Opinion of the European Economic and Social Committee on the  Proposal for a Regulation of the European Parliament and of the Council establishing the European Union Solidarity Fund (COM(2005) 108 final — 2005/0033 (COD))
Date: 2005-10-27
Institutions: European Economic and Social Committee
Subjects: EU financial instrument, emergency aid, man-made disaster, natural disaster, public health, terrorism

3.2.2006

EN

Official Journal of the European Union

C 28/69

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the
European Parliament and of the Council establishing the European Union Solidarity Fund’

(COM(2005) 108 final — 2005/0033 (COD))

(2006/C 28/14)

On 27 September 2005 the Council decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible
for preparing the Committee's work on the subject, adopted its opinion on 3 October 2005. The rappor-
teur was Mr Barros Vale.

At its 421st plenary session, held on 26 and 27 October 2005 (meeting of 27 October), the European
Economic and Social Committee adopted the following opinion nem. con. with 74 votes in favour and 3
abstensions.

1. Introduction

The European Union Solidarity Fund (EUSF) was set up
1.1
in 2002, with the aim of providing assistance to regions of
Member States or countries preparing for accession that have
suffered major disasters.

The EUSF should be flexible and as free of red tape as
1.2
possible, so that it can provide immediate assistance to the
affected regions.

The EUSF budget for the 2002-2006 period was set at

1.3
around EUR one billion per year.

1.4
The EUSF Regulation is due to be revised by the end of
2006, and it is this revision that the present opinion will
consider.

1.5
The current EUSF covers only natural disasters, which
means that it is extremely difficult to provide assistance in the
wake of industrial accidents, acts of terrorism or even a serious
public health emergency.

1.6
The current financial threshold for mobilising the EUSF
is very high (EUR 3 billion for costs arising from direct
damage, or over 0.6 % of GNI). This has led to more than two-
thirds of aid being provided under an exception clause, which
has an annual budget of only EUR 75 million.

2. The new proposal

2.1 General issues

The

geographical

2.1.1
remains
unchanged, covering the current Member States and also the
accession countries.

scope of

EUSF

the

The quantitative criterion: the financial threshold for
2.1.3.1
mobilising the EUSF is
lowered from EUR 3 billion to
EUR 1 billion, or from 0.6 % to 0.5 % of GNI, which will allow
the fund to be mobilised in more cases.

2.1.3.2
The political criterion: under some clearly justified
circumstances (specifically those in which the full scale of the
damage is not known at the time the decision is taken), the
Commission can mobilise the Fund even where the quantitative
criterion is not met.

2.1.4
eligible if they suffer the effects of the disaster.

The States neighbouring the affected country are also

2.1.5

The subsidiarity principle must also apply to the EUSF.

Under the proposal, the affected country may request
2.1.6
an advance payment (around 5 % of the total predicted cost of
eligible operations, up to a maximum of EUR 5 million), to be
granted immediately following the request for aid. This sum
must be repaid by the country in question should the request
subsequently prove ineligible.

2.1.7
The principle of proportionality must be applied when
aid is granted, giving consideration to the total amount of
damage, the size of the country and how serious the conse-
quences are likely to be in future.

The beneficiary State is entirely responsible for the
2.1.8
implementation of the grant and will have to submit a report
detailing expenditure, which must be fully justified and carried
out in accordance with the regulation.

2.1.2
Its thematic scope is now extended to cover technolo-
gical or industrial disasters, public health threats and acts of
terrorism as well as natural disasters.

2.1.9
remains at EUR 1 billion per year.

The sum proposed by the Commission for the EUSF

2.1.3
There are two criteria for defining a ‘disaster’ as being
eligible for assistance under the Fund, based on quantitative
and political considerations.

2.1.10
The EU budget does not provide for the resources
allocated to the EUSF. Whenever the Fund is mobilised, this is
done using an amending budget.

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If

the annual amount

2.1.11
the following
year's budget can be used — which will ensure that aid is
granted — provided that this is justified.

is exceeded,

3. General and specific comments

3.1
The European Economic and Social Committee (EESC)
welcomes the Commission's aim of extending the scope of the
Solidarity Fund and enabling it to provide a rapid response in
the event of a crisis.

3.2
The EESC is of the view, however, that various aspects
of the Commission proposal need fine-tuning in order to make
it more efficient, thus making the Fund a powerful and flexible
EU instrument that enables the inhabitants of the territories it
covers to benefit fully from its support. This contribution must
be free of red tape and must be governed by rules able to cater
for various types of disaster, whatever the cause, at the most
critical times for the communities it is designed to benefit. As
well as offering valuable help to restore infrastructure and
bring economic and social
life back to normal, it must also
provide an unequivocal political signal that Europe can send to
citizens affected by serious emergency situations.

3.3
Although the size of the proposed financial envelope
appears to be in line with the applications received in recent
years, the EESC doubts whether it could meet the needs of a
major disaster, such as an earthquake or massive tidal wave, a
Europe-wide pandemic or an accident or attack involving
weapons of mass destruction. Whilst these situations are indeed
exceptional,
they should be planned for, by means of a
mechanism that would also be exceptional, but that the Union
could call upon if a disaster of that magnitude ever occurred.

3.4
The rules governing access to the Fund must, the EESC
believes, be simple and clear and as free of red tape as possible,
but must also contain mechanisms that ensure transparency, as
well as the subsequent evaluation and monitoring of the uses
to which the resources made available to the beneficiary State
are put.

3.7
Estimating the damage will be quite a complex matter,
given the scale of the situations covered by the proposed Regu-
lation. The process is also likely to be highly fallible, given the
wide range of costs and actors involved, and the fact that it
covers damage to both public and private property. The short
space of time in which the application must be submitted to
the Commission, together with the great variety of interests
and material assets affected, may lead to a significant overesti-
the crisis
mation or underestimation of
concerned. States' requests must therefore be evaluated meticu-
lously, making use of specialists, historical data and earlier
records and adjusting the amount of finance provided in line
with the cost of living in the beneficiary State.

impact of

the

3.8 With regard to the type of costs that the Fund would
meet, the EESC approves of the eligible operations listed in
Article 4 of the proposed Regulation, but would like an addi-
tional category to be included with the following title:
'other
operations of public interest, designed to return the social and
economic life of
the affected populations and/or areas to
normality, while opening access to the EUSF to all civil society
players,
in accordance with provisions and safeguards to be
defined'. The aim of including this new point is to address the
unpredictable nature of the types and consequences of events
to be covered under the EUSF by making the decision-making
process in unusual situations more flexible,
in cases where
social and production structures would be threatened if there is
no possibility of assistance for damage to private property.

3.8.1 With reference to this wish to widen access it should
be noted that take-up of the appropriations available has been
small, not least because of the clause limiting use of the funds
to public expenditure only. This makes it impossible to address
situations which are in fact in keeping with the EUSF rationale.

3.8.2
adjust
reflect the regional dimension of some natural phenomena.

The threshold level should also be reviewed, so as to
to local needs and

the fund's intervention potential

3.5
Given the current EU budgetary climate and Europe's
economic situation, the EESC is not opposed to the proposed
variable form of budgeting with a pre-set ceiling. However, it
considers that the EUSF should be established as a Permanent
Independent Fund as soon as possible with its own fixed
annual budget, the ‘leftovers’ from which, gleaned from unused
annual funds, would form a reserve for major disasters.

3.6
Concerning the rules on deadlines for use, the EESC
considers that the Commission proposal is a step in the right
direction. It welcomes the planned rapid response mechanism
as it will help to ensure rapid assistance as soon as the facts
have been ascertained, which is the whole purpose of mobi-
lising the EUSF.

3.9
The EESC considers that the ultimate beneficiaries of the
Fund's operations must be the EU's citizens. It is only for logis-
tical or organisational reasons that States are the intermediate
beneficiaries, since it is they who receive the relevant resources
from the EUSF budget. By the same token, State organisations
should also not be the only recipients of public funds available
under the Fund; civil society organisations should also receive
these funds, since they are often involved in eligible operations
because States do not generally have the resources to deal with
the effects of this type of disaster without their help. Fire
brigades, voluntary civil society bodies working in the areas of
health or social assistance, and other civil society actors must
be properly compensated for their efforts and dedication and
for the expenses they incur, since their budgets are not gener-
ally geared to the enormous scale of such events.

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3.10
The EESC considers that the geographic scope of the
countries covered in the event of disaster should be reviewed,
so as to ensure that countries which do not share a border
with the affected country can also receive assistance. Large-
scale disasters (e.g. a nuclear disaster) may affect countries
which do not border the State in which the tragedy originated,
and they too should be eligible for assistance. Where other
States are affected, and provided that the Fund has been mobi-
lised, it must be implemented in all the States involved, even if
some of them do not meet the thresholds set out in Article 2
of the proposal.

3.11
The EESC also considers that the issue of neighbour-
hood comes into play as regards non-Member or non-Candi-
date States affected by an event originating in the EU or in a
Candidate State. If the EUSF is mobilised for an event origin-
ating in or caused within this geographical area, the other
neighbouring States would also warrant support
from the
Union, either under the EUSF or under the other international
cooperation instruments in force, provided that this does not
affect and thus hamper the specific cooperation programmes
already in place.

The EESC believes that the Fund should also be mobi-
3.12
lised for disasters arising from an accumulation or continuation
of situations not immediately identified as being particularly
damaging (for example a serious drought); the point at which
they receive consideration would have to be clarified. The
climate changes that have been taking place, caused partly by
global warming — for which the Union as a whole also bears
some responsibility — affect some States more than others,
and it would be neither reasonable nor supportive for the Euro-
pean Union to shirk its obligations, as regards either the causes
of climate change or its consequences.

The comments gathered on the ground during the
3.12.1
EESC fact-finding visit
to Spain and Portugal on 14-16
September 2005 highlighted the need, in a number of cases, to
dovetail the use of:

— the EUSF,

in its rapid response capacity, to provide an
immediate solution to urgent needs, both to help the
affected communities and to provide material assistance;

— the Funds that offer more structural assistance, so as to
provide long-term solutions to more fundamental problems,
for example by creating infrastructure to deal with drought,
reafforestation, and the development of alternative activities
in areas ravaged by fires.

The integration of EUSF assistance in a wider context
3.12.2
large-scale long-term measures should be an important
of
criterion for the Commission when it selects projects. This
would improve the overall effectiveness of both the EUSF and
the Structural Funds.

3.12.3
Like floods, tornados and severe storms, which are
already covered, the issues of water supply, useable infrastruc-

ture and providing social or health-related assistance for the
population in unforeseeable situations of drought or heat
waves must not be excluded from the list of phenomena that
the EUSF should support. The regulation should provide for
these situations and clearly define at what point they become
worthy of consideration, since they are not caused by a rapid
and immediately identifiable event but instead by the ongoing
deterioration of a given situation (climate-related or otherwise).

3.13
To this end, an obligation could be introduced for the
national authority responsible for water management to issue
an ‘official declaration of serious drought’, based on uniform
objective criteria to be followed by the water management
authorities in all the Member States.

3.14
The EESC also believes that the Member States and the
Union must establish clear rules concerning the obligation of
the EU insurance system to provide cover for certain types of
risk which insurance companies often try to avoid. This is all
the more important because the EUSF and national aid do not
generally cover damage sustained by private individuals, the
cost of which is usually much higher than that of the assistance
which public authorities feel obliged to provide in the case of
problems that affect a community as a whole.

Lastly, the EESC considers that work on risk prevention
3.15
must be encouraged at all
levels to mitigate or nullify the
consequences of such situations, by forecasting events of this
nature, preventing disasters, and preparing and setting in
to safeguard
motion early response mechanisms in order
human life and wellbeing and to prevent the destruction of
infrastructure and of material and immaterial assets. The EESC
would not, therefore, object to the inclusion in the Regulation
of a restrictive clause which, in order to encourage prevention,
would limit, reduce or eliminate EUSF support in proven cases
of negligence on the part of the public authorities of the State
in question, provided that the State is able to cope financially
with the event's aftermath. The EUSF could nevertheless still
provide assistance in such cases, in the form of a loan rather
than a grant, because it is the populations affected by the
disaster that
is ultimately intended to benefit.
Giving EU grants to States which have been negligent creates a
climate of slackness and irresponsibility and increases the risk
of certain types of disaster which could in some cases be
prevented.

the support

4. Conclusions

4.1
The EESC reiterates the position it has always main-
tained, which is to support prevention, accountability and the
It also attaches considerable
forecasting of serious disasters.
importance, however, to the existence of a mechanism such as
the EUSF, provided that this is adjusted to take account of the
criticism and suggestions made in point 3 above.

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4.2
The EESC welcomes the improvements made in the
proposed Regulation, but considers that these are insufficient
to enable the EUSF to achieve its full potential and capacity to
take appropriate action.

4.3
The Committee thinks that the Commission proposal
should be amended in three ways so as to gear it more effec-
tively to practical requirements:

a) extend its scope to cover other forms of disaster, particularly

droughts;

b) lower the threshold figures for the scale of damage (which
are too high, and exclude most recent disasters) and/or give

the Commission greater powers of discretion, so that it
could recognise disasters with a serious regional impact;

c) be more flexible about the types of eligible expenditure, by
introducing a new, more comprehensive clause to cover
other significant costs that are not included in the Commis-
sion's list of ‘eligible operations’.

An own-initiative opinion evaluating the principles and
4.4
operation of the Solidarity Fund and its ability to meet the
needs of the EU's Member States and regions could also be
drawn up at an early opportunity, as a further way of addres-
sing the problems already identified.

Brussels, 27 October 2005.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

Opinion of the European Economic and Social Committee on ‘Ethical Trade and Consumer Assur-
ance Schemes’

(2006/C 28/15)

On 8 February 2005, the European Economic and Social Committee, after a request received on February
2005 from the next UK's Presidency of the EU approved to draw an opinion on Ethical Trade and Consumer
Assurance Schemes.

The Section for External Relations, which was responsible for preparing the Committee's work on the
subject, adopted its opinion on 10 October 2005. The rapporteur was Mr Adams.

At its 421st plenary session, held on 26 and 27 October 2005 (meeting of 27 October 2005), the European
Economic and Social Committee adopted the following opinion by 75 votes in favour, 12 against and 10
abstentions.

Executive Summary

Ethical trade (in the various forms which the Opinion
1.
defines) (1) can make a significant contribution to sustainable
development and to the direct engagement of consumers in a
positive and empowering response to globalisation.

Using a knowledge-based set of systems it can inform
2.
both the provider and producer of goods and services and
stimulate market-centred action and consumer
response.
Europe has global leadership in this field. Such activity ties in
with the Lisbon Strategy and simultaneously contributes to the
Millennium Development Goals.

(1) As these terms are subject to differing interpretations a definition of

key terms used in this opinion is clearly set out in section 9.

3.
Proliferating consumer assurance schemes seek to offer a
range of ethical, social and environmental guarantees. Most
seek to address one or a small number of issues specific to that
product, such as fair trade, organic production, sustainable
forests, environmental impact, child labour or animal welfare.

4.
The Opinion critically explores the necessary require-
ments of such schemes to be effective, the adequacy of policy
definition within the EU and the urgently required need for
clarification and co-ordination. It suggest practical steps which
EU institutions, Member States and regional/local communities
and authorities can take to consolidate, underpin and enhance
these initiatives.

5.
The Opinion also suggests a policy framework which will
help the various institutions of the EU and a wide range of
ethical trade initiatives ask the same questions about securing