes  place
international  openness  and  regional  integration  at  the  centre  of  their  development
strategy  and  will  permit  cooperation  to  be  developed  among  the  outermost  regions
themselves and with other countries.

6.

6.1.

6.2.

THE COMMISSION’S WORK PROGRAMME FOR 2003 AND THE OUTERMOST REGIONS

The mainstay of the Commission’s work in this area is its partnership with the
outermost regions. Account therefore needs to be taken of discussions with the
Presidents of these regions and the relevant monitoring group, and the working
parties  established  in  more  specific  areas  such  as  transport  and  state  aids,
energy, traditional products and research and the information society.

The  Commission  will  continue  its  evaluation  of  the  implementation  of
Article 299(2) EC on the outermost regions by preparing six-monthly reviews of
the situation and a report on the general strategy for the regions, alongside the
Third  Report  on  Economic  and  Social  Cohesion.  Besides  the  Community
policies  traditionally  considered  in  the  context  of  the  outermost  regions,  the
Commission  will  include  topics  raised  recently  in  their  regard  such  as
immigration and the institutional future of Article 299(2) in a new basic Treaty.

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7.

CONCLUSIONS

The  main  feature  of  2002-2003  has  been  the  particularly  major  and  sensitive
challenges  facing  the  outermost  regions.  Furthermore,  the  general  promotion  of
sustainable  development  in  these  regions  requires  a  variety  of  responses  with
contributions from several Community policies. The common aim of these measures
must  be  to  assess  the  specific  needs  of  these  regions  adequately  and  provide
corresponding  responses 
law  and  resources.  The
Commission  is  aware  of  what  is  at  stake  and  has  already  developed  a  panoply  of
initiatives  to  this  end;  it  will  continue  the  general  strategy  to  be  implemented  with
regard to these regions.

line  with  Community 

in 

13