Opinion of the European Economic and Social Committee on Strategy for the outermost regions: Achievements and future prospects COM(2007) 507 final
Date: 2008-04-22
Institutions: European Economic and Social Committee
Subjects: EU policy, EU programme, economic and social cohesion, peripheral region, regional integration, third country

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which, while obviously guided by the principles of
the
internal market, always respect the needs of citizens/consu-
mers, companies and tax authorities.

criteria ensuring transparency, bearing in mind that, in any case,
it would move us further away from the objectives of the
single market.

4.15 With regard to alternatives to reduced rates,
the
Commission asks whether these might be replaced by direct
subsidies: this is a more effective, more transparent and less
expensive policy instrument. The Committee believes
that
national-style alternatives are viable in some specific cases on a
temporary basis, provided that any measures resembling state
aid are avoided. However, any kind of national solution as an
alternative to VAT derogations should be decided on the basis of

4.16
Finally, as a back-up to its numerous opinions on the
subject, the Committee would reiterate a suggestion inspired by
transparency and common sense: the VAT regime should
cease to be called ‘temporary’. This adjective — which is still
used thirty years on and has no medium-term prospects of
becoming definitive — is deceptive and damages the credibility
of EU rules. It also proves, if ever proof were needed, the old
adage that ‘nothing is more definitive than the temporary’.

Brussels, 22 April 2008.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

Opinion of the European Economic and Social Committee on ‘Strategy for the outermost regions:
Achievements and future prospects’

COM(2007) 507 final

(2008/C 211/19)

On 21 September 2007 the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the

Strategy for the Outermost Regions: Achievements and Future Prospects.

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 28 March 2008. The rapporteur
was Mr Coupeau.

At its 444th plenary session, held on 22 and 23 April 2008 (meeting of 22 April), the European Economic
and Social Committee adopted the following opinion by 128 votes to three, with five abstentions.

1. Introduction

1.1
Article 299(2) of the EC Treaty recognises the particu-
larity of outermost regions (hereafter ORs), enabling them to
preserve their
special characteristics and to mitigate their
constraints.

Through its Communication of 12 September 2007
1.4
entitled Strategy for the Outermost Regions: Achievements and Future
Prospects, the Commission has launched a public consultation
process to gather the views of all stakeholders on its OR policy
in view of the major challenges to be faced by these regions in
the coming years. This opinion is the EESC's contribution to
that process.

The seven regions classified as outermost regions are the
1.2
autonomous Spanish community of
the
Portuguese autonomous regions of Madeira and the Azores and
the four French departments of Guadeloupe, French Guiana,
Martinique and Réunion.

the Canary Islands,

1.5
The EESC maintains that while the EU's OR financial
policies have had certain beneficial effects, structural difficulties
remain, which must be resolved: these policies must therefore
be stepped up in future.

Since 1989, these regions have benefited from a specific
1.3
programme to support socio-economic development measures
aimed at achieving greater convergence with the rest of the
European Union.

The Committee notes that access to Europe and its
1.6
market is a constant issue for ORs, as a result of their remote-
ness and insularity (except for French Guiana) and their particu-
lar geographical and structural nature.

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The EESC points out that the location of the ORs, near
1.7
such spheres of
influence as Mercosur, West Africa, South
Africa and the Caribbean, gives Europe a global dimension.
Also, being located in several different oceans, the ORs give
Europe an exclusive economic area amounting to 25 million km2
containing wealth and resources the extent of which has not yet
been estimated.

The Committee would also highlight that by their very

1.8
nature outermost regions suffer a competitive disadvantage:

— economies of scale are precluded by the smallness of the

markets;

— paucity of natural resources, such as oil, gas and minerals;

— economic development heavily dependant on only a few

products: tourism, agriculture and fisheries;

— given the small size of the markets, there is a tendency for
businesses to concentrate and create monopolies or cartels,
which undermines competitiveness.

The EESC feels that the Commission's OR inter-service
to

1.9
group must be maintained, perhaps even strengthened,
increase the effectiveness of EU policy.

2. OR sectors of industry: analysis and recommendations

2.1 Tourism

2.1.1
The tourism sector is a major segment in the OR
economies and in some cases the sole source of economic
growth.

2.2
The Canary Islands have developed a diversified tourist
industry attracting more than ten million tourists per year.
Madeira has also developed its tourist industry by significantly
increasing its capacity. There is also a significant tourist industry
in the Antilles and Réunion, though it remains vulnerable. Prof-
iting from their outstanding natural environment and propitious
climate, the ORs have developed high-end tourism. But this has
increased their economic dependence and is a risky strategy, as
the vagaries of the climate, euro exchange rates, health concerns,
etc., make tourism demand extremely fickle.

2.3
The Committee believes there is an urgent need to
develop and publicise an OR logo, and to promote these
regions in all European countries and even in other countries
neighbouring the ORs,
in order to diversify and enhance the
quality and sustainability of their tourism.

its contribution to added value is declining. Agriculture repre-
sents a key source of employment, and must at all costs be
preserved, and if possible developed:

— The most agricultural of

the outermost regions are the
Azores, where the sector accounts for 24 % of workers (not
only livestock farming, but beet, tobacco and so on). Fish-
eries is a strategic sector in terms of exports — especially of
tuna — but has been shrinking of late.

— The ORs also produce:

— bananas

(Canary Islands, Madeira, Martinique

and

Guadeloupe);

— sugar cane (Réunion, Guadeloupe and Martinique);

— tropical fruit (Réunion and French Guiana);

— tropical flowers (the Antilles);

— beverages

(Madeira, Canary Islands, Martinique and

Guadeloupe).

2.5.2
third countries, which explains some of the fall in added value.

It should be noted that there is stiff competition from

There are two types of agriculture:

2.5.3
the home
market and for export. These two types have often been in
conflict, but they may also complement each other. The EESC
stresses the vital need for local distributors to promote agri-
culture for the home market.

for

2.5.4 With regard to agriculture for export, the EESC calls
for a promotional campaign for OR produce and for these
products to be specially labelled, highlighting their compliance
with the EU's exacting social, environmental and health stan-
dards.

The EESC stresses the urgent need for the EU to bolster
2.5.5
its third-country product surveillance policy to prevent
the
introduction of animal and plant diseases, with a view to safe-
guarding farms.

2.5.6
The Committee could envisage a certain degree of
compatibility between third-country and OR produce, provided
that this:

— does not threaten local farms;

— raises people's standard of living in third countries; and that

2.4
Stakeholders in tourism must make more use of sustain-
able practices, in view of the need to preserve natural resources,
and must consult with all
local players to establish suitable
development criteria. While there is clearly awareness of sustain-
ability within the ORs, this must be accompanied by a policy
worked out by local stakeholders and backed by EU funding.

— there is a forum for consultation to foster a sustainable

development framework.

2.5.7
The EESC highlights the natural handicaps of ORs,
discussed above, and considers that measures compensating for
them should be retained.

2.5 Agriculture

2.5.1
The EESC notes that while agriculture is a traditional
sector and remains an important pillar of the ORs' economies,

2.5.8
The Committee is concerned about land management
in certain ORs, as agricultural areas must be preserved. The EU
must urge the local authorities to classify the areas to be
preserved and the areas to be urbanised, within a sustainable
development framework.

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2.5.9
is an
The ORs are rich in biodiversity and this
undoubted economic asset. Policy in this area should be ambi-
tious and adequately funded, so as to sustain a rich agricultural
fabric using methods that respect the ecosystem.

2.6 Fisheries

This is an important sector for outermost regions, but
2.6.1
management of
fish stocks will prove problematic. Thought
should be given to finding new fish supply sources, perhaps
marine aquaculture.

2.6.2
Research and targeted policies should ensure ways of
maintaining fish supplies. The schemes undertaken so far have
been broadly successful in sustaining the sector.

nient timetables and high costs due to distance and twofold
insularity;

— higher warehousing costs due to lack of sea and air connec-

tions;

— higher recruitment costs, since in-house training is required

to make less skilled workers more productive;

— higher outlay on transport, staff training and greater ware-
housing capacity than businesses in continental Europe: this
increases overheads and so reduces competitiveness;

— higher installation costs due to import of materials.

2.8.4
The EESC thinks that EU policies should take account
of these extra costs and take measures to try to mitigate them
as far as possible.

The aquaculture sector is still

2.6.3
in its infancy, but is
firmly established in the Canary Islands and Réunion. The EESC
points to French Guiana's success in the area of shrimp farming.

2.9 Energy

2.6.4
The location of the ORs gives the European Union a
large maritime area (Indian and Atlantic Oceans, the Caribbean,
etc.) and a remarkable biodiversity of fish resources. The EESC
maintains that sea basins must be managed individually, as the
situation in the Indian Ocean differs from that in the Atlantic;
this should also take account of actual fish stocks.

2.7 Distributive trades

2.9.1
Scarcity or unavailability of traditional energy sources
and dependence on external energy is a structural weakness of
the OR economies. Nevertheless, ORs have a wide range of
possibilities for developing renewable energy:

2.9.2
The EESC points out
problem in these regions, but
exist, such as solar, geothermal, sea and wind energy.

that energy is a recurring
that numerous opportunities

2.7.1
These form an important sector in the ORs, though
reliant on imports from the Member States; consumption is
sustained by the local population, but also fluctuates in accord-
ance with tourist numbers.

2.9.3
Furthermore, these regions do have something of a
problem with managing waste, which could be a source of
energy. A policy of energy diversification could simultaneously
solve the problem of public hygiene:

The EESC believes that there is a need for a retail
2.7.2
segment
focusing on local products to offer a variety of
products and a service tailored to the population and to tour-
ists.

2.8 Companies and competition

Given the modest size of the local market in outermost
2.8.1
regions, a small company can quickly find itself in a monopoly
position. Thus, what is considered a large company in ORs
would correspond to a modest-sized company in continental
Europe; as a result, there is no economy of scale in these
regions.

— most of the regions have a tropical climate and can capture

the energy this offers;

— some regions are on volcanic terrain where geothermal

energy can be exploited;

— profiting from the proximity of seas, sea-based energy could

be developed;

— waste is a possible energy source.

2.9.4
The Committee feels that diversifying energy sources
must be considered a long-term goal, for which there must be a
financial incentive.

2.8.2
transparency and to foster competition between companies.

The Committee highlights the need to increase market

2.10 Research and development

2.8.3
down. They include:

The extra costs faced by ORs are often difficult to pin

2.10.1
New communication technologies must be developed
to put an end to isolation and open up opportunities for
economic development in the ORs.

— transporting goods and materials by sea and air;

— frequently complicated business travel between the continent
and the ORs caused by a lack of direct connections, inconve-

2.10.2
It is important to develop research for both traditional
and non-traditional sectors and to find answers to the issues
facing ORs.

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2.10.3
The EESC thinks that making these regions more
welcoming for research centres would have a very positive
effect. This would also provide a useful source of diversification
for the economy of the ORs.

— through better connections at more attractive prices and by
opening up the transport market, improving transit facilities
(ports and airports), rationalising transport
logistics and
compensating for remoteness; and

2.11 The

importance

of

developing

and

diversifying

regional

economies

2.11.1
Development in individual ORs differs greatly. With
the exception of a few initiatives, new sectors are not very well
established in the ORs and can on no account be an alternative
to the traditional sector.

It

should be highlighted that

2.11.2
the public sector
(European, central and regional administration, public compa-
nies, universities and research centres) plays a crucial role as an
engine of activity. Also, universities are important in the ORs:
retaining them is therefore vital. The EESC suggests establishing
a European bursary to attract students of all nationalities.

2.11.3
Local companies lack investment capacity. They are
consequently very much dependent on Community aid to carry
out projects other than in traditional sectors.

2.11.4
The potential for funding companies is restricted by
extra costs. The EESC considers it indispensable to have a finan-
cing policy that helps companies to develop their fields of
activity. The EESC also wishes to stimulate a policy of company
creation by facilitating access to venture capital in order to assist
the implementation of projects that would bring added value to
the ORs.

2.12 Living conditions

the specificities of

The EESC proposes that

2.12.1
these
outermost regions be taken into account and a long-term
coherent policy adapted accordingly. Regions and cities should
be made more attractive by improving access to them and
supporting research and innovation, including new information
and communication technologies.

— by developing traditional

sectors,
activity and the training of workers.

through promotional

2.12.6
The EESC is responsive to the situation of the ORs
and wishes to see an improvement in working conditions and a
rise in the standard of living through an ambitious policy that
tempers the handicaps and paves the way to the creation of
added value.

2.12.7
It should be noted that public services of general
interest represent one of the main problems faced by OR resi-
dents. The EESC thinks that the EU's OR policy should take
account of the fact that if convergence is to advance, social
cohesion must be increased by enhancing the quality of public
services.

2.13 Cross-border cooperation

The

EESC highlights

dynamic
2.13.1
cross-border cooperation with other regional groupings apart
from the European Union, to establish common synergies for
increasing development in these regions; this would be condi-
tional on the involvement of the ORs' local authorities.

need

the

for

2.13.2
The EESC would wish to see a thorough examination
of cross-border cooperation and is convinced that solutions can
be found. However, the usual safeguards will need to be put in
place to make sure no new problems are created.

2.14 Tax system

2.14.1
The ORs have specific economic and tax systems,
included among those approved by the EU. The EESC believes
that maintaining these specific economic and tax arrangements
is crucial to helping ORs overcome the structural difficulties
they face.

2.12.2
The Committee feels that social dialogue must be
fostered in these regions and that EU policy must take this into
account in future OR objectives.

2.15 Cohesion policy

2.12.3 More and better jobs should be created by encoura-
ging more people into the labour market and facilitating busi-
ness start-ups, by making workers and companies more adap-
table and by increasing investment.

2.15.1
Achieving economic, social and territorial cohesion is
one of the main EU goals that will have to be stepped up in
future. The EESC maintains that European OR policy must be
aimed at increasing cohesion so that all sections of the popula-
tion can enjoy a better quality of life.

Local and regional governments

2.12.4
for
implementing OR policies sometimes tend to overlook the
the EESC considers
objective of enhancing social cohesion;
social and territorial cohesion a priority, which must be factored
in.

responsible

2.15.2
Cohesion policy must enable businesses to modernise
and develop and new businesses to be created for the young. In
pursuit of this goal, innovation is a priority in order to create
new opportunities and promote research and training centres in
association with the business world.

European policies must take account of these goals
2.12.5
and put in place an action policy to achieve economic develop-
ment. To begin with, the EESC would like to see a policy to
make the ORs more accessible:

2.15.3
To increase cohesion, not only must economic devel-
opment be encouraged, but there must also be an increase in
quality of jobs, pay and public services.

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2.15.4
The ORs can play a considerable role in regional
development, as they are very important European platforms for
companies. They can also act as a regional model in developing
civil society participation and as a world reference in terms of
the social model.

2.16 Strengthening the Wider Neighbourhood Action Plan

The location of the ORs gives them the opportunity
2.16.1
of a privileged partnership with other neighbouring regions.
However, this policy must be further stepped up, as it is insuffi-
ciently and unevenly implemented. The EESC points out that
this partnership must not be uniquely with the mother countries
and on their initiative, and that there should be measures to
encourage mutual acquaintance in these parts of the world.

2.17 Economic Partnership Agreements (EPAs)

EPAs could offer an opportunity for the development
2.17.1
of outermost
this requires study and reliable
analysis of these future agreements. The EPAs must take account
of the interests of all stakeholders.

regions, but

The EESC calls for these agreements to foster partici-
2.17.2
pation of the social partners and civil society in both the ORs
and third countries.

2.17.3
The EESC advocates closer relations and dialogue
between the ORs and the ACP States, aimed at identifying syner-
gies and fostering economic development for all.

2.18 Migratory flows

The EU is currently drawing up a common immigra-
2.18.1
tion policy to take account of the demographic situation, labour

Brussels, 22 April 2008

markets and cooperation with countries of origin. Migratory
flows are a serious concern for ORs. The ORs need arrange-
ments to reduce illegal and/or irregular flows. Any European
migration policy must therefore take appropriate account of the
particular needs of ORs and provide sustainable solutions to the
problems they face.

An impact assessment

conducted to
2.18.2
provide a better understanding of this matter and offer solutions
to migration issues.

should be

2.18.3
The Committee calls for EU immigration policy to be
more ambitious, aimed at managing immigration through
common legislation and transparent procedures. Europe must
be able to facilitate immigration for the ORs by taking account
of demographic changes of the labour market.

Given demographic trends in Europe, migratory flows
2.18.4
are set to increase. Because of their location, ORs have to deal
with problems arising from irregular immigration and need EU
solidarity in this regard. The European Agency for the Manage-
ment of Operational Cooperation at the External Borders must
step up its activities in the ORs.

2.19 Increasing the number of ORs

2.19.1
Certain Member States, specifically France and the
Netherlands, are currently considering the idea of increasing the
number of ORs. This move would require a positive decision by
the Council. The EESC stresses, however, that if the existing and
the EU will have to
new ORs are to be better integrated,
earmark more funds to this area.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS