Report from the Commission - European Union Solidarity Fund Annual Report 2006
Date: 2007-10-25
Institutions: European Commission
Subjects: EU financial instrument, activity report, emergency aid, fund (EU), man-made disaster, natural disaster

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.10.2007 
COM(2007) 632 final 

REPORT FROM THE COMMISSION 

European Union Solidarity Fund 
Annual report 2006 

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REPORT FROM THE COMMISSION 

European Union Solidarity Fund 
Annual report 2006 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

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

New applications received in 2006 .............................................................................. 3 

Applications received in 2005...................................................................................... 6 

Special issue: The use of exchange rates outside the Euro-Zone................................. 7 

Financing...................................................................................................................... 7 

Monitoring ................................................................................................................... 8 

Closures........................................................................................................................ 9 

Proposal for a new Solidarity Fund Regulation ......................................................... 10 

Conclusions ................................................................................................................ 10 

Annex 1: European Union Solidarity Fund applications received or completed in 2006........ 12 

Annex 2: Criteria to mobilise the EU Solidarity Fund............................................................. 13 

Annex 3: Determination of the amount of aid.......................................................................... 14 

Annex 4: Thresholds for major disasters applicable in 2006 ................................................... 15 

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1. 

INTRODUCTION 

The European Union Solidarity Fund was set up on 15 November 20021. Article 12 
of the Solidarity Fund Regulation provides that a report on the activity of the Fund in 
the previous year be presented to the European Parliament and to the Council. The 
present  report  presents  the  activities  of  the  Fund  in  2006  covering,  as  in  previous 
reports, three areas: the treatment of new applications received in the course of 2006, 
monitoring  of  the  ongoing  implementation  of  grants,  and  the  assessment  of 
implementation reports with a view to preparing these for closure. 

In addition, the report presents the progress which has been made with regard to the 
proposal for a new Regulation on the Solidarity Fund presented by the Commission 
on  6  April  2005  for  the  period  after  the  expiry  of  the  2000-2006  Financial 
Perspectives. 

2. 

NEW APPLICATIONS RECEIVED IN 2006 

In  2006  the  Commission  received  four  new  applications  for  Solidarity  Fund 
assistance.  Annex  1  gives  a  detailed  overview  of  all  cases.  These  were  assessed  in 
the light of the criteria set out in the Regulation and of the information that applicant 
States were able to provide. 

United Kingdom 

On 17 February 2006 the UK submitted an application for Solidarity Fund assistance 
relating to the explosions and fire at the Buncefield oil storage depot in Hertfordshire 
which occurred  on 11 December 2005. The explosions caused damage to property, 
infrastructure and the environment and lead to disruptions of business. 2000 people 
were temporarily evacuated from their homes. The total direct damage caused by the 
disaster  was  EUR 730  million.  The  population  in  the  affected  area  amounts  to 
138 000  people,  of  which  the  UK  authorities  estimated  that  a  maximum  of  10 000 
had been affected. 

The  Regulation  states  in  Article  2 (1)  that  it  applies  mainly  to  major  natural 
disasters2. Although it thus does not exclude the eligibility of technological disasters, 
these could only be considered eligible under exceptional circumstances3. 

The  normal  threshold  for  mobilising  the  EUSF  in  the  UK  in  2006  was 
EUR 3.203 billion  (i.e.  EUR  3  billion  in  2002  prices).  As  the  direct  damage  of  the 
explosion  was  considerably  lower  than  the  normal  threshold  for  mobilising  the 

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Council  Regulation  (EC)  N°  2012/2002  of  11  November  2002  establishing  the  European  Union 
Solidarity Fund, OJ L 311/3 of 14.11.2002, in the following referred to as “the Regulation”. 
Article  2(1)  states:  “At  the  request  of  a  Member  State  or  country  involved  in  accession  negotiations 
with the European Union, hereinafter referred to as "beneficiary State", assistance from the Fund may 
be mainly mobilised when a major natural disaster with serious repercussions on living conditions, the 
natural  environment  or  the  economy  in  one  or  more  regions  or  one  or  more  countries  occurs  on  the 
territory of that State.”  
The only case so far in which the EUSF was mobilised for a non-natural disaster concerned the sinking 
of the “Prestige” oil tanker off the Spanish coast. 

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EUSF, the UK submitted the application under the “extraordinary regional disaster” 
criteria contained in Article 2(2) of the Regulation, which provides for the use of the 
EUSF  if  a  set  of  very  specific  conditions  are  met4.  The  Regulation  requires  the 
Commission to apply these conditions “with the utmost rigour”. 

The  assessment  of  the  application  indicated  that,  while  the  explosion  had  caused 
some notable damage locally, the application did not meet the conditions set out by 
the  Regulation  for  mobilising  the  Fund.  The  damages  were  considerably  below  the 
normal  threshold  for  mobilising  the  Fund  (representing  less  than  23 %  of  that 
threshold) and only a very small part of the population of the region was affected. In 
the  light  of  these  circumstances  the  UK  authorities  decided  to  withdraw  the 
application by letter received by the Commission on 22 March 2006. 

Greece 

On 22 May 2006 the Greek authorities submitted an application relating to flooding 
that occurred in March 2006 in the area of the Evros River on the eastern border of 
Greece.  Supplementary  information  was  provided  in  July  and  November  2006;  the 
translation of this information from the original Greek caused a substantial delay for 
the assessment of the application. This was the second application within 13 months 
relating to flooding in the Evros river region. The first application, presented in 2005, 
had been found not eligible and was rejected5. 

The  2006  flooding  caused  direct  damage  of  some  EUR 372 million,  almost  three 
times  the  amount  of  damage  caused  in  the  preceding  year,  but  still  lower  than  the 
normal threshold for mobilising the Solidarity Fund of EUR 1.004 billion, i.e. 0.6% 
of Greece’s Gross National Income (GNI). The application was therefore examined 
under the criteria for extraordinary regional disaster. 

Over  70%  of  the  some  180 000  persons  constituting  the  population  in  the  flooded 
area were found to be directly affected. Major damage was caused to networks and 
infrastructure  in  the  area  and  paralysed  economic  activity  in  the  region.  Around 
100 million m²  of  farmland  were  flooded  along  the  river  banks  and  an  estimated 
2 000 head of livestock were lost. The floods caused total destruction of agricultural 
produce  while  the  slow  drainage  of  the  flooded  areas  removed  any  possibility  of 
planting  new  crops.  Due  to  the  lack  of  agricultural  produce  much  of  the  local 
industry was prevented from engaging in any agricultural, processing or commercial 
activity  in  a  region  in  which  the  main  occupation  of  90%  of  the  population  is 
agriculture.  The  extensive  damage  to  the  irrigation  and  water  supply  network 
resulted in the need to distribute bottled water in a number of municipalities. Repair 
of  the  water  supply  networks,  identification  of  alternative  bore  holes  unaffected  by 
contamination  of  the  hydrological  basin  and  the  search  for  new  springs  were 
expected to create a critical situation in the wider area for more than one year. It has 
also been noted that the negative effect on economic activity caused by the floods, 
considered  the  worst  over  the  last  50  years,  took  place  in  an  area  that  has  already 

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"  …..an  extraordinary  disaster,  mainly  a  natural  one,  affecting  the  major  part  of  the  population  of  a 
region,  with  serious  and  lasting  repercussions  on  living  conditions  and  the  economic  stability  of  the 
region" 
For details cf Annual Report 2005 COM(2006)444 final 

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been severely affected by floods in 2005. This cumulative effect has severely hit the 
resilience of the local economy 

Early  2007  the  Commission  therefore  decided  to  propose  the  mobilisation  of  the 
Fund and to grant an amount of EUR 9.3 million. 

Hungary 

Following the flooding disaster that hit Hungary in April/May 2006, the Hungarian 
authorities submitted to the Commission on 9 June an application for Solidarity Fund 
assistance.  The  application  was  presented  in  English  thus  requiring  no  translation 
before  the  Commission  services  could  carry  out  its  assessment.  Additional 
information requested by the Commission and necessary to complete the assessment 
was received on 21 September. The flooding qualified as a major disaster within the 
meaning of the Regulation as the direct damages of some EUR 560 million exceeded 
the threshold for mobilising the Fund (EUR 459.494 million, which represents 0.6% 
of Hungary's GNI). 

The disaster affected over 1.5 million inhabitants in 8 of the Hungary's 20 counties 
along the catchment areas of the Danube and Tisza rivers. The Hungarian authorities 
reported  serious  damage  to  infrastructures,  in  particular  in  the  water/waste  water 
sector  (EUR 136 million),  for  flood  protection  (EUR 85 million),  in  the  transport 
sector  (EUR 93 million)  as  well  as  in  agriculture  (over  EUR 61 million),  to  the 
cultural heritage, and to several natural parks. 

The Commission decided on 1 December 2006 to mobilise the Solidarity Fund and 
proposed  to  grant  financial  aid  amounting  to  EUR 15 million.  The  corresponding 
amending budget proposal - covering the Hungarian as well as the Greek case - was 
presented  in  2007,  as  soon  as  the  assessment  of  the  Greek  application  had  been 
completed. 

Spain 

Following  the  forest  fires  that  affected  Galicia  during  August  2006,  the  Spanish 
authorities, on 6 October, submitted to the Commission an application for Solidarity 
Fund  assistance.  The  application  was  presented  in  Spanish  and  the  translation  took 
more than 4 weeks. 

According  to  the  information  provided  by  the  Spanish  authorities,  the  fires  caused 
total  damage  of  some  EUR 91 million  representing  less  than  3%  of  the  normal 
threshold for mobilising the Solidarity Fund applicable to Spain (EUR 3.203 billion, 
i.e.  EUR 3 billion  in  2002  prices).  As  total  damage  remained  below  the  normal 
threshold for mobilising the Solidarity Fund the application was examined under the 
criteria for “extraordinary regional disaster”. 

The Spanish application related to Galicia as a whole which has a total population of 
2.760  million  inhabitants.  A  total  of  1908  fires  were  recorded,  occurring  on  the 
territory of 128 municipalities mostly in the western part of Galicia with a population 
of  1.5 million  inhabitants,  including  major  cities  like  Santiago  de  Compostela, 
Ourense and Vigo. While there was evidence of extensive damage in forestry and to 
the  environment  the  application  was  able  to  provide  little  evidence  for  damage 

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directly  affecting  the  population.  Overall,  the  evidence  presented  did  not  allow  the 
Commission to conclude that the majority  of the population of the region to which 
the application related had been directly affected. 

The possibility - as hinted at in the application - that a number of the fires had non-
natural origins was not further explored. 

In its assessment the Commission concluded that while the evidence provided by the 
Spanish authorities suggested that serious effects on the environment were incurred, 
which would also negatively affect living  conditions, the disaster did not affect the 
major  part  of  the  population  and  there  was  no  evidence  of  lasting  effects  on  the 
economic stability of the region. The latter was supported by the fact that the damage 
represents only 0.2% of the GDP of Galicia. 

The Commission decided therefore on 20 February 2007 to reject the application and 
informed the Spanish authorities accordingly. 

3. 

APPLICATIONS RECEIVED IN 2005 

The  assessment  -  under  the  exceptional  regional  disaster  criteria  -  of  the  Austrian 
application of 19 October 2005, relating to flooding in the Länder of Vorarlberg and 
Tyrol in August 2005 was completed after additional information was received from 
the Austrian authorities on 12 January 2006. 

The  total  direct  damage  was  estimated  at  EUR 591.94  million,  representing 
approximately  0.27%  of  Austria’s  GNI  or  45%  of  the  normal  threshold  for 
mobilising the EUSF in Austria (0.6% of GNI). Over 60% of the 98 000 inhabitants 
in the area concerned by the flooding were found to be seriously affected. 

that 

Evidence  showed 
lasting  disruption  of 
flooding  caused  severe  and 
infrastructures, in particular in the fields of transport, water/waste water and energy 
with  lasting  effects  for  all  sectors  of  economic  activity,  including  agriculture. 
Damage  in  the  private  sector  was  characterised  by  a  high  number  of  destroyed 
houses (over 1200 alone in Tyrol), serious damage to businesses and in particular in 
tourism,  the  region’s  main  source  of  income.  The  effects  of  the  flooding  were 
expected to be felt for well over a year. Taking into account the exceptional damage 
the consequences of this flood in a region of almost 100 000 inhabitants could not be 
seen as merely local. The Commission therefore concluded that the Solidarity Fund 
should  be  mobilised  and  proposed 
to 
EUR 14.8 million 

to  grant  financial  aid  amounting 

The assessment of the two flooding related disasters for which Romania had applied 
in 2005 was completed early in 2006 once the Romanian authorities had provided on 
29 December 2005 the information requested by the Commission. On 10 March the 
Commission decided to mobilise the Solidarity Fund and to propose aid amounting 
to  EUR 18.8  million  for  the  spring  flooding  and  EUR 52.4 million  for  the  summer 
flooding. 

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On  23 December 2005  the  Commission  had  already  proposed  to  grant  Bulgaria 
financial  aid  for  the  two  flooding  disasters  that  had  occurred  in  the  spring  and 
summer of 2005 amounting, respectively, to EUR 9.7 million and EUR 10.6 million. 

On  27  April  2006  the  Council  and  the  Parliament  adopted  the  Commission's 
amending  budget  proposal  which  covered  in  one  single  package  five  grants  to 
Austria, Romania and Bulgaria and the respective grant decisions could be adopted 
on 19 June for Bulgaria, on 29 June for Austria and on 26 July for Romania. 

4. 

SPECIAL ISSUE: THE USE OF EXCHANGE RATES OUTSIDE THE EURO-ZONE 

Recent  applications  for  aid  under  the  Solidarity  Fund  from  countries  outside  the 
Euro-zone raised the question of which exchange rate to apply for the conversion of 
the grant into national currency. The Regulation does not contain a specific provision 
on the use of the Euro. 

The  issue  raises  particular  problems  in  case  of  exchange  rate  fluctuations,  for 
example between the date of application and the date on which the grant is credited 
to the beneficiary State's bank account. If the relevant conversion date is the date of 
application  and  there  is  a  revaluation  of  the  national  currency  with  respect  to  the 
Euro  in  the  period  up  until  the  date  of  payment,  then  the  aid  amount  in  national 
currency will decrease. Of course, possible effects caused by exchange rate changes 
between  the  date  of  application  and  the  payment  date  can  be  of  both  positive  and 
negative nature. 

In all cases up to now, the conversion into Euro has been carried out on the basis of 
the  exchange  rate  at  the  time  of  application.  In  order  to  simplify  the  financial 
execution of the grant the Commission so far asked beneficiary States to apply this 
single  exchange  rate  throughout  implementation  and  as  the  basis  for  the  final 
implementation report and the statement on the financial execution of the grant. The 
Commission intends to continue its current practice, in line with the underlying idea 
of the EUSF of an un-bureaucratic instrument. 

In addition, the Commission intends to continue its practice to require the beneficiary 
State to apply as the reference exchange rate the Commission’s financial accounting 
rate. The rates to be used for that purpose are published in the Official Journal and 
can be found in the following electronic address: 

http://europa.eu.int/comm/budget/inforeuro. 

5. 

FINANCING 

The five cases from 2005 for which the procedure had not yet been completed before 
the end of the year (floods in Romania, Bulgaria and Austria) were dealt with in one 
single  amending  budget.  Preliminary  Draft  Amending  Budget  No 1/20066  was 
approved  by  the  Budgetary  Authority  on  27  April  2006.  The  payments  could  be 
made  after  adoption  of  the  grant  decision  and  after  the  implementation  agreement 

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SEC(2006)325 final of 10.3.2006 

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was signed. In all five cases payments were delayed due to the late presentation by 
the beneficiary States of proposals for the use to be made of the grants which have to 
be included in the implementation agreement (for details cf. Annex 1) 

The amounts of aid in each case were determined on the basis of the standard method 
previously  developed  by  the  Commission  and  explained  in  detail  in  the  2002/2003 
annual report (see also Annex 3 of the present report). The amounts of aid in 2006 
were the following: 

Beneficiary

Disaster 

Austria 

flooding 

Romania 

spring flooding 

Romania 

summer flooding 

Bulgaria 

spring flooding 

Bulgaria 

summer flooding 

Total 

Category 

regional 

major 

major 

major 

major 

Amount of 
aid (EUR) 

14°798°589

18°797°800

52°406°870

9°722°183

10°632°185

106°357°627

The  significant  amount  of  required  resources  for  the  five  cases  relating  to  flooding 
and  the  unavailability  of  corresponding  free  payment  appropriations  at  the  time  of 
the  budgetary  procedure  made  it  necessary  to  include  a  request  for  additional 
payment appropriations in Preliminary Draft Amending Budget 1/2006. 

For the he applications from Greece and Hungary received in 2006 the Commission 
presented  Preliminary  Draft  Amending  Budget  No 2/20077  which  was  approved  by 
the Budgetary Authority on 7 June 2007; the annual report of next year will report on 
this.  

6. 

MONITORING 

In 2006,  the  Commission carried  out seven monitoring visits: the first visit in June 
concerned  Slovakia  (Tatra  storm),  a  second  series  of  visits  concerned  the  four 
countries  (Sweden,  Estonia,  Latvia  and  Lithuania)  that  had  been  affected  by  the 
major  storm  of  January  2005.  Visits  to  Romania  and  Bulgaria  were  carried  out  in 
respectively  October  and  November,  both  concerning  the  implementation  of  the 
Solidarity Fund grants following the double flood disasters of 2005. 

As  on  previous  occasions  these  visits  were  highly  welcomed  by  the  authorities 
concerned  and  provided  an  opportunity  to  clarify  technical  issues  such  as  those 
concerning eligibility of expenditure and control issues. The Slovak authorities raised 
an  issue  concerning  the  rate  of  exchange  to  be  applied  by  beneficiaries  outside  the 
Euro-zone.  The  agreed  solution  (see  point  4  above)  was  relevant  for  all  other 
beneficiaries  who  had  received  grants  in  2005  and  2006  and  was  subsequently 
generally applied. The visits also allowed the Commission to gain an impression of 
the  added  value  of  the  Solidarity  Fund  and  to  gather  information  on  the 

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COM(2007)148 final of 28.3.2007 

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implementation systems. It was found that the implementation systems put in place 
varied from one country to another but could generally be regarded as being effective 
and transparent, most countries using the structures and procedures already in place 
for  the  Structural  Funds.  Implementation  was  found  to  be  progressing  at  a 
satisfactory  pace  and  in  most  countries  appropriate  steps  had  been  made  to  ensure 
respect for monitoring and control obligations. Where this seemed not fully to be the 
case  the  Commission  reiterated  the  necessity  to  make  monitoring  and  control  an 
integral part of the implementation systems from the outset. 

7. 

CLOSURES 

Article  8(2)  of  Regulation  2012/2002  states  that  no  later  than  six  months  after  the 
expiry  of  the  one-year  period  from  the  date  of  disbursement  of  the  grant,  the 
beneficiary  State  shall  present  a  report  on  the  financial  execution  of  the  grant 
(hereinafter: an “implementation report”)with a statement justifying the expenditure 
(hereinafter:  a  “validity  statement”).  At  the  end  of  this  procedure,  the  Commission 
shall wind up the assistance from the Fund. 

As  regards  the  closure  of  assistance  of  the  two  Italian  cases  for  which  the 
implementation  report  was  received  on  18  November  2005  (Earthquake-
Molise/Apulia  and  Volcanic  eruption-Etna),  the  Commission  noted  that  the  full 
amount  of  the  EUSF  grants  (i.e.  EUR 16 798 000  for  the  Mount  Etna  eruption  and 
EUR 30 826  000  for  the  Molise/Apulia  earthquakes)  has  been  spent  by  the  Italian 
authorities.  The  Commission  requested  a  number  of  clarifications  from  the  Italian 
authorities  on  the  validity  statement  relating  to  the  financial  execution  of  the  grant 
(under  Article  9  of  the  implementation  agreement),  which  were  received  on 
22 November 2006.  After  a  thorough  analysis  of  the  additional  information,  the 
Commission wound up the assistance on 30 April 2007. 

indicated 

As  regards  the  aid  granted  to  Portugal  (forest  fires  in  2003),  for  which  the 
implementation  report  was  received  in  June  2005,  the  Commission  received 
additional  information  from  the  Portuguese  authorities  on  8  May  2006  and 
25 August 2006.  The  Portuguese  authorities 
that  an  amount  of 
EUR 42 359 112.21 (out of the total grant of EUR 48 539 000) has been effectively 
spent.  Consequently,  a  balance  of  EUR 6 179 887.79  will  have  to  be  recovered.  In 
addition,  in  the  statement  on  the  closure  of  assistance,  the  Portuguese  authorities 
indicated that, following an audit, a sum of EUR 211 613.80 cannot be confirmed as 
being  eligible  under  the  Solidarity  Fund.  Consequently,  this  amount  will  be 
recovered as well. However, at the end of the period covered by this annual report it 
was  not  yet  possible  to  wind  up  the  assistance  as  a  confirmation  of  the  damage 
estimates in the application was still pending. Article 10(2) of the Regulation states 
that in case of significantly lower valuation of the damage incurred, as shown by new 
elements,  the  Commission  shall  require  the  beneficiary  State  to  reimburse  a 
corresponding  amount  of  the  grant.  Therefore,  the  Portuguese  authorities  were 
requested  to  confirm  the  amount  of  direct  damage.  By  letter  received  on  16 April 
2007  the  Portuguese  authorities  confirmed  the  amount  of  direct  damage  that  was 
effectively  established  (EUR 1302  million  as  opposed  to  EUR 1228  million 
estimated  in  the  application).  Consequently,  the  total  amount  to  be  recovered  is 
EUR 6 391 501.59.  The  procedures  for  the  recovery  of  this  amount  have  been 
initiated. 

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In  2006,  the  Commission  received  final  implementation  reports  for  grants  made  in 
2004  from  Spain  (forest  fires  at  the  Portuguese  border)  and  Malta  (flooding). 
Additional information was received on the implementation report concerning the aid 
granted after the "Prestige"-oil spill in Spain. At the end of the period covered by this 
annual  report  the  assessment  of  these implementation  reports  was  still  ongoing.  As 
regards the aid of EUR 19.625 million granted to France in relation of the floods in 
the  Rhone  delta  in  2004,  for  which  the  implementation  report  was  also  received  in 
2006,  the  assistance  was  wound  up  on  29  November  2006.  Since  an  amount  of 
EUR 135 492.09  remained  unspent,  a  recovery  procedure  has  been  initiated  by  the 
Commission. 

8. 

PROPOSAL FOR A NEW SOLIDARITY FUND REGULATION 

After  the  Financial  Counsellors  group  of  the  Council  had  started  examining  the 
Commission  proposal  for  a  new  Solidarity  Fund  Regulation  under  the  UK  Council 
Presidency,  this  work  was  intensified  during  the  first  months  under  the  Austrian 
Presidency in 2006. While the widening of the scope of the instrument was opposed 
by a few Member States, a vast majority of delegations expressed reservations about 
nearly all other new elements contained in the proposal. The Commission presented a 
series of working papers to demonstrate that those concerns - in particular regarding 
the financing of the reviewed Fund - were unfounded, but no progress was made. At 
the  meeting  of  15  March  the  Austrian  Presidency  concluded  not  to  pursue  the 
proposal further for the time being. 

By contrast, the European Parliament adopted on 18 May the very favourable Berend 
report, which had been prepared by the REGI Committee. While requesting a series 
of  amendments,  the  report  generally  supported  all  of  the  elements  contained  in  the 
Commission  proposal.  Following  the  adoption  of  the  Berend  report  the  item  was 
again put on the agenda of the Council working group on 30 May, although this new 
element did not produce any change in the position of the Member States. 

The  Commission  undertook  a  series  of  attempts,  including  at  the  level  of  the 
Commission  President,  to  convince  Member  States  and  in  particular  the  incoming 
Finnish and, towards the end of 2006, the German Council Presidencies to re-launch 
the debate on the proposal. However, by the end of 2006 no progress was made. 

9. 

CONCLUSIONS 

A  total  of  four  new  applications  for  Solidarity  Fund  assistance  were  received  in 
2006,  a  limited  number  compared  to  the  three  preceding  years.  The  Hungarian 
application was the only one relating to a major natural disaster - the main field of 
application of the Solidarity Fund - for which the Commission was able to propose 
the mobilisation of the Fund. It was subsequently endorsed by the Budget Authority. 

Three other applications were presented under the regional disaster criteria, whereby 
one application - the one relating to the explosion at the Buncefield oil depot - was 
withdrawn by the UK government in view of the doubts about its appropriateness in 
the light of the criteria in the Regulation, which generally tend to exclude support in 
the case of disasters of technological origin (note: the proposal for a new Solidarity 

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Fund  Regulation  makes  explicit  reference 
technological  disasters).  The 
information provided in support of the Greek application relating to the flooding of 
the  Evros  River,  the  second  of  the  regional  disaster  applications  in  2006,  was 
considered  to  satisfy  the  criteria  and  the  mobilisation  of  the  Fund  was  therefore 
proposed. The application relating to the forest fires in Galicia was rejected because 
the criteria in the Regulation were not met. 

to 

For  applications  in  2006,  the  Commission  proposed  a  total  amount  of  aid  from  the 
Fund  of  EUR 24.4 million.  After  2004,  this  represented  the  second  lowest  annual 
amount since the creation of the Fund in 2002. 

While on a smaller scale than in preceding years, experience in 2006 confirmed the 
general trend by which the majority of applications for Solidarity Fund assistance are 
not  presented  for  major  disasters  which  represent  the  main  scope  of  the  Fund,  but 
under the exceptional criteria for regional disasters. These criteria - which according 
to the Regulation are to be examined by the Commission “with the utmost rigour” - 
continue to be relatively difficult to meet. The rate of unsuccessful applications for 
the  regional  (exceptional)  criteria,  at  around  60%,  continues  to  be  high.  For  major 
disaster  applications  for  which  only  a  single  quantitative  criterion  applies,  the 
positive assessments have so far a rate of 100%. 

The  Commission  continues  to  believe  that,  on  the  one  hand,  by  using  a  single 
criterion  to  trigger  utilisation  of  the  Fund  with  lower  quantitative  thresholds  than 
applied today and, on  the  other  hand, by suppressing  the present  (non-quantitative) 
‘exceptional’ regional disaster criteria, the efficient use of the Solidarity Fund would 
be  improved.  At  the  same  time,  it  would  help  avoiding  the  frustration  that  follows 
rejected applications because the exceptional criteria are very difficult to meet. 

On  the  basis  of  past  evidence,  such  changes  would  be  broadly  neutral  in  the  sense 
that the same decisions to mobilise the Fund would have been taken under the new 
criteria. But, by clarifying the criteria, and removing the less straightforward regional 
criteria of the current Regulation, applicant States would have a clearer signal as to 
whether or not investing considerable resources in making an EUSF application. As 
such, the new criteria would make a concrete contribution to "better regulation". 

This is why the Commission hopes that the Council will be ready to consider again 
the  Commission's  proposal  of  6  April  2005  for  a  new  Solidarity  Fund  Regulation, 
which contained the relevant provisions. Moreover, widening the scope of the Fund 
to disasters of other than natural origin would offer the Community an opportunity 
for the Community to provide an important expression of its solidarity in the event of 
crises other than those of natural origin. 

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Annex 1 
European Union Solidarity Fund applications received or completed in 2006 

Applicant Country 

RO 

Name and nature of 
disaster 

Spring 
flooding 

BG 

Spring 
flooding 

BG 

Summer 
flooding 

RO 

Summer 
flooding 

AT 

UK 

Flooding 

Explosion 

EL 

Evros 
 flooding 

HU 

ES 

Flooding 

Forest fires 

First damage date 

15/04/2005 

25/05/2005 

5/08/2005 

2/07/2005 

22/08/2005 

11/12/2005 

13/03/2006 

3/04/2006 

4/08/2006 

22/06/05 

13/07/05 

24/08/05 

9/09/05 

19/10/05 

17/02/2006 

22/05/2006 

9/06/2006 

6/10/2006 

29/12/05 

30/09/05 

6/10/05 

29/12/05 

12/1/06 

- 

13/11/06 

21/906 

6/10/06 

302.114 

103.274 

103.274 

302.114 

1 336.348 

3 202 
578.000 

1 004.136 

459.492 

3 202.578 

489.530 

222.279 

237.446 

1 049.681 

591.944 

700.00*** 

372.26 

519.10 

90.96 

major 

major 

major 

major 

162.03% 

215.23% 

229.92% 

347.45% 

regional 

44.30% 

 (regional)  

 regional  

0.02% 

37.07% 

 major  

112.97% 

 regional  

2.84% 

160.867 

144.478 

190.433 

259.176 

196.242 

32.9% 

11.69% 

3.84% 

65.0% 

6.73% 

4.37% 

80.2% 

5.58% 

4.48% 

24.7% 

20.22% 

4.99% 

33.2% 

7.54% 

2.50% 

26/07/2006  

19/6/2006 

19/6/2006 

26/07/2006 

29/6/2006 

28/07/2006 

21/06/2006 

21/06/2006 

28/07/2006 

20/09/2006 

- 

- 

- 

- 

- 

- 

325.00 

334.51 

85.15 

87.30% 

64.44% 

93.61% 

2.86% 

2.50% 

4.50% 

2.90% 

2007 

2007 

2007 

2007 

- 

- 

rejected 
2007 

- 

- 

Aid granted (EUR) 

18°797°800  

9°722°183  

10°632°185 

52°406°870 

14°798°589 

application 
withdrawn 

(9°306°527) 

(15°063°587) 

* 
** 
*** 

Registration of initial application at Commission 
As accepted by Commission 
Amount could not be verified 

Application date* 
Complete 
information 
available on 
Major disaster 
threshold (m€) 
Total direct damage 
(m€)** 
Category 

Damage/threshold 
Cost of eligible 
emergency 
operations (m€)** 
Eligible cost/ total 
damage 
Aid/eligible cost 
Aid rate 
(% of total damage) 
Date of grant 
decision 
Date of 
Implementation 
agreement 

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Annex 2 
Criteria to mobilise the EU Solidarity Fund 

Extract from Council Regulation 2012/2002: 

“Article 2: 

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

2. A ‘major disaster’ within the meaning of this Regulation means any disaster resulting, in 
at least one of the States concerned, in damage estimated either at over EUR 3 billion in 2002 
prices, or more than 0,6 % of its GNI. 

By  way  of  exception,  a  neighbouring  Member  State  or  country  involved  in  accession 
negotiations  with  the  European  Union,  which  has  been  affected  by  the  same  disaster  can 
also benefit from assistance from the Fund. 

However, under exceptional circumstances, even when the quantitative criteria laid down in 
the first subparagraph are not met, a region could also benefit from assistance from the Fund, 
where  that  region  has  been  affected  by  an  extraordinary  disaster,  mainly  a  natural  one, 
affecting  the  major  part  of  its  population,  with  serious  and  lasting  repercussions  on  living 
conditions  and  the  economic  stability  of  the  region.  Total  annual  assistance  under  this 
subparagraph  shall  be  limited  to  no  more  than  7,5  %  of  the  annual  amount  available  to  the 
Fund. Particular focus will be on remote or isolated regions, such as the insular and outermost 
regions  as  defined  in  Article  299(2)  of  the  Treaty.  The  Commission  shall  examine  with  the 
utmost rigour any requests which are submitted to it under this subparagraph.” 

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Annex 3 
Determination of the amount of aid 

A  progressive  system  in  two  brackets  is  applied  whereby  a  country  affected  by  a  disaster 
receives  a  lower  rate  of  aid  of  2.5%  for  the  part  of  total  direct  damage  below  the  “major 
disaster” threshold and a higher share of aid of 6% for the part of the damage exceeding the 
threshold. The two amounts are added up. 

The threshold is the level of damage defined by the Regulation to trigger the intervention of 
the  Fund,  i.e.  0.6%  of  GNI  or  EUR 3  billion  in  2002  prices.  This  element  ensures  that  the 
relative capacity of a State to deal itself with a disaster is taken into account. It also ensures 
that for the same amount of damage relatively poorer countries receive more aid in absolute 
terms than richer ones. For extraordinary regional disasters the same method is being applied, 
meaning consequently that countries affected by those disasters, which by definition remain 
below the threshold, receive 2.5 % of total direct damage in aid. 

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Annex 4 
Thresholds for major disasters applicable in 2006 
(based on 2004 figures for Gross National Income) 

Country 

GNI 2004 

0.6% of GNI 

(Million EUR) 

Major disaster 
threshold 2006 

AT  ÖSTERREICH 
BE  BELGIQUE-BELGIË 
BG  BALGARIJA 
CY  KYPROS 
CZ  ČESKA REPUBLIKA 
DE  DEUTSCHLAND 
DK  DANMARK 
EESTI 
EE 
ELLADA 
EL 
ESPAÑA 
ES 
SUOMI/FINLAND 
FI 
FR 
FRANCE 
HR  HRVATSKA 
HU  MAGYARORSZÁG 
IE 
IT 
LT 
LU  LUXEMBOURG (G-D) 
LV  LATVIJA 
MT  MALTA 
NL  NEDERLAND 
POLSKA 
PL 
PORTUGAL 
PT 
RO  ROMÂNIA 
SE 
SI 
SK 
TR 
UK  UNITED KINGDOM 

IRELAND 
ITALIA 
LIETUVA 

SVERIGE 
SLOVENIJA 
SLOVENSKÁ REPUBLIKA 
TÜRKIYE 

234 184 
290 703 
18 927 
12 297 
82 560 
2 216 000 
195 471 
8 456 
167 356 
827 642 
149 197 
1 657 132 
27 623** 
76 582 
125 714 
1 343 620 
17 591 
22 643 
10 945 
4 203 
489 791 
186 029 
140 465 
58 947** 
281 444 
25 905 
32 790 
24 1373 
1 754 367 

1 405.103 
1 744.220 
113.563 
73.784 
495.358 
13 296.000 
1 172.825 
50.733 
1 004.137 
4 965.852 
895.182 
9 942.792 
165.739 
459.494 
754.285 
8 061.718 
105.543 
135.855 
65.667 
25.220 
2 938.746 
1 116.176 
842.788 
353.681 
1 688.665 
155.429 
196.738 
1 448.237 
10 526.204 

1 405.103 
1 744.220 
113.563 
73.784 
495.358 

3 202.578* 
1 172.825 
50.733 
1 004.137 

3 202.578* 
895.182 

3 202.578* 
165.739 
459.494 
754.285 

3 202.578* 
105.543 
135.855 
65.667 
25.220 
2 938.746 
1 116.176 
842.788 
353.681 
1 688.665 
155.429 
196.738 
1 448.237 

3 202.578* 

* ~ EUR 3 billion in 2002 prices 
** GDP (GNI not available) 

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