Communication from the Commission - A stronger partnership for the outermost regions
Date: 2004-05-26
Institutions: European Commission
Subjects: cooperation policy, economic and social cohesion, enlargement of the Union, peripheral region

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.5.2004 
COM (2004) 343 final 

COMMUNICATION FROM THE COMMISSION 

A stronger partnership for the outermost regions 

EN 

   EN 

 
 
 
  
TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

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

Measures stemming from the third cohesion report .....................................................4 

The measures in the general context of the reform of the cohesion policy ..................4 

The specific programme to compensate for additional costs........................................5 

The ‘wider neighbourhood’ action plan........................................................................7 

2.3.1.  Transnational and cross-border cooperation.................................................................7 

2.3.2.  Trade and customs policy measures .............................................................................9 

3. 

3.1. 

3.2. 

Implementation of the development strategy in the other Community policies.........10 

Measures concerning competitiveness and growth ....................................................10 

Action on the constraints on the outermost regions....................................................12 

3.2.1.  Access .........................................................................................................................12 

3.2.2.  State aid.......................................................................................................................13 

3.2.3.  Traditional production in agriculture and fisheries.....................................................14 

4. 

5. 

Towards an instrument for the systematic evaluation of the handicaps of the outermost 
regions and Community measures..............................................................................15 

Conclusions.................................................................................................................15 

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1. 

INTRODUCTION 

The European Council of Seville1 has asked the Commission to submit a report containing an overall 
and  coherent  assessment  of  the  specific  characteristics  which  affect  the  situation  of  the  outermost 
regions. It also invited the Council and the Commission to press ahead with the implementation of 
Article 299(2) of the Treaty and to adopt suitable measures to take account of their special needs, in 
particular  transport  policy  and  the  reform  of  regional  policy.This  communication  presents  the 
principal elements of this strategy which will be developed in more details in a future Report.  

Seven of the regions in the European Union are classified as ‘outermost’. They are: 

– 

– 

– 

the Spanish Autonomous Community of the Canary Islands; 

the  four  French  overseas  departments:  Guadeloupe,  French  Guyana,  Martinique  and 
Réunion; 

the Portuguese autonomous regions of the Azores and Madeira. 

Following  implementation  of  the  specific  guidance  programmes  for  remoteness  and  insularity 
(POSEI)  in  1989  and  1991,  specific  measures  for  the  outermost  regions  have  been  based  on  a 
recognition of their special features and a desire to promote their socio-economic development in a 
way which would encourage their convergence and integration with the rest of the European Union. 

The  recognition  of  their  special  status  in  Article  299(2)  of  the  Treaty  is  based  on  the  principles  of 
equality and proportionality which allow differing treatment to take account of the distinct situation 
of  those  regions.  Under  that  status,  the  European  Union  adapts  Community  measures  so  that  those 
living in the outermost regions can enjoy the same opportunities as those in the Union as a whole. It 
should also be noted that since 1989 cohesion policy has worked to offset the economic and social 
disparities  affecting  these  regions,  which  benefit  from  a  higher  level  of  financial  support  from  the 
Structural Funds and, in the case of those forming part of Portugal and Spain, the Cohesion Fund. 

The outermost regions have to cope with the specific constraints listed in the Treaty – remoteness, 
insularity, small size, difficult topography and climate, economic dependence on a few products – all 
factors  the  permanence  and  combination  of  which  severely  restrain  their  development.  They  share 
features  which  accentuate  their  isolation  and  render  their  socio-economic  conditions  and 
development still more fragile (these include the very low level of economic diversification, which is 
based primarily on tourism and agriculture). 

The  request  of  the  European  Council  of  Seville  has  furthermore  been  supported  on  a  number  of 
occasions  by  the  European  Parliament,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions, which have constantly placed the need to implement a genuine strategy 
for the outermost regions at the head of the list of priorities to be developed. 

The outermost regions and the three Member States concerned have also sent regular memoranda to 
the  European  institutions.  The  Commission  has  studied  these  carefully  as  part  of  its  partnership 
relations with these regions on used them as a basis for preparing a strategy for their development. 

This communication sets out the operational recommendations in the Commission’s working paper A 
stronger partnership for the outermost regions: situation and prospects. 

1  

Paragraph 58 of the conclusions of the Seville European Council on 21 and 22 June 2002. 

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The  Commission  has  accordingly  selected  three  priorities  for  action  which  will  guide  the  future 
development strategy for these regions: competitiveness, access and the offsetting of other constraints 
and  integration  into  the  regional  area  (including  in  particular  justice  and  home  affairs).  These 
priorities  run  alongside  the  efforts  being  made  by  the  Community  under  the  Lisbon  and  Göteborg 
strategy  for  a  competitive  European  Union  capable  of  sustainable  economic  development.  The 
priorities  for  the  outermost  regions  will  therefore  be  implemented  through  special  instruments:  the 
policy on economic and social cohesion through its financial instruments and the other Community 
policies. 

To  develop  this  action  plan,  the  Commission  intends  to  consolidate  its  partnership  relations  by 
systematically associating the representatives of the national authorities directly concerned with the 
meetings between the Commission and the Monitoring Committee for the outermost regions. It also 
intends to increase the number of thematic and targeted forums bringing together the economic and 
social partners and non-governmental organisations. 

2. 

MEASURES STEMMING FROM THE THIRD COHESION REPORT  

On  18  February  2004  the  Commission  adopted  the  third  report  on  economic  and  social  cohesion 
whose  conclusions  contain  its  proposals  for  a  reformed  cohesion  policy  after  2006,  including  the 
general  context  of  the  reform  of  the  cohesion  policy,  the  specific  programme  to  compensate  for 
additional costs and the wider neighbourhood action plan. It constitutes the background to the future 
status of the outermost regions2. 

2.1. 

The measures in the general context of the reform of the cohesion policy  

Regarding  the  action  of  the  Structural  Funds  and  in  the  framework  of  the  reform  of  the  future 
cohesion  policy,  it  is  foreseen  to  make  the  outermost  regions  eligible  for  any  one  of  the  objective 
depending on their relative level of development. 

It  should  be  emphasised  that  it  is  still  too  soon  to  pronounce  on  the  future  status  of  the  seven 
outermost  regions  under  the  reformed  cohesion  policy  since  the  eligibility  of  any  of  the  Union’s 
regions for that policy will not be known until the financial perspective is adopted on the basis of per 
capita GDP statistics for the last three years available when the decision is taken. However, the trends 
of their current levels of development suggest that all the outermost regions should be eligible under 
the  future  cohesion  policy  under  either  the  ‘Convergence’  or  the  ‘Regional  competitiveness  and 
employment’ objective and will benefit under the ‘European territorial cooperation’ objective. 

Besides  the  common  rules  on  programming,  management,  inspection  and  the  evaluation  of  the 
projects  part-financed,  the  Commission  is  proposing  that  the  future  rules  on  the  cohesion  policy 
should provide for an increased rate of assistance to the outermost regions. This will include raising 
the  ceiling  on  assistance  for  the  ‘Convergence’  and  ‘Regional  competitiveness  and  employment’ 
priorities to 85%.  

2 

Extracts  from  the  conclusions  of  the  3rd  Cohesion  Report  of  18  February  2004:  “The  Commission  intends, 
within the convergence objective, to set up a specific programme to compensate for the specific constraints of 
the outermost regions, as recognised by Article 299(2) of the Treaty and requested by the European Council of 
21-22 June 2002 in Seville. In addition, an action “Grand voisinage” aimed at facilitating cooperation with the 
neighbouring  countries  would  be  included  under  the  new  “European  territorial  cooperation”  programmes.  In 
accordance with the request of the Council, the Commission will shortly present a report on an overall strategy 
for the outermost regions.” 

4 

 
 
  
 
                                                 
2.2. 

The specific programme to compensate for additional costs 

The  conclusions  of  third  Cohesion  Report  of  18  February  2004  stated  “the  Commission  intends, 
within the convergence objective, to set up a specific programme t take into account for the specific 
constraints of the outermost regions, as recognised by Article 299(2) of the Treaty and requested by 
the European Council of 21 and 22 June 2002 in Seville.” 

The cohesion policy should act both to reduce the impact of the handicaps listed in Article 299(2) and 
to increase the competitiveness of these isolated economies.  

Although  the  measures  taken  by  the  Union  with  regard  to  the  outermost  regions  have  proved 
successful, constraints mean that their development and integration are still lagging behind those of 
other regions of the Union. Poor access and obstacles to their firms’ competitiveness in the context of 
the single market remain. 

Although  the  gradual  removal  of  trade  barriers  within  the  European  single  market  has  increased 
economies of scale and external economies in most regions, the natural barriers to trade which still 
exist  in  the  outermost  regions  weaken  the  position  of  firms  located  there  compared  with  those  in 
regions  which  enjoy  full  access  to  the  Community  market.  Firms  in  the  outermost  regions  remain 
restricted to a limited local market which is fragmented and remote and which does not enable them 
to benefit on equal terms from economies of scale and external economies. 

It also appears that certain Community policies do not take adequate account of the special features 
of these regions.  The inappropriate nature of certain Community instruments is due mainly to their 
having been designed for the Community as a whole without incorporating the specific dimension of 
the  outermost  regions.  Three  sectors  illustrate  this  point  to  differing  degrees:  the  environment, 
transport and the internal market. 

In  the  case  of  sustainable  development,  in  a  quest  for  synergy  all  Community  policies  include 
obligations relating to the preservation of the environment. In the desire to preserve their ecosystem, 
the  outermost  regions  spend  a  substantial  amount  of  money,  particularly  under  their  regional 
programmes,  on  developing  appropriate  environment-related 
regards 
environmental concerns, it should be noted that certain obligations are still disproportionate in view, 
in  particular,  of  the  remoteness  and  small  size  of  these  regions.  For  example,  some  categories  of 
waste cannot be processed on the spot and have to be sent to treatment centres on mainland Europe. 
The result is a constant burden of additional costs falling solely on the outermost regions. 

infrastructure.  As 

The  recasting  of  the  guidelines  on  the  trans-European  transport  networks  (TEN-T)  is  part  of  an 
approach clearly centred on the continental European network in preparation for enlargement. At the 
same  time  as  these  networks  are  being  designed  to  improve  the  integration  of  the  central  outlying 
regions of the Union by improving high-capacity links so as to preserve the competitiveness of the 
European  economy,  the  outermost  regions  remain  isolated  and  distant  in  their  local  markets  with 
projects  to  interconnect  them  and  link  them  to  mainland  Europe  receiving  only  low  priority.  The 
financing  of  transport  infrastructure  under  the  Structural  Funds  resolves  the  problem  of  building 
modern  high-capacity  infrastructure  but  is  not  intended  to  provide  a  satisfactory  answer  to  the 
problems of access, particularly internal access, the additional costs engendered by the geographical 
situation of the outermost regions, the impact of limited competition and the absence of intermodal 
competition in the other mainland regions. 

A final example is the process of building the single market, which has not had the positive effects 
supposed  in  these  remote  regions.  The  impact  of  economic  liberalisation  in  the  regulated  sectors, 
particularly  public  services,  has  had  certain  consequences  for  competition  and  the  prices  of  these 

5 

 
 
  
 
services in the outermost regions. Because the markets are small, de facto monopoly situations have 
been created which reduce the competitiveness of the whole economy of these regions and generate 
inflationary  effects.  It  has  also  impeded  the  maintenance  of  balancing  systems  to  ensure  a  single 
pricing scale throughout the national territory. The conclusion is not that this attempt at liberalisation 
should  be  discontinued  in  the  outermost  regions  but  rather  that  it  should  be  supported  through  the 
national  and  Community  instruments  available  for  improving  competition  (particularly  Articles  81 
and 82 of the EC Treaty, public service obligations and other instruments of regulated liberalisation). 

These factors plead for the creation of a specific programme to offset the constraints on the outermost 
regions adapted to their special features and financed by the European Regional Development Fund 
(ERDF) under the financial perspective for 2007-13. The aims are initially to reduce difficulties of 
access  from  these  regions  not  only  to  mainland  Europe  but  also  from  one  region  to  another  and 
within the regions and then to increase the competitiveness of their firms. The programme’s objective 
will be grouped in three fields:  

(1) 

(2) 

(3) 

Difficulties  of  access  due  to  their  great  isolation,  fragmentation  and  topography:  the 
aim  will  be  to  reduce  the  impact  of  the  main  constraints  affecting  these  regions,  i.e. 
isolation, fragmentation and difficult topography and so improve their capacity for economic 
access,  particularly  to  the  Community  market.  Particular  attention  will  be  paid  to  freight 
transport,  energy  supplies  and  access  to  the  communications  and  information  technology 
networks and services.  

Small regional markets, breaking bulk and no or inadequate economic diversification: 
the  aim  will  be  to  take  account  of  a  number  of  constraints  arising  from  the  small  size  of 
markets in these regions. To combat the lack of adequate economic diversification, greater 
support will be given to innovative sectors, including measures for research and innovation 
(for those which have not yet been financed under the framework programme for research 
and development or the instruments of the cohesion policy), the training of human resources 
and the promotion of local products outside these regions.  

Environmental  and  climatic  difficulties  (including  cyclones,  volcanic  activity  and 
earthquakes)  and  the  preservation  of  biodiversity:  measures  should  concentrate  on 
improving  environmental  conditions,  the  treatment  of  waste  and  taking  into  account  the 
additional costs generated by particular climatic conditions.  

The  arrangements  for  assistance  under  this  programme  will  be  strictly  defined.  In  general,  the 
applicable  principles  under  the  general  reform  of  the  cohesion  policy,  programming,  partnership, 
additionality, evaluation and coordination with the other existing Community financial instruments, 
will  apply  to  the  specific  programme  for  the  outermost  regions.  Compliance  with  the  other 
Community policies (particularly competition policy and the rules on public contracts) will have to 
be guaranteed.  

The Commission will propose using Article 299(2) of the Treaty to adjust the rules on the eligibility 
of  expenditure  under  the  ERDF  to  include  operating  aid  intended  to  take  into  account  extra  costs. 
With specific reference to mobile transport assets, the Commission could be open to authorising their 
part-financing  if  they  are  used  only  for  communications  within  the  outermost  regions  and  between 
outermost regions in the same geographical area.  

The maximum rate of part-finance would be 50% of the total eligible cost 

6 

 
 
  
 
To  ensure  that  the  specific  programme  has  a  real  economic  impact  on  the  outermost  regions,  the 
Community  funding  allocated  would  not  replace  structural  public  or  similar  expenditure  by  the 
Member States concerned. 

2.3. 

The ‘wider neighbourhood’ action plan 

The third Cohesion Report of 18 February 2004 announced that a ‘wider neighbourhood’ measure to 
facilitate cooperation with neighbouring countries would be included as one of the new programmes 
for “European territorial cooperation”. 

One of the most promising of the Union’s approaches to assistance concerns the strengthening of the 
economic, social and cultural links between the outermost regions and neighbouring territories. The 
aim is to enlarge the natural area of socio-economic and cultural influence of the outermost regions 
(including  the  treatment  of  questions  concerning  migratory  populations)  by  reducing  the  barriers 
which restrict trade with their geographical neighbours. These regions are very far from the European 
mainland  but  very  close  to  the  geographical  markets  of  the  Caribbean,  America  and  Africa, 
particularly those of the ACP countries.3 

This  will  require  the  coherent  development  of  trade  in  goods  and  services  and  the  movement  of 
people, along with exchanges of experience. The Commission proposes that the wider neighbourhood 
action  plan  should  be  based  on  two  main  principles:  transnational  and  cross-border  cooperation, 
commercial  trade,  and  customs  measures.  This  action  plan  will  also  have  to  be  accompanied  by  a 
campaign to raise the awareness  of all  those concerned,  including Commission  delegations in non-
member  countries,  of  the  importance  of  the  challenge  facing  the  outermost  regions  and  their 
neighbours. 

2.3.1.  Transnational and cross-border cooperation 

The  Commission  has  given  consideration  both  to  ways  of  improving  cooperation  among  the 
outermost regions and their neighbours and to the priorities for such cooperation. 

In the context of the ‘European territorial cooperation’ objective of the reformed cohesion policy, the 
Commission  intends  to  improve  transnational  and  cross-border  cooperation  to  the  benefit  of  the 
outermost  regions.  Some  of  the  funding  allocated  to  cross-border  cooperation  in  the  outermost 
regions  could  be  allocated  to  projects  implemented  with  neighbouring  non-member  countries 
(particularly  the  ACP  countries  and  those  around  the  Mediterranean).  That  derogation  from  the 
territorial  rules  on  eligibility  would  be  based  on  Article  299(2)  of  the  Treaty.  It  is  justified  by  the 
constraints on the outermost regions and efficient cooperation work. 

Furthermore,  the  cooperation  programmes  could  be  coordinated  at  the  level  of  programming  and 
implementation  with  the  regional  indicative  programmes  (RIP)  financed  by  the  European 
Development Fund (EDF) in the ACP countries. In the overseas countries and territories and where 
there is no RIP, the measures financed could be requested by the authorities of those countries and 
fall  under  the  cooperation  fields  listed  in  the  decision  to  associate  the  overseas  countries  and 
territories with the EU4. Finally, the possible budgetisation of the EDF will allow this coordination 
strategy  to  be  improved,  by  allowing  specific  funding  from  the  RIP  to  be  earmarked  to  step  up 
cooperation between the outermost regions and the ACP countries. 

3 

4 

African, Caribbean and Pacific countries parties to the ACP – EC Partnership Agreement signed in Cotonou on 
23 June 2000 (OJ L 317, 15.12.2000, p. 3). 
Council Decision of 27 November 2001 (OJ L 314, 30.11.2001, p. 1). 

7 

 
 
  
 
                                                 
Except in the two cases below based on Article 299(2) of the Treaty, the management arrangements 
provide for no particular exceptions to the system for the whole of the cooperation objective of the 
reform: 

– 

– 

In the case of ERDF assistance to non-member countries, as far as the implementation of the 
projects  is  concerned,  the  national  authorities  of  the  Member  States  concerned  will  be 
financially responsible for implementation and compliance with the Treaty and acts adopted 
pursuant  thereto  and  with  Community  policies  and  measures,  including  in  particular  those 
concerning  the  competition  rules,  the  award  of  public  contracts  and  the  protection  and 
improvement of the environment. 

There should also be provision for limited Community assistance under the ERDF to allow 
operating aid to be financed. This would apply on a case-by-case basis only to start-up aid 
for  transport  services  between  the  outermost  regions  and  neighbouring  non-member 
countries.  Such  aid  would  be  strictly  monitored  to  avoid  distorting  competition  with  non-
Community  carriers  on  the  lines  affected  and  provoking  a  reaction  from  the  non-member 
countries concerned. 

The  priorities  for  the  European  territorial  cooperation  objective  will  require  the  following  three 
guidelines to be particularly taken into account: 

– 

– 

– 

– 

5 

Facilitating  exchanges  as 
information  and 
communications technologies. There should be better coordination with existing agreements 
and programmes. 

transport,  services  and 

regards 

the 

Facilitating exchanges of persons: to be effective, cooperation should be based on the easier 
movement  of  nationals  of  neighbouring  non-member  countries  whose  papers  are  in  order. 
This  type  of  exchange  is  essential  to  facilitate  the  economic  integration  of  the  outermost 
regions into their area and to enable their neighbours to secure maximum advantage for their 
development from this cooperation.  

These exchanges will also have to take account of the fight against illegal immigration. The 
general  measures  which  the  Commission  is  already  contemplating  under  the  justice  and 
home affairs policy and for the territories covered by the Schengen Agreement – a European 
Agency to improve the management of operational cooperation, a programme for technical 
and  financial  assistance  to  non-member  countries  as  regards  asylum  and  immigration5  and 
the launch of preparatory measures for 2004 and 2005 for integrated return programmes – 
will be required to take particular account of the specific needs of the outermost regions in 
these  fields.  Account  would  also  have  to  be  taken  in  programming  cooperation  with  the 
ACP countries  in  the  Caribbean  and  the  Indian  Ocean  at  national  and  regional  level  of 
migratory flows in accordance with the spirit of Article 13(4) of the Cotonou Agreement. 

Exchanges of experience as regards regional integration: for the best use to be made of the 
trade aspect of this action plan (see above), cooperation should also be based on exchanges 
of experience as regards regional integration and support for economic cooperation and trade 
between the outermost regions and their neighbours. The aim is to support and anticipate the 
establishment  of  economic  partnerships  between  ACP countries  because  the  outermost 

Regulation (EC) No 491/2004 of the European Parliament and of the Council of 10 March 2004 establishing a 
programme  for  technical  and  financial  assistance  to  third  countries  in  the  areas  of  migration  and  asylum 
(AENEAS). OJ L 80, 18.3.2004, p. 1.  

8 

 
 
  
 
                                                 
regions  have  every  interest  in  monitoring  and  perhaps  associating  themselves  with  the 
processes of regional integration which are taking place in their geographical areas. 

2.3.2.  Trade and customs policy measures 

Trade  policy  may  serve  to  improve  the  integration  of  the  outermost  regions  into  their  regional 
economy, both in terms of goods and services and in other trade-related fields (intellectual property 
rights,  health  and  plant-health  measures,  etc.).  A  distinction  should  be  made  between  agreements 
with the ACP countries and other Union agreements and measures. 

(1) 

ACP:  The  Cotonou  Agreement  already  makes  provision  for  the  conclusion  of  ACP-EU 
economic partnership agreements (EPA) which, by the end of 2007, will increase economic 
and  trade  cooperation,  including  free-trade  areas  between  the  ACP  countries  (grouped  in 
trading blocs) and the European Union, which will be compatible with WTO rules. The main 
interest  of  the  EU  in  these  agreements  is  to  step  up  the  economic  integration  of  the  ACP 
countries  in  order  to  promote  their  sustainable  development.  It  is  vital  for  the  outermost 
regions to be associated with this. 

This means that account should be taken of their specific interests in the negotiation of the 
ACP-EU EPAs. This will require the prior and exact identification of the interests of each of 
the outermost regions in regional trade flows, having regard to economic complementarity 
between these regions and the ACP countries. To that end, the Commission will invite the 
regions  and  Member  States  to  notify  it  of  the  sectors  and  types  of  trade  they  consider 
important for the outermost regions. The Commission will assess these notifications in the 
exercise of its powers. The same approach could be followed for trade in services and trade-
related fields in order to identify the specific interests of the outermost regions. 

This  new  context  of  stronger  trade  relations  with  their  neighbours  should  also  allow  the 
French overseas departments and the Canary Islands to begin considering how to coordinate 
on trade and customs instruments and tax instruments such as dock dues and the ‘Arbitrio 
sobre las Importaciones y Entregas de Mercancías en las Islas Canarias’. 

(2) 

Other agreements and measures: With regard to the Union’s new preferential agreements 
with other non-member countries, the Commission will carry out an analysis of the impact 
of  these  agreements  on  the  economy  of  the  outermost  regions.  It  will  draw  the  relevant 
conclusions  as  to  the  measures  which  these  regions  could  take  to  seize  opportunities  to 
promote  their  economic  and  commercial  activities  and  meet  the  challenges  of  adjustment 
and the other questions stemming from trade measures and agreements. 

In  this  context,  the  Commission  is  also  willing  to  consider  the  reduction,  even  elimination,  of 
common  customs  tariff  duties  in  order  to  allow  the  supply  of  non-agricultural  raw  materials  to 
promote  production  in  the  outermost  regions.  Furthermore,  in  duly  justified  circumstances,  the 
Commission is also willing to consider applications for the temporary suspension of tariff duties in 
those same sectors. In the case of fisheries products, any such measure would be approved only for 
products intended for the local market. In order to contribute to regional integration, it is necessary to 
verify  if  raw  materials  for  which  suspension  of  tariffs  are  requested,  are  not  available  in  the 
geographical area concerned. 

9 

 
 
  
 
3. 

IMPLEMENTATION  OF  THE  DEVELOPMENT  STRATEGY  IN  THE  OTHER  COMMUNITY 
POLICIES 

The instruments used under the other Community policies help implement the development strategy 
for the outermost regions and provide a consistent complement to the ‘wider neighbourhood’ action 
plan. 

3.1.  Measures concerning competitiveness and growth 

The  outermost  regions  suffer  from  extra  production  costs  because  of  on-going  handicaps  which 
individually and in combination seriously hinder the development of certain sectors. These additional 
costs impact on most of the sectors of the local economy producing goods and services, resulting in 
very  poor  diversification,  an  economy  which  is  weak  in  job-creation  and  a  higher  degree  of 
dependence  than  in  the  rest  of  the  Union.  The  Council  has  noted  these  economic  handicaps, 
particularly when it adopted the specific taxation arrangements for the Canary Islands and the French 
overseas  departments:  the  ‘Arbitrio  sobre  las  Importaciones  y  Entregas  de  Mercancías  en  las  Islas 
Canarias’ in 2001 and dock dues in 2004. 

– 

– 

– 

The  development  of  human  resources  is  the  key  to  economic  and  social  cohesion. 
Human resources are vital for economic development and competitiveness in the knowledge 
society  and  so  a  considerable  effort  is  needed  in  this  area.  The  outermost  regions  are 
requested to monitor at local level the special features and trends of their labour markets and 
draw  up  a  strategy  in  a  regional  employment  plan.  So  far,  these  regions  have  not  availed 
themselves  of  the  innovative  measures  financed  by  the  European  Social  Fund  and  the 
Commission would strongly encourage them to do so in the future. 

Public  services  have  a  key  role  in  achieving  the  Union’s  objectives.  The  existence  of  a 
network  of  public  services  is  of  vital  importance  for  social  cohesion.  The  availability  of 
efficient services in the outermost regions is of the utmost importance for the establishment 
of productive activities as regards both the firms which use them and the workers employed 
there. 

One  feature  of  these  regions  very  distant  from  mainland  Europe  and  isolated  in  the 
geographical  area  where  they  are  located  is  that  they  suffer  from  the  small  size  of  their 
markets, particularly the lack of any real competition between economic operators, whether 
public  or  private.  Market  forces  alone  are  not  enough  to  secure  an  optimal  distribution  of 
resources in these territories for the benefit of society as a whole. It would be helpful to have 
a  study  providing  accurate  case-by-case  information  on  how  such  forces  operate  in  the 
outermost regions.  

The  operation 
transport  services, 
the  outermost  regions  of  sectors  such  as 
telecommunications  (both  fixed  and  mobile)  and  electricity  and  gas  will  be  considered  in 
depth by a working party established to make appropriate suggestions. 

in 

Innovation,  the  information  society  and  research  and  technological  development:  the 
Commission  will  ensure  that  account  is  taken  of  the  specific  situation  of  the  outermost 
regions in achieving the objectives of the Lisbon strategy. The reforms begun must enable 
these  regions  remote  from  mainland  Europe  to  improve  their  economic  performance, 
participate in stimulating growth, create jobs and avoid the risks of exclusion. 

Firms  in  the  outermost  regions  must  overcome  their  isolation  and  cope  better  with  the 
pressures exercised on the markets by adopting a policy of successful innovation in the form 

10 

 
 
  
 
 
 
of inventions in the broadest sense, incorporating into their own production processes ideas 
from other sectors  of  activity and redesigning their existing products and services  so as to 
adapt supply to demand from new and hitherto unexploited markets. 

The  Commission  invites  the  outermost  regions  to  submit  a  specific  programme  for  an 
‘Innovative  measures’  network  including  other  European  regions  suffering  from  problems 
similar  to  those  which  affect  them  (the  islands,  small  regions,  tourist  areas,  etc.)  or  using 
innovative  approaches  which  could  be  transposed  to  the  outermost  regions  (access  to  the 
internet  by  high-speed  or  satellite  connections,  etc.).  The  Commission  will  therefore  part-
finance  specific  programmes  for  the  establishment and work  of networks covering at least 
five regions in at least five Member States. 

The  Commission  will  ensure  that  in  2003-05  the  outermost  regions  do  not  suffer  from 
discriminatory  practices  with  regard  to  the  new  information  and  communications 
technologies,  and  in  particular  controls  on  tariffs  and  the  prices  of  telecommunications 
services;  it  will  encourage  price  reductions  through  increased  competition.  A  short-term 
study  will  be  carried  out  on  obstacles  to  access  to  telecommunications  services  in  these 
regions. At the same time, the Commission will continue to lay down guidelines to improve 
the  effectiveness  of  the  telecommunications Directive  in  the  outermost  regions,  expand 
access to broad-band networks and eliminate tariff discrimination. 

The Guidelines on criteria and modalities of implementation of Structural Funds in support 
of electronic communications of 28 July 20036 should allow the development of initiatives 
based  on  the  provision  of  broad-band  in  the  outermost  regions  and  the  development  of 
services at affordable prices there. On the same lines, one of the ‘Quick-start’ projects under 
the  European  initiative  for  growth7  deals  with  the  European  coverage  of  remote  and  rural 
regions. This project is eligible under the Structural Funds in 2000-06. 

To  achieve  the  Lisbon  objectives  and  thoroughly  integrate  the  outermost  regions  into  the 
European Research Area, a substantial increase in research and technological development 
(RDT)  activities  in  the  fields  of  particular  interest  to  them  would  be  desirable.  The 
framework programme for research and technological offers the outermost regions a variety 
of  ways  of  increasing  their  RDT  capacity,  principally  by  participating  in  projects  or 
activities  to  coordinate  research  and  innovation  programmes  with  national  and  regional 
plans  (the  ERA-NET  scheme,  open  to  the  regions)  and  in  measures  for  research 
infrastructure.  The  current  level  of  participation  in  these  activities  and  projects  by  the 
outermost  regions  could  be  substantially  increased  by  the  introduction  of  appropriate 
information and promotion measures. 

Although there are useful sources of information (the CORDIS site8 for example) accessible 
to all the bodies which wish to participate in the framework programme, information work 
in the area of RDT should be improved to meet the specific needs of the outermost regions. 

Analyses and forward studies in the field of research and innovation and in connection with 
the socio-economic data on development should result in monitoring systems with indicators 
and an observatory of changes in such data in these seven regions to encourage trade and the 
dissemination  of  good  practice.  They  would  be  carried  out  by  a  group  of  intra-regional 
experts from the outermost regions in coordination with international experts following the 

6 
7 
8 

SEC (2003) 895. 
COM (2003) 690 final. 
http://www.cordis.lu 

11 

 
 
  
 
 
 
 
 
 
 
                                                 
example of the Mutual Learning Platform and should be established by the Commission for 
its approaches in the regional aspect of research. 

If efforts can be concentrated through the regional specialisation of research, it will be easier 
for the research groups in the outermost regions to step up their efforts to participate in and 
respond more actively to calls under the framework programme. 

The  outermost  regions  are  also  invited  to  make  full  use  of  the  additional  part-financing 
available  under  the  Structural  Funds  for  projects  part-financed  by  the  6th  framework 
programme9.  For  bodies  which  have  received  part-financing  under  the  6th  framework 
programme to obtain extra part-financing from the Structural Funds, they must apply to the 
authorities managing one of the Structural Funds programmes. If these programmes do not 
include measures allowing the projects in question to be financed, the managing authorities 
may request an amendment to the programmes following the procedures laid down for the 
management of the Structural Funds. 

– 

The  environment:  the  Commission  will  systematically  encourage  specific  applications 
from the outermost regions designed to improve the environment using all the instruments 
available,  including  the  6th  Programme  of  Community  action  for  the  environment  which 
allows  account  to  be  taken  of  the  desire  to  preserve  the  environment  of  the  outermost 
regions. 

3.2. 

Action on the constraints on the outermost regions 

3.2.1.  Access 

Offsetting the impact of problems affecting access by the outermost regions to the Community is one 
of its main priorities. In general, use of the existing instruments in the field of air and sea transport 
(public  service  obligations,  social  and  regional  aid)  is  vigorously  encouraged.  The  links  concerned 
are  those  between  the  outermost  regions  and  mainland  Europe  (in  both  directions),  between  the 
outermost regions themselves and within those regions. 

In all cases, the Commission will pay attention to the competition conditions generated by the system 
introduced. The aid granted may not be used to bolster the dominant position of transport operators. 

The Commission recommendations in this field are as follows: 

– 

– 

– 

9 

The  procedure  for  introducing  public  service  obligations  could  be  made  more  flexible, 
particularly  to  obtain  an  extension  of  the  concession  regarding  obligations  to  provide  air 
services. 

The  Commission  is  willing  to  consider  any  suggestions  by  the  outermost  regions  to  make 
short sea journeys between them and mainland Europe more viable. 

As regards local transport, the introduction of alternative public transport systems and better 
integration  between  the  various  existing  modes  of  public  transport  part-financed  at 
Community level could reduce the serious problems of congestion which exist. 

The  possibility  of  receiving  additional  part-financing  is  restricted  to  bodies  in  regions  whose  development  is 
lagging behind (Objective 1) or those receiving transitional support under Objective 1 – Decision 1513/2002/EC 
of 27 June 2002 on the sixth framework programme, OJ L 232, 29.8.2002, Annex III. 

12 

 
 
  
 
 
 
                                                 
– 

– 

– 

The Commission Regulation on de minimis aids will be amended to extend its scope to firms 
in  the  transport  sector  (all  modes  of  transport  will  be  covered,  including  river  transport, 
except for aid for the purchase of vehicles by road hauliers). 

In the case of State aid for sea transport, the Commission recently authorised operating aid 
to  introduce  short-distance  services  between  ports  in  the  European  Union10.  Such  start-up 
aid, limited to the first three years of service, may not exceed 30% of the total cost of the 
new services introduced. It is also planned to simplify the rules (de minimis arrangements) 
on the grant of public service contracts for services to small islands generating traffic of less 
than  100  000  passengers  per  year.  Such  simplification  would  entail  exemption  from 
notifications and calls for tenders in respect of purely local transport. 

As part of the revision of the guidelines on State aids for regional purposes, it is proposed to 
authorise  compensation  for  the  extra  costs  entailed  in  the  transport  of  goods  within  the 
Union market and not simply, as now, within the national frontiers of the country concerned 
if  a  Member  State  suggests  such  arrangements  for  one  of  the  outermost  regions.  The 
calculation  of  the  extra  costs  will  be  based  on  the  transport  costs  incurred  between  an 
outermost region and the country to which it belongs, without the goods necessarily moving 
from  the  region  to  that  country  before  reaching  their  destination  in  one  of  the  Member 
States. 

3.2.2. 

State aid 

To  ensure  that  the  development  strategy  for  the  outermost  regions  is  effective  and  coherent,  the 
special situation of these regions must also be taken into account when the guidelines on State aids 
for regional purposes are revised. Accordingly, the Commission intends to propose that: 

– 

– 

– 

the  outermost  regions  eligible  under  the  ‘convergence’ objective  should  receive  special 
treatment and be eligible under Article 87(3)(a) of the Treaty; 

the  outermost  regions  eligible  under  the  ‘convergence’ objective  but  which,  under  the 
cohesion  policy,  will  suffer  from  the  ‘statistical exclusion  effect’  or  which  will  not  be 
covered by the new ‘convergence’ objective, will benefit  from a specific transitional State 
aid scheme setting limits to aid which will be comparable at first with those laid down under 
Article 87(3)(a). They will then be gradually reduced; 

the  Commission  also  intends  to  grant  the  outermost  regions  an  increase  of  10  percentage 
points  in  the  intensity  of  regional  aid  for  initial  investment  which  it  has  laid  down  for 
regions eligible for a derogation under Article 87(3)(a) and (c) in a similar socio-economic 
position. 

In the case of operating aid, the principle of non-degressivity and of non-limitation in time for all the 
outermost  regions  will  be  maintained,  whatever  the  purpose  of  the  aid  (environment,  research  and 
development, etc.), without prejudice to further adjustments which the Commission could consider. 
The provisions to ensure that the aid granted is proportionate to the handicaps to be offset will also be 
retained.  

In  procedural  terms,  a  draft  Commission  regulation  will  specify  the  formalities  concerning  the 
obligations to notify and monitor State aid. 

10 

OJ C 13, 17.1.2004, p. 3. 

13 

 
 
  
 
                                                 
3.2.3.  Traditional production in agriculture and fisheries 

Agricultural production in the outermost regions is extremely precarious because of the natural and 
economic  factors  affecting  production.  It  still  constitutes  a  substantial  part  of  the  local  economy, 
particularly in terms of jobs, and also helps support the local agri-food industry, which accounts for 
the bulk of industrial production in these regions. 

The guidelines for agriculture may be summarised as follows: 

– 

– 

– 

– 

Under the future Rural Development Fund, the Commission will ensure that the Community 
effort as regards the regional allocation of financial resources and the intensity of aid takes 
account of the specific handicaps of the outermost regions.  

In  the  case  of  bananas,  the  Commission  has  already  launched  an  exercise  to  evaluate  the 
market organisation and report to the Council and the European Parliament before the end of 
2004.  This  will  consider  possible  improvements  to  the  aid  mechanisms  for  Community 
producers. As regards the external aspect of the market organisation, at the current stage of 
reflection on its reform, the Commission intends to institute an appropriate level of tariffs on 
the basis of the latest available information. 

In its reform of the market organisation for sugar, the Commission will ensure differentiated 
treatment for the outermost regions based on their specific characteristics. 

As  regards  Council  Regulations  (EC)  Nos  1452/2001,  1453/2001  and  1454/2001  (on  the 
POSEI  measures in the agricultural sector) and following the 2003 reform of  the common 
agricultural  policy,  there  is  still  a  need  to  ensure  the  stability  of  the  resources  allocated  to 
maintaining  support  for  the  outermost  regions  and,  as  far  as  possible,  to  decentralise 
decision taking and simplify the management arrangements. 

In the fisheries sector, the Commission considers it particularly important that the common fisheries 
policy take account of the special features of the outermost regions. Consistency between the internal 
and external aspects of the CFP is also a constant concern. The other guidelines may be summarised 
as follows: 

– 

– 

– 

Under the future Financial Instrument for Fisheries Guidance, the Commission will ensure 
that  the  Community  effort  after  2006  under  the  common  fisheries  policy  (in  terms  of  the 
regional  allocation  of  financial  resources  and  the  intensity  of  aid)  takes  account  of  the 
specific handicaps of the outermost regions and of the needs identified. 

The  establishment  of  Regional  Advisory  Councils  should  provide  a  forum  where  the 
outermost  regions  can  participate  actively  in  discussions  on  the  sustainable  exploitation  of 
fisheries  resources  in  these  parts  of  the  oceans.  A  similar  body  should  be  set  up  for  the 
outermost regions, particularly the most isolated (French Guyana and Réunion) in their local 
maritime zone, which is close to that of non-member countries. 

The  guidelines  for  examining  State  aids  in  the  fisheries  and  aquaculture  sector  will  be 
revised  in  2004.  On  that  occasion,  particular  attention  will  be  paid  to  continuing  the 
favourable treatment which the outermost regions currently enjoy. 

14 

 
 
  
 
4. 

TOWARDS AN INSTRUMENT FOR THE SYSTEMATIC EVALUATION OF THE HANDICAPS OF THE 
OUTERMOST REGIONS AND COMMUNITY MEASURES  

The  Commission  already  possesses  many  facts  and  precise  quantified  data  on  the  extra  costs  and 
constraints affecting the outermost regions when Community policies are implemented. However, all 
these data need to be consolidated into a global and horizontal multisectoral system for evaluating the 
handicaps  of  the  outermost  regions  and  the  Community  measures,  particularly  the  forthcoming 
specific programme to take into account constraints. On that occasion, the Commission will ensure 
that  the  compensation  for  additional  costs  provided  by  the  various  instruments  complies  with  the 
rules on the cumulation of State aids.  

The  Commission  also  intends  to  further  analyse  the  factors  affecting  the  competitiveness  of  the 
outermost regions.  

It  will  do  so  jointly  with  the  national  and  regional  authorities,  which  will  require  the  regular 
collection  of  data  on  the  regions  in  question.  This  will  necessitate  the  networking  of  the  statistical 
institutes concerned. 

This analysis could also result in an adjustment of existing programmes in the various sectors such as 
agriculture  and  fisheries  and  the  assessment  of  measures  concerning  competition,  taxation  and 
regional policy. 

5. 

CONCLUSIONS 

The  European  Union  must  deal  with  one  of  the  biggest  challenges  in  its  history:  an  enlargement 
which  requires  fundamental  institutional  reforms,  a  reaffirmation  of  its  fundamental  values  and 
thorough consideration of the mechanisms to ensure its economic, social and territorial cohesion. 

To guarantee equal opportunities for all its regions and all its citizens and to promote growth it must 
introduce and operate relevant and effective mechanisms. 

This is the background against which these regions must not  only preserve the development which 
they have achieved, mainly thanks to Community measures, but also engage in a strategy of adjusting 
to both the specific situation of Europe and their own. 

These recommendations from the Commission look across the board at the main questions affecting 
the development and integration of the outermost regions. They are grouped around three pillars of 
analysis and measures: access by the outermost regions, their competitiveness and cooperation with 
the other regions of Europe and their integration into their area. 

On this basis, the Commission will develop for the outermost regions the measures described in this 
communication. This strategy will be implemented gradually in the light of the various calendars for 
the  policies  concerned  by  the  measures  to  be  taken.  Besides  the  proposals  for  measures  under  the 
various Community policies, two new initiatives will be proposed: a specific programme to take into 
account extra costs and an action plan for the ‘wider neighbourhood’. As part of the future rules on 
the  cohesion  policy,  the  Commission  will  put  forward  appropriate  legislative  measures  to  establish 
these  two  initiatives.  As  can  be  seen  from  the  assessment  in  the  Commission’s  report  detailing  the 
measures, it has already proposed to the Council a variety of measures and has continued the action 
programme which it described in its March 2000 report. It must now continue that work in line with 
the Lisbon and Göteborg process so that the outermost regions can achieve their full potential. 

15