Special report No 3/2008 — The European Union Solidarity Fund: how rapid, efficient and flexible is it? Together with the Commission's replies
Date: 2008-03-13
Institutions: European Court of Auditors
Subjects: aid policy, aid system, emergency aid, fund (EU), natural disaster, report, support policy

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IV

(Notices)

NOTICES FROM EUROPEAN UNION INSTITUTIONS AND BODIES

COURT OF AUDITORS

SPECIAL REPORT No 3/2008

The European Union Solidarity Fund: how rapid, efficient and flexible is it?
Together with the Commission’s replies

(pursuant to Article 248(4), second subparagraph, EC)

(2008/C 153/01)

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TABLE OF CONTENTS

Paragraph

Page

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AUDIT SCOPE AND APPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rapidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How much time did it take from the disaster to the payment of aid?

. . . . . . . . . . .

I-VI

1-5

6-8

9-41

9-26

9-19

What factors account for variation in time taken for obtaining aid from the Fund?

20-22

Can the time actually taken be regarded as showing that the Fund provided a rapid
response to the applicants? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How are regional disasters treated by the Fund? . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Does the grant calculation principle compromise the fair treatment of grants allo-
cated to regional disasters? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are applicants satisfied with the Fund? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23-26

27-31

32-40

34-38

39-40

41

CONCLUSIONS AND RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42-47

Annex — EU Solidarity Fund Applications since 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Commission’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

3

4

4

4

4

7

7

9

9

9

11

11

12

13

15

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EXECUTIVE SUMMARY

I.
The European Union Solidarity Fund (EUSF) was set up in 2002 in response to the serious floods in Ger-
many, Austria, the Czech Republic and France. The Fund was intended to demonstrate solidarity with Member
States suffering as a result of natural disasters. Up to the end of 2006 it had provided aid of over EUR 1 billion
in respect of 23 disasters.

II.
The Council wanted the EUSF to be rapid, efficient and flexible in providing assistance. This report
examines whether the Fund had achieved these aims and whether the recipient states were satisfied with the
Fund.

III.
The Court reviewed all the applications sent to the Fund up to the end of 2006 and found that the
Fund did not provide a rapid response. This is confirmed by a survey carried out by the Court. The time taken
between the disaster and the payment was usually about one year.

The direct costs associated with managing the Fund by the Commission are low and so the Court con-
IV.
cludes that the Fund is working efficiently. As regards flexibility, the Court found no cases where the Fund
showed a lack of flexibility in its treatment of applications for aid.

However despite the protracted process involved in obtaining aid from the Fund, states that received
V.
money were satisfied with the Fund. The Fund has therefore, in respect of the states that received aid, met its
underlying objective of demonstrating solidarity with Member States in times of disaster.

The Court recommends that the Commission provide detailed guidance to applicants and advice on
VI.
how to achieve the prompt submission of information in order to ensure that delays in the processing of appli-
cations are avoided.

INTRODUCTION

In summer 2002 there were serious floods in Germany,
1.
Austria, the Czech Republic and France. The flooding was so
severe that the economies in the regions affected ground to a halt
for a while. The European Community reacted swiftly and created
the European Union Solidarity Fund, hereafter called the Fund, in
November 2002 (1).

2.
The Fund was created to enable the Community to pro-
vide rapid, efficient and flexible financial aid in emergency situa-
tions related to natural disasters. It is not designed to meet all the
costs linked to a disaster immediately but mainly to reimburse a
part of those connected with ensuring the restoration of vital ser-
vices and provision of temporary accommodation. The underly-
ing aim of the Fund is to demonstrate solidarity with those states
suffering as a result of natural disasters. With an annual budget
of EUR 1 billion, the Fund intervenes (2):

(a)

if a Member or Accession State is affected by a major disas-
ter, i.e. a natural disaster resulting in a damage estimated at
more than 0,6 % of gross national income or more than
EUR 3 billion if gross national income of the disaster affected
country is above EUR 500 billion (2002 prices);

(1) Council Regulation (EC) No 2012/2002 of 11 November 2002 estab-
lishing the European Union Solidarity Fund (OJ L 311, 14.11.2002,
p. 3).

(2) Article 2 of Regulation (EC) No 2012/2002.

(b) by way of exception, if a Member or Accession State suffers
from a neighbouring country disaster, i.e. a natural disaster
that also affected a neighbouring Member or Accession State
where it caused damage of a level of a major disaster as
defined above; and

(c) by way of exception, if a Member or Accession State suffers
a regional disaster, i.e. a disaster that affects a major part of
the population of a region and will have serious and lasting
repercussions on living conditions and economic stability in
that region.

The grant rate for all disasters is calculated in relation to
3.
the total direct damage suffered by the state. For major disasters
the aid comprises two rates: for damage which is less than the
EUR 3 billion the rate of aid is 2,5 % and for damage above this
amount the rate is 6 %. For regional and neighbouring disasters
there is a single rate of 2,5 % of the total direct damage.

The fund is operated by the Directorate-General

for
4.
Regional Policy (Regional Policy DG). From the start of the Fund
to the end of 2006 Regional Policy DG received 41 applications
for aid. Nearly half of the applications for aid were connected
with flooding disasters. See Table 1 for details of the different
types of disasters covered by all the applications.

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Table 1

Numbers of different types of disaster (in aid application)

Type of disaster

2002

2003

In year

2004

2005

2006

Flooding

Forest fires

Storm

Earthquake

Oilspill

Adverse weather

Volcanic eruption

Explosion

Total

4

0

0

0

0

0

0

0

4

3

3

0

1

1

1

1

0

3

7

0

1

0

0

0

0

7

0

5

0

0

0

0

0

10

11

12

2

1

0

0

0

0

0

1

4

Source: Regional Policy DG records of applications.

Total

19

11

5

2

1

1

1

1

41

5.
Overall, aid totalling EUR 1 084 million was granted dur-
ing this period for 23 approved applications as shown in Table 2
(for a detailed list of cases see Annex I).

(b) Was the aid granted efficiently?

Table 2

Numbers of applications and amount of aid in the years
2002-2006 by category of emergency

(d) Are applicants satisfied with the Fund?

(c) Was the Fund’s response to applicants flexible without com-

promising the principle of equitable treatment?

Category of emergency

Applications
received

Applications
approved

Applications
rejected

Major natural disaster

Neighbouring country

Regional disaster

Total

15

2

24

41

14

2

7

23

1

0

17 (1)

121,1

18

1 084

Amount of
aid granted
(million
EUR)

961,3

1,6

The audit was mainly carried out through interviews, file
8.
examination at the Commission and analysis of the data collected.
In addition, the Court carried out an electronic survey by address-
ing questionnaires to the 37 applicants out of 41 in 17 states that
had sought aid from the Fund (see Annex I). The Court received
answers from 33 applicants from 15 Member States (89 %
response rate).

Includes two cases which were withdrawn rather than rejected.

(1)
Source: Regional Policy DG records of applications.

OBSERVATIONS

AUDIT SCOPE AND APPROACH

Rapidity

6.
The objective of the audit was to assess the rapidity, effi-
ciency and flexibility of the implementation of the Fund by the
Commission since its inception. This was done by reviewing all
41 aid applications received between the commencement of the
Fund (2002) and the end of 2006 by the Regional Policy DG.

How much time did it take from the disaster to the payment
of aid?

The average time for the 23 successful applications to

9.
receive aid was 375 days.

7.

The Court sought to answer the following questions:

(a) Did the Fund provide a rapid response to the applicants, i.e.

states or regions affected by a disaster?

10.
The Court examined the time taken for obtaining aid
from the Fund by dividing the processing of applications into
phases. There are five main phases in the administrative process
from the date of disaster to the date of payment (see Figure 1).

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Phases in the processing of applications for aid from the Fund

Figure 1

11.
Table 3 below shows the average time taken for each
phase in the process. Whilst the average time for the first two
phases refers to all 41 applications, the average time for the last
three phases refers only to the 23 successful applications.

About two months on average to receive an application from a
state.

Table 3

Average number of days per phase in the processing of
applications for aid from the Fund

Phase

Average time in calendar days

Application

Assessment

Budget

Grant decision

Payment

66

148

65

94

24

12.
As shown in Table 3, the average duration of the appli-
cation phase is 66 days. The Regulation governing the aid from
the Fund requires that applications be sent to the Commission ‘as
soon as possible and no later than ten weeks after the first dam-
age caused by the disaster’ (1). However, in seven cases (almost in
17 % of cases) the application was submitted more than ten weeks
after the disaster, hence after the deadline. Apparently, the appli-
cants need at least two months to prepare the application. The
application takes such time because it is necessary to collect evi-
dence to support the application including information on the
proportion of the population affected by the disaster.

Source: Regional Policy DG records of applications.

(1) Article 4(1) of Regulation (EC) No 2012/2002.

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Almost five months on average for Commission to obtain missing
information and assess the eligibility of the application.

13.
As shown in Table 3, the assessment phase is the longest
of all the phases in the processing of applications for aid from the
Fund. It accounts for more than one third of the time from the
date of disaster to the date of payment. After receiving an appli-
cation the Commission checks the eligibility of the application,
which implies, in almost all cases, asking for additional informa-
tion from the applicant state concerned (see Textbox 1). This stage
ends with a decision in principle whether or not to provide
assistance.

Furthermore, Table 5 shows the average duration of the
15.
assessment phase considered by the applicants as reasonable and
the average duration of the assessment phase considered by the
applicants as too long. Interestingly enough, the unsuccessful
applicants appear to be more ‘patient’ than the successful appli-
cants. It is worth remarking that only one unsuccessful applicant
considered the time taken by the Commission as ‘too long’.

Table 5

Relationship between the success of the application, the duration
of the assessment phase and the applicants’ opinion

Textbox 1

Approved applications

Rejected applications

Providing the Commission with the necessary information

The time needed for the Commission to analyse an application and
request additional information varies significantly. In a flooding in
2005, a lot of information — and in particular electronic data — was
sent immediately after the disaster occurred and before the official
application was submitted. The result was that the Commission
requested further information 1,6 months before it received the appli-
cation and the assessment stage was shorter than the average. In a for-
est fire case in 2003, the authorities sent the Commission the
information it had requested the next day. This resulted in an overall
assessment time of 1,5 months only. At the other extreme, in a case
of 2003, the assessment took 12,5 months. The reason was that the
national authorities sent a huge but incomplete package of support-
ing documentation in their national language.

14.
The Court examined how the applicants view the dura-
tion of the assessment phase (see Table 4). According to the sur-
vey data, more than half of the successful applicants and also two
thirds of the unsuccessful applicants found the Commission’s
time spent for the assessment of their application to be reason-
able. The successful applicants are those whose applications were
approved, the unsuccessful are those whose applications were
rejected.

Table 4

Percentage of applicants considering the assessment phase as
reasonable, too long or having some other opinion

Average time for
those applicants
who considered
the time spent as
reasonable

Average time for
those applicants
who considered
the time spent as
too long

Average time for
those applicants
who considered
the time spent as
reasonable

Average time for
those applicants
who considered
the time spent as
too long

101 days

171 days

129 days

181 days

Source: Survey data obtained from the applicants by the Court.

More than two months on average to make the financial resources
available in the EU budget.

16.
Following the decision in principle by the Commission,
the budget phase commences. The budget line for EUSF is only a
token entry. The Commission prepares a ‘budgetary request’
which is presented to the budgetary authority (Council and Par-
liament). This budgetary amending procedure takes more than
two months on average but can increase to four months during
holiday periods (see Textbox 2).

Textbox 2

Passing the budgetary amending procedure

For two flooding applications in 2005, the decision in principle was
taken in December 2005 but the budget amendment was only
approved in April 2006, four months later. For a flooding case in
2004, the decision in principle was taken in June 2005 and the bud-
get amendment was only approved in September 2005, three months
later.

Applicants

Successful

Unsuccessful

Three months on average to get all documents signed.

Opinion on the duration
of the assessment phase

Reasonable

Too long

Other

NA

50 %

39 %

11 %

0 %

Total

100 %

Source: Survey data obtained from the applicants by the Court.

67 %

11 %

11 %

11 %

100 %

17.
Once the necessary financial resources have been made
available in the budget, the Commission adopts a grant decision
and concludes an agreement with the applicant. This agreement
sets out the type and location of operations to be financed by the
Fund. As shown in Table 3, on average, this phase takes three

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months. Abnormal delays were however observed in seven cases
which were due to the applicants taking too much time to sub-
mit the requested documents, which is sometimes as simple as the
bank account identification number for the payment. The method
by which documents are sent to the Commission can also cause
delay. For instance some applicants who returned the signed grant
agreement by diplomatic mail to their permanent representation,
who then forwarded it to the Commission found that this in fact
was slower than direct post mail.

The sum of the average time for the budget phase and the
18.
average time for the grant decision phase represents almost half
of the average time from the date of disaster to the date of obtain-
ing aid from the Fund. Hence, making the financial resources
available and getting all documents signed takes as much time as
assessing an application.

Almost one month on average to pay.

19.
As shown in Table 3, the average time for the payment
phase is 24 days. Once the agreement has been signed by both
parties, the payment itself usually takes less than one month, but
it can take longer. This is the case if the signed agreement is only
received by the Commission at the beginning of the budget year.
Then — due to accounting procedures at the end and beginning
of the year — the payment will not be made before the month of
March.

What factors account for variation in time taken for
obtaining aid from the Fund?

20.
So far, this report has presented the average time taken
for each of the five phases in the process of obtaining aid from
the Fund. There was a wide variation around the average time.
The Court sought to identify factors which might account for the
variation. So the Court examined the extent to which variation is
explained by the category of the disaster, the type of the disaster
and the country where the disaster took place. Three categories of
disaster were distinguished: major, neighbouring and regional
disasters. With respect to their type, the disasters were classified
as flooding,
fire, storm, earthquake, oilspill, adverse
weather, volcanic eruption and explosion. No significant relation-
ship between the category of disaster and time taken for obtain-
ing aid from the Fund was found. The same holds for the type of
disaster and the country where the disaster took place.

forest

An example of the analysis of variation in time taken for
21.
obtaining aid from the Fund is presented in Table 6. There the
relationship between the type of disaster and the duration of the
application phase is shown. As can be seen, the type of disaster
does not account for a significant part of the variation in time the
applicant needs to present the case to the Commission.

Table 6

Duration of the application phase in relation to the type
of the disaster

Type of disaster

Number
of appli-
cations

Average
number
of days

Mini-
mum
number
of days

Flooding

Forest fires

Storm

Earthquake

Oilspill

Adverse weather

Volcanic erup-
tion

Explosion

19

11

5

2

1

1

1

1

All disasters

41

67

58

64

72

55

79

79

68

66

12

24

61

70

55

79

79

68

12

Source: Regional Policy DG records of applications.

Maxi-
mum
number
of days

106

70

67

74

55

79

79

68

Standard
deviation

17

17

2

2

0

0

0

0

106

15

The Court’s analysis suggests that the time necessary to

22.
mobilise funds depends mainly on:

(a)

the administrative rules to be applied;

(b)

the rapidity of the Commission,
translation;

including the need for

(c)

the promptness of the national authorities’ replies; and

(d)

the quality of the information provided by the applicant.

Can the time actually taken be regarded as showing that the
Fund provided a rapid response to the applicants?

23.
An attempt was undertaken to benchmark the rapidity of
the Fund against similar funds or activities. Various other funds
and activities were reviewed. The closest equivalent was found to
be the Commission’s Directorate-General for Humanitarian Aid

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(ECHO) Emergency Aid Fund. However, despite there being simi-
larities between the two funds, they are not sufficiently similar to
provide a benchmark for the rapidity of the Solidarity Fund. The
Emergency Aid Fund has a specific regulatory and procedural
framework which is designed to ensure that it can provide imme-
diate relief (e.g. an assessment phase of less than one week and a
fixed budget line). The Fund does not have an equivalent regula-
tory framework.

The four benchmark cases could help to identify how to

25.
speed up the process in new cases. In these four cases:

(a)

the assessment lasted on average only nine days because sig-
nificant documentation was provided to the Commission in
the preliminary stages (before the formal application);

24.
However, when analysing the data, the Court noted that
the first four applications were paid within a time span of between
100 and 150 days from the date of the disaster, on average in
131 days. The Commission started to deal with the first four
applications before the Fund was fully set up. The processing time
for those four applications provides a standard of comparison
against which the processing time for subsequent applications
can be judged. If for an application received in 2003 or later when
the Fund was fully set up the processing time, i.e. the time from
the date of disaster to the date of obtaining aid from the Fund,
exceeds 150 days, it can be considered as long. The average pro-
cessing time for the 19 successful applications after the first four
applications was 415 days, hence above the benchmark just
defined. Therefore, the Court does not consider the Fund to be
rapid in providing aid in the years after 2002. The Fund was
much more rapid in dealing with the first four applications than
it was in dealing with the subsequent ones.

(b)

the budget phase lasted on average only eight days since the
Commission sent the proposal to the Parliament on the same
day that the decision in principle was taken; and

(c)

in the grant decision phase, a significant amount of time was
saved by the signature of the agreement by both parties on
the same day.

26.
The Court examined whether the applicants considered
that the duration of the process had had an impact on the imple-
mentation of remedial mesures. The survey revealed that most of
the applicants considered that the duration of process had not
had any effect on the implementation of remedial measures. This
opinion is probably due to the fact that the Fund is mainly used
for the reimbursement of a small part of the costs caused by the
disaster (see Graph 1).

Survey based opinion of beneficiary states on the effect of the Fund on the implementation of remedial measures

Graph 1

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Efficiency

Table 7

The Fund is required to be efficient. The regulation stipu-
27.
lates that ‘administrative procedures should be adjusted accord-
ingly and confined to an absolute minimum’ without defining the
concept further (1).

The Court reviewed the procedures that the beneficiary
28.
states are required to comply with in respect of tendering, con-
tracting, implementing, reporting and auditing the grant. The
Court concluded that the requirements for beneficiary states of
EUSF are less cumbersome than those receiving other EU funds.
It can therefore be considered that the administrative procedures
have been reduced to a level which ensures that the procedures
are efficient for beneficiary states.

29.
The Court reviewed the administrative procedures at the
Commission to assess whether they were confined to a minimum.
The Court concluded that within the current framework of the
Fund (i.e. a solidarity and not an emergency fund) all the five
phases of administrative procedures were necessary and none of
them was redundant.

30.
Despite the fact that the Commission does not have an
accounting system providing data to calculate the costs of the
Fund, the average direct cost of managing the Fund can be esti-
mated to be around 0,06 % (or less than 0,1 %) of the amount
granted as shown in Table 7. Since the establishment of the Fund
in 2002, two people have been permanently allocated to the task
of managing the Fund services. They deal with the process from
the initiation of applications up to the closure of the aid.

Administrative costs and workload of the Fund per year

Year
2002

Year
2003

Year
2004

Year
2005

Year
2006

Annual administra-
tive costs of DG
REGIO
(million EUR)

Number of applica-
tions

Aid granted
(million EUR)

0,15

0,16

0,17

0,18

0,19

4

10

11

12

4

728

107

20

205

24

Source: Court’s estimation of the costs and Regional Policy DG.

Flexibility

In the context of this analysis flexibility is defined as the
32.
ease with which a system can be adjusted for use in applications
or environments other than those for which it were specifically
designed. The Fund was designed for the major disasters. There-
fore it can exhibit flexibility in responding to the applications
associated with regional disasters.

The Fund should enable the Community to respond flex-
33.
ibly to emergency situations, but exceptional cases must be
treated with the utmost rigour (2). The flexibility of the Fund must
not compromise the principle of equitable treatment.

How are regional disasters treated by the Fund?

31.
In an effort to calculate the total cost of managing the
Fund by the Commission additional information was requested
from both Human Resources and Audit Directorates on other
personnel assigned to this task, mission frequency and cost by
operational and audit units as well as other administrative, moni-
toring and control on-the-spot costs. Limited information was
available. So in order to create a ‘benchmark’ for evaluation pur-
poses, the Court calculated an estimate for all above costs on a
yearly basis. This sums up to an average annual amount of
EUR 170 000. In Table 7 it can be seen that the administrative
costs are minimal when compared to the amount managed. As an
indication, in 2002, a year with only four cases to manage, the
administrative costs represented 0,02 % of the aid granted. The
Court’s findings indicate that the Commission manage the Fund
in an efficient way.

34.
The Court reviewed the treatment of regional and major
disasters. The analysis focused on ‘flexibility’ from the perspec-
tive of the equitable treatment of applications. This means the fair
assessment of the requests submitted by the applicants and the
use of coherent and consistent criteria by the Commission for the
approval or rejection of applications.

Of the 18 applications that were rejected (3), 15 (83 %)
35.
concerned regional disasters. The reason for this very high level
of rejection is that the definition of regional disaster is rather

(1) Recital (8) of Regulation (EC) No 2012/2002.

(2) Article 2(2) of Regulation (EC) No 2012/2002.
(3) Including two withdrawn applications.

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vague and their eligibility for the Fund is more complex to assess.
Each rejection by the Commission is justified by a set of reasons.
The main reasons that the Commission gave for rejection were:

Textbox 3

Some eligibility criteria applied for regional disasters

(a) applications were submitted late and/or were incomplete;

(b) damage reported in the application did not affect a major
part of the population and was not classified as regional
disaster;

(c)

incorrect information about the date of the disaster given by
Member States.

36.
Whilst the Court does not claim that cases which have
been rejected should have been accepted, it notes that there are
two cases where there is a lack of clarity in the criteria applied or
in the justification presented to the Member State (see Textbox 3).
In one case the eligibility conditions as regards the level of popu-
lation affected has not been applied as in equivalent cases.

For one forest fire rejected in 2005 — the Commission alleged, as one
argument, that it did not affect a major part of the population (see
conditions in paragraph 2). However, it did not use the same argu-
ment to reject another similar case in 2003. On the contrary, the
Commission itself explained in its annual EUSF report 2002-2003
why that condition was not applicable for this particular case even
though the condition makes little sense for either of the rejected for-
est fire applications.

One of the Commission’s reasons for rejecting a flooding case in
2004 was that the Community Mechanism for Civil Protection had
not been activated, which implied that the flooding was of a limited
nature. Activating this mechanism is, however, not a compulsory
requirement under the Regulation. This case was compared to another
rejected flooding case in 2005, where the Commission also referred
to the mechanism for Civil Protection, but then in this case stated that
this element was not relevant.

Graph 2

Applicants’ opinion of Commission’s reason for rejection

37.
The Court examined whether the applicants for all cat-
egories of disaster whose applications were rejected agreed with
the Commission’s reasons for rejection. This could be considered
as measure of the extent to which the eligibility rules are coher-
ent and clearly understood. The survey data indicates that 45 %
of the applicants agreed with the Commission’s arguments for
rejecting their application as shown in Graph 2. The rejected

applicants did not agree with the Commission’s arguments for the
following reasons:
(a)

the impossibility for the regions concerned to provide the
data requested by the Commission to the level of accuracy
requested and in a very short time period prescribed — in an
emergency context in which priority is given to immediate
needs;

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(b)

it is sometimes difficult to quantify exclusively in economic
terms the impact of damage to populations; for instance in
small rural communes there is damage not just to property
but to a way of life and general living conditions. At the same
time it was claimed that all these small incidents can, if added
together, create a big problem;

(c)

in some cases the authorities believe that, in the past, the
Commission accepted the application and financed the
action in similar cases.

38.
The views noted indicate that applicants have problems
with the time allocated to them to prepare an application, the
assessment of the damage in terms of components of damage
which are difficult to quantify as well as with the criteria used by
the Commission to assess the application. This last critical ele-
ment could imply that the applicants have concerns about the
fairness of treatment in some cases.

Does the grant calculation principle compromise the fair
treatment of grants allocated to regional disasters?

39.
According to the method used by the Commission (1), all
regional disasters receive the same percentage of total direct dam-
age, namely a flat rate of 2,5 % of the total direct damage, with-
out taking into account the ‘prosperity’ of the applicant state or
region. In contrast, in major disasters the grant calculation is
based on the Gross National Income of the applicant giving a
more equitable treatment between countries in relation to their
prosperity.

The mobilisation of the Fund under the ‘exceptional cri-
40.
terion’ (regional) is the rule and not the exception (58 % of disas-
ters were regional disasters). Moreover, the conditions for a
successful application under the extraordinary regional disaster
criterion which are required to be examined with the utmost
rigour are extremely difficult to meet. So 83 % of applications for
regional disasters were rejected after a longer assessment period.
The rejections were not due to the non-availability of funds since
from its creation in October 2002 up to the end of 2006 the
Fund has granted aid for not much more than its budget for one
year.

Are applicants satisfied with the Fund?

41.
All applicants that have replied to the survey were satis-
fied with the Fund. The Fund is perceived as a sign of solidarity,
with a positive impact on public opinion, especially in the new
Member States. Based on the survey replies (see Graph 3), the
main reasons given for this satisfaction are:

(a)

(b)

(c)

the Fund’s contribution was a signal of the EU solidarity with
the population of the regions affected, in view of the scale of
the disasters;

the grant helped to alleviate the enormous expenses linked to
the disasters (extending secondary emergency operations,
speeding up the process and so on);

the aid represented a reduction of the burden on public bud-
gets, albeit sometimes limited compared to the degree of the
disaster;

(d)

the contribution had a positive impact on public opinion
with regard to the accession to the EU for candidate countries.

Graph 3

Global satisfaction from EUSF

(1) The Commission’s annual European Union Solidarity Fund Report

2002-2003, p. 24.

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CONCLUSION AND RECOMMENDATIONS

42.
The Court’s examination of the operation of the Fund in
2002-2006 shows that the Fund does not provide a rapid
response. On average, the applicants had to wait for 12 months
after the disaster to receive payment of the assistance. The delays
are not related to the category or the nature of the disaster, or to
the origin of the application. The time necessary to mobilise funds
depends mainly on the extent of the administrative rules applied,
on the rapidity of the Commission, on the promptness of the
national authorities’ replies and on the quality of the information
provided in each case by the applicants (see paragraphs 10 to 26).

43.
The existing number of staff managing the Fund at the
level of the Commission has proved to be efficient. In addition,
the total costs of managing the Fund were found to be very low
in relation to the aid granted (see paragraphs 27 to 31).

not take into account the prosperity of the state, so it may not
respect the principle of fairness (see paragraphs 32 to 40).

45.
Finally it should be noted that, despite the issues raised
above, all applicants that have replied to the survey are satisfied
with the Fund. In this way the Fund has achieved its underlying
objective which is to demonstrate solidarity with Member States
in disaster situations (see paragraph 41).

46.
In order to speed up the payment of the assistance, the
Commission should have procedures in place, before the end of
2008, to ensure that an applicant state receives detailed guidance
on the requirements of the application as soon as possible, pref-
erably within one week of a state or region advising the Commis-
sion that they will be seeking aid from the Fund.

There are no cases where the Fund showed a lack of flex-
44.
ibility in its treatment of applications for aid. Without question-
ing the rejection of applications there are a few cases which
illustrate a lack of clarity in the justification of the rejection of
applications for regional disasters. The method used for the cal-
culation of the grant amount for approved regional disasters does

In addition the Commission should establish direct con-
47.
tact with the body in the Member or Accession State responsible
for preparing the application to warn them of the common weak-
nesses in applications received and stress the importance of send-
ing back the application and any other document requested by
the Commission, including the final agreement, rapidly.

This report was adopted by the Court of Auditors in Luxembourg at
13 March 2008.

its meeting of

For the Court of Auditors
Vítor Manuel DA SILVA CALDEIRA
President

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EU SOLIDARITY FUND APPLICATIONS SINCE 2002 (LAST UPDATE 31 DECEMBER 2007/REGIONAL
POLICY DG)

ANNEX

Year

Country

Nature of the disaster

Damage
(million
EUR)

Category

Aid granted
(million
EUR)

Receipt of EUSF
aid at national
level (1)

1

2

3

4

1

2

3

4

5

6

7

8

1

2

2
0
0
2

3
0
0
2

4
0
0
2

AT

flooding

2 900,0

major

134,0

27.12.2002

CZ

flooding

2 300,0

major

129,0

13.1.2003

FR

flooding (Le Gard)

835,0

regional

21,0

27.12.2002

DE

flooding

9 100,0

major

444,0

29.12.2002

Total aid 2002

728,0

ES

oilspill (Prestige)

436,0

regional

IT

earthquake (Molise/Apulia)

1 558,0

regional

IT

volcanic eruption (Etna)

849,0

regional

8,6

30,8

16,8

IT

flooding (northern Italy)

1 900,0

regional

rejected

EL

adverse winter weather

n/a

major

rejected

29.3.2004

11.3.2004

11.3.2004

n/a

n/a

PT

forest fires

1 227,9

major

48,5

2.12.2003

FR

forest fires (southern France)

531,1

regional

rejected

n/a

ES

forest fires (Portuguese bor-
der)

53,2

neighbouring
country

9

MT

flooding

30,2

major

1,3

1,0

6.9.2004
(payment date)

12.11.2004
(payment date)

10

IT

flooding (Friuli Venezia-
Giulia)

525,1

regional

rejected

n/a

FR

flooding (Rhone delta)

785,0

regional

19,6

7.7.2004

Total aid 2003

107,0

ES

flooding (Malaga)

72,9

regional

rejected

3-9

ES

forest fires (7 applications)

479,8

regional

all 7 rejected

10

SK

flooding

29,1

regional

rejected

11

SI

earthquake

12,5

regional

withdrawn

Total aid 2004

19,6

n/a

n/a

n/a

n/a

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1

2

3

4

5

6

7

8

9

5
0
0
2

6
0
0
2

SK

storm (Tatras)

202,7

major

5,7

7.11.2005

IT

flooding (Sardinia)

223,0

regional

rejected

n/a

EE

storm

LV

storm

SE

storm

LT

storm

47,9

major

192,6

major

1,3

9,5

not available

not available

2 297,3

major

81,7

18.4.2006

15,2

neighbouring
country

0,4

12.4.2006

EL

Evros flooding

135,0

regional

rejected

n/a

RO spring flooding

489,5

major

BG spring flooding

222,3

major

10

BG summer flooding

237,4

major

11

RO summer flooding

1 049,7

major

12

AT

flooding (Tyrol/Vorarlberg)

591,9

regional

18,8

9,7

10,6

52,4

14,8

17.8.2006

7.7.2006

7.7.2006

17.8.2006

24.10.2006

Total aid 2005

204,9

1

2

3

4

UK

explosion

730,0

(regional)

withdrawn

n/a

EL

flooding

372,3

regional

9,3

17.12.2007

HU flooding

519,1

major

15,1

19.10.2007

ES

forest fires

91,0

regional

rejected

n/a

Total aid 2006

24,4

Grand total of aid granted since 2002

EUR 1 083,9 million (2)

(1) The EUSF grant has to be used within one year of the date of receipt of the grant in the beneficiary country. No later than six months after

the expiry of the one-year period the beneficiary country has to present an implementation report with a statement of validity.
Including amounts waiting to be paid out in 2006 for applications from 2005.

(2)

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THE COMMISSION’S REPLIES

EXECUTIVE SUMMARY

III.
The rapidity with which funds are made available to beneficiaries is a direct reflection of the procedure
provided in the EUSF Regulation, which have meant that, in practice, it is not a rapid response instrument but
a refinancing instrument for expenditures already incurred by the national authorities.

IV.
The Commission agrees that the conditions for a successful application for ‘regional disasters’ (as
opposed to ‘major disasters’) are more difficult to meet. This is intended by the legislator, who requires the
Commission in Article 2 of the Regulation to examine ‘with the utmost rigour’ any regional disaster application.

V.
The Solidarity Fund has helped to alleviate the financial burden on states affected by disasters and it has
been beneficial to the image of the Union in the eyes of its citizens, offering help and additional resources at
times of particular hardship.

VI.
The Commission agrees to the recommendations of the Court. Shortly after the adoption of the Regu-
lation a standard application form was developed as well as a detailed guidance note for applications (both
available on the InfoRegio website). The Commission intends to seek direct contact with the body preparing
the request, provided that the applicant state agrees, and to extend its application guidelines in order to warn
applicant bodies of possible sources of delays.

OBSERVATIONS

Some of the five stages identified by the Court may
10-13.
overlap. For example, the first presentation of the application is
often lacking essential information and the Commission cannot
complete its assessment until it receives the missing information.

For the applications received in 2005 (the year with the highest
number of applications during the period assessed by the Court)
the average time before the Commission had received the miss-
ing information was 93 days.

In those cases, in which the application was submitted after the
10-week deadline foreseen by the Regulation, the Commission
rejected the applications.

The Commission requests additional appropriations via
16.
a Preliminary Draft Amending Budget (PDAB) decided on by the
two arms of the budgetary authority (Council and Parliament) (1).

The first four submissions under the EUSF in 2002
24-25.
should be looked at separately and cannot be used as a bench-
mark as they were dealt with under very unusual circumstances.
Complete applications in working languages of the Commission
were received very early and dealt with while the Regulation was
still being developed and the internal procedures yet had to be

(1) Point 26 of the Interinstitutional Agreement between the Parliament,
the Council and the Commission on budgetary discipline and sound
financial management.

established. As the eligibility rules in the Regulation were estab-
lished in the context of these first disasters, the required assess-
ment time was extremely short. The very high total aid amount
of EUR 728 million, never been exceeded since then, allowed for
a separate amending budget in the budget procedure. The fact
that the implementation agreements were signed on the occasion
of a European Council meeting (Copenhagen) also illustrates
strong political will and the exceptional character of these first
cases.

The current EUSF Regulation does not provide for a rapid
response instrument but only for a refinancing instrument for
emergency expenditures already incurred by the national
authorities.

The Commission considers that the criteria in the Regu-
36.
lation have been applied in the clearest possible way (see detailed
comments in textbox 3). However, the definition of regional
disaster in the Regulation is rather vague and conditions for suc-
cessful applications are difficult to meet. Member States and the
Commission invest considerable time and effort in, respectively,
preparing and assessing applications for smaller regional disas-
ters that regularly lead to rejections.

In all cases cited where the Commission proposed the mobilisa-
tion of the EUSF, this was endorsed by the Council and Parliament.

Textbox 3. One reason for rejecting the ‘forest fire’ applications in
2005 was that the disasters did not affect a major part of the
population. Another reason was that there had been no ‘serious
and lasting repercussions on living conditions and the economic
stability of the region’.

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The case of the Prestige oilspill to which the Court alludes is not
comparable to any other application ever treated by the Commis-
sion because the Prestige disaster happened at sea where the
population criterion cannot reasonably be applied.

As the Court indicates, activating the mechanism for civil protec-
tion is not a requirement under the Regulation. Thus, the ques-
tion whether or not the civil protection mechanism was mobilised
could not even have been relevant for the decision in both cases.

39.
The method for calculating the grant was discussed in
detail with the Council and has in no case given rise to criticisms
from beneficiary countries.

CONCLUSION AND RECOMMENDATIONS

42.
The issues raised with regard to rapidity are inherent to
the conditions and procedures imposed by the Solidarity Fund
Regulation. As the experience gathered so far shows that there is
room — and in the Commission’s view the need — for improve-
ment, the Commission in 2005 presented a proposal for a revised
regulation with simpler and clearer criteria for its activation in less
time. The proposal was very favourably received by the European
Parliament but so far there has been no progress in the Council.

44.
The Commission considers that the criteria in the Regu-
lation have been applied in the clearest possible way (see detailed
comments in textbox 3). However, the definition of regional
disaster in the Regulation is rather vague and conditions for suc-
cessful applications are difficult to meet. Member States and the
Commission invest considerable time and effort in, respectively,
preparing and assessing applications for smaller regional disas-
ters that regularly lead to rejections. One of the major changes in

the proposed, new regulation is therefore to resort only to quan-
titative thresholds for the level of damage required to trigger utili-
sation of the Fund, which would improve the transparency of the
Fund. With the proposed revision of the Solidarity Fund Regula-
tion, the national authorities would have a clearer idea of when
the Fund is likely to be able to support them in recovering from a
disaster.

As regards fairness, the prosperity of a country is taken into
account mainly in the definition of the ‘major disaster’ threshold.
The method for calculating the grant was discussed in detail with
the Council and has in no case given rise to criticisms from ben-
eficiary countries.

46.
The Commission agrees with the recommendation of the
Court. It notes however that, shortly after the adoption of the
Regulation, it published guidelines for applicant countries and
explained in detail in what way it applies the provisions of the
Regulation. In order to simplify the procedure and to help avoid
delays in the submission of information, the Commission devel-
oped a standard application form as well as a detailed guidance
note for applications. It is also available on the InfoRegio web-
site. In many cases however, applications were submitted ‘ad hoc’,
without the applicant states seeking any prior contact with the
Commission.

47.
The Commission agrees to the recommendation of the
Court to establish direct contact with the body responsible for
preparing the application. In the standard application form the
Commission proposes that the applicant state indicates the body
introducing the request and an administrative contact. In some
cases up to now applicant states preferred that the Commission
communicates via the Permanent Representation. The Commis-
sion intends to extend its application guidelines in order to warn
applicant bodies of possible sources of delays in the procedure
and in order to stress the importance of sending back the appli-
cation and any other document requested by the Commission
rapidly.