Communication from the Commission to the European Parliament AND to the Council on promoting the adaptation of the European Union fishing fleets to the economic consequences of high fuel prices
Date: 2008-07-08
Institutions: European Commission
Subjects: EU aid, common fisheries policy, fisheries policy, fisheries structure, motor fuel, price increase

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.7.2008 
COM(2008) 453 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND TO THE COUNCIL 

on promoting the adaptation of the European Union fishing fleets to the economic 
consequences of high fuel prices  

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND TO THE COUNCIL 

on promoting the adaptation of the European Union fishing fleets to the economic 
consequences of high fuel prices  

1. 

Introduction 

The  European  Union  (EU)  has  a  critical  interest  in  maintaining  a  sustainable  fishing 
industry.  The  fisheries  sector  is  a  key  component  of  the  economic  life  of  several  coastal 
regions. European fisheries bring a distinct contribution to food security and national health 
by providing a range of high-quality local products to EU consumers. 

The  EU  fisheries  sector  has  long  suffered  from  a  vicious  circle  of  poor  economic 
profitability and over-exploitation of stocks due to a significant overcapacity. Several steps 
have  been  taken  since  the  2002  reform  of  the  Common  Fisheries  Policy  (CFP)  to  counter 
this vicious circle. However, overcapacity and excessive fishing effort remains an issue for 
many  segments  of  the  EU  fleet  and  continues  to  jeopardise  the  economic  viability  of  the 
sector. 

EU  catches  have  steadily  declined  since  1993,  at  an  average  of  2%  per  year,  leading  to 
constantly  declining  revenues  (-25%  since  the  early  nineties).  In  particular,  almost  all 
demersal stocks have declined in recent years and are currently not sustainable. In addition 
market prices have remained constant or even diminished. With declining revenues and an 
excessive  capital  invested  (estimated  at  around  40%),  there  is  a  high  leverage  effect  of 
changes in operating costs, which has squeezed the industry margins for several years. The 
absence  of  a  sufficient  return  on  capital  has  delayed  modernisation  and  further  weakened 
competitiveness of the fisheries sector.  

Within the context of this structural fragility the sharp increase in global oil prices has hit 
hard. The international Brent oil price has more than quintupled from US$20 per barrel in 
2002  to  over  US$130  per  barrel  by  June  2008  and  shows  no  signs  of  stopping.  Since 
January 2008, crude oil has risen by 35% (in $) and by 22% (in €). Marine fu el prices in the 
EU  since  2002  have  actually  increased  by  some  240%  (increase  partly  cushioned  by  the 
Euro  strength  vis-à-vis  the  US  dollar)  and  are  now  in  many  cases  even  above  0.7€/litre, 
although marine fuel used for fishing is already exempt from excise duty.  

The  fleet  segments  most  affected  by  the  increase  in  fuel  prices  are  the  towed  gears  (e.g. 
trawlers) which tend to have engines with large engine power; fuel costs in some cases (e.g. 
UK  and  Dutch  beam  trawlers)  represent  up  to  60%  of  the  landing  value.  The  impact  on 
vessels  using  passive  gears  (e.g.  traps,  gillnets,  long-lines)  is  significantly  less  given  the 
nature of their fishing operations, but can still account for between 5-20%. Many artisanal 
fleets will be in this latter category. 

In principle, fish prices should reflect these rising costs. However, first sale fish prices have 
continued  to  stagnate  for  the  last  decade  and  hence  fishermen  have  not  been  able  to  pass 
their cost increases down the chain. This is due in part to constraints by the strong buying 
power of processors and marketing chains which have access to fish products at low import 

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prices  from  the  global  market,  including  large  volumes  of  illegal,  unregulated  and 
unreported (IUU) fish. 

Fisheries is not the only sector suffering from problems due to high oil prices, as outlined 
by  the  Commission's  recent  Communication  on  oil  prices1  and  at  the  recent  European 
summit.  The  Commission  also  noted  that  high  oil  prices  are  mainly  a  structural 
phenomenon, and are not expected to go down in the future. However, the fisheries problem 
is specifically complex, as the European Council itself recognised in the conclusions to the 
June summit. This specificity lies in the double constraint - from the resource and from the 
market  -  which  makes  it  less  resilient  to  economic  pressure.  It  also  lies  in  the  fact  that 
almost the entirety of the sector is composed of small and medium enterprises and is heavily 
concentrated  in  peripheral  areas  featuring  high  fisheries  dependency,  both  in  terms  of 
income and employment. 

The Commission had issued a Communication in 2006 that acknowledged these economic 
difficulties  and  outlined  a  number  of  available  policy  tools  at  EU  and  national  level  to 
tackle the difficulties. Since then, however, fuel prices have escalated dramatically and the 
situation has deteriorated further. There is therefore now a compelling need and a window 
of  opportunity  to  act  more  decisively  in  order  to  avert  a  severe  crisis  for  the  EU  fishing 
industry and foster the much needed restructuring.  

The  Commission  is  thus  proposing  an  emergency  package  to  address  both  the  immediate 
situation  of  economic  and  social  hardship  and  to  make  a  long  term  contribution  to  tackling 
systemic  overcapacity. This  response  must  be EU-wide  and  co-ordinated  in  order  to  avoid 
distorting competition between Member States or fleets.  

2. 

Principles underlying the package 

Ensuring an in-depth adaptation of the EU fleet towards economic and environmental 
sustainability 

The  crisis  triggered  by  high  fuel  prices  makes  it  imperative,  more  than  ever,  to  attack  the 
root of the structural problems of the sector. The package will therefore focus primarily on 
reducing fishing overcapacity while ensuring that vessels can operate more efficiently and 
at  higher  productivity,  thus  helping  the  sector  to  become  more  competitive;  no  measures 
will be allowed that would increase fleet capacity or fishing effort. It will also address the 
problem  of  the  high  dependence  on  fuel,  which  should  be  reduced  through  modernisation 
and reconversion towards fuel efficient fishing techniques and equipment. A number of the 
proposed  measures  will  improve  the  energy  efficiency  and  reduce  the  emissions  of  the 
fishing  fleet  as  a  whole.  Moreover,  this  will  promote  the  moving  away  from  fishing 
techniques which are also particularly damaging for the environment (e.g. bottom trawlers). 
Finally, it will focus on increasing the first sale value of fish.  

Providing immediate support to the sector to alleviate social and economic hardship 

The current situation is not sustainable for large parts of the sector. An increasing number of 
fishing  vessels  are  tied  up  at  port  since  it  is  simply  uneconomical  for  them  in  the  present 
circumstances to go to sea. Temporary support is needed primarily for crew members who 
have  seen  their  income  curtailed  in  the  recent  months.  Support  is  also  needed  for  vessel 

1 

Facing the challenge of higher oil prices, COM(2008) 384, Brussels, 13-VI-2008 

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owners who need to be given some breathing space to engage into restructuring which is the 
only way to bring long term remedies. The package thus provides for some urgent measures 
of limited duration, mainly of social nature. 

Focusing the bulk of the effort on very badly hit segments of the fleet through Fleet 
Adaptation Schemes 

It is essential that the EU and Member States focus their efforts and resources where they 
are  most  needed  and  on  those  which  are  more  vulnerable.  This  should  then  be  translated 
into specific measures, in particular regarding the identification of recipients and derogations 
to current thresholds in the EFF Regulation. While the problem of high fuel prices affects the 
whole fishing industry, it is in those sectors that are very badly hit that the scope for more 
efficiency is largest. The package is therefore primarily addressed to fleet segments which 
have  a  high  level  of  incidence  of  fuel  costs  (min.  30%  of  total  production  costs).  Support 
will  be  granted  to  these  fleet  segments  in  various  forms,  provided  they  define  a 
comprehensive  Fleet  Adaptation  Scheme  that  includes,  among  other,  a  substantial 
permanent reduction (min. -30%) of the fishing fleet capacity and a significant improvement 
in its energy efficiency.  

Ensuring coordinated EU intervention through an enhanced use of the EFF and possibly 
other EU funds and instruments  

This is an EU emergency which requires coordinated solutions at EU level. Given that the 
EU has common fish resources and a common fish market, we should avoid uncoordinated 
national initiatives which could end up displacing the problems elsewhere, thus affecting the 
level playing field among Member States. For this reason, the package relies basically on an 
enhanced  use  of  the  European  Fisheries  Fund  (EFF),  which  is  "the"  CFP  instrument 
designed to assist the sector. The package will provide for the adjustment of existing EFF 
rules  and  procedures  on  an  exceptional  and  temporary  basis  to  make  them  more  usable  in 
the  current  situation.  Funds  will  thereby  be  unlocked  for  an  immediate  use  in  structural 
interventions and transitional accompanying measures, as required by the current economic 
crisis.  

The Commission invites Member States to reprogramme their EFF operational programmes 
in  view  of  adapting  the  current  allocation  of  funds  between  priority  axes,  allowing  for  a 
greater  concentration  on  Axis  1  measures  in  the  coming  two  years.  The  Commission  will 
also propose derogations from the EFF regulation in order to increase the amount of the pre-
financing payments of the operational programmes to the Member States and to increase the 
ceiling of participation of the EFF to measures financed in the context of this action. 

However, the dimension of the crisis and the extent of the measures that need to be taken 
will  demand  an  additional  financial  effort.  The  Commission  thus  envisages  to  provide 
additional  EU  financing  for  the  measures,  along  the  lines  described  in  Section  6  of  this 
communication. 

State  aid  to  accompany  the  process  may  also  be  facilitated,  which  may  require  some 
adaptation to existing rules, without however jeopardising basic legal principles in this area. 
The  package  will  be  carefully  designed  to  ensure  compliance  with  WTO  rules  and 
coherence with the ongoing negotiations on fisheries subsidies. 

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3. 

Package of measures 

The  package  will  consist  mainly  of  measures  based  on  temporary  derogations  from  rules 
under the EFF, to support a faster adaptation of the Community fleet to the present situation 
and to provide temporary relief in order to cushion economic and social consequences in the 
transitional  phase.  It  will  give  Member  States  the  possibility  to  develop  Fleet  Adaptation 
Schemes for the fleets that are most dependent on fuel and most significantly affected by the 
situation of overcapacity. 

The package will take primarily the form of a proposal for a Council regulation instituting 
an ad hoc special, temporary regime which will derogate from some provisions of the EFF 
regulation for a period up to end 2010.  

4. 

Measures 

Five  main  types  of  measures  are  envisaged:  emergency  measures,  restructuring  measures, 
horizontal measures, market measures, and measures facilitating the use of the EFF. 

4.1. 

Emergency measures 

4.1.1.  Exceptional emergency aid for temporary cessation of fishing activities 

In  order  to  allow  Member  States  and  fishing  enterprises  to  elaborate  the  necessary 
restructuring  and  adaptation  initiatives,  the  Commission  proposes  to  allow  Member  States 
to  grant  emergency  aid  under  the  form  of  financing  the  temporary  cessation  of  fishing 
vessels  for  a  maximum  period  of  three  months  (to  commence  before  30.11.2008).  Such  a 
measure may finance crew costs and fixed costs of vessels. This measure will only apply in 
cases where there is an explicit commitment that the enterprises benefiting from it will be 
involved  in  restructuring  leading  to  a  reduction  of  capacity  and  fishing  effort  under  e.g. 
Fleet  Adaptation  Schemes  (see  below),  effort  adjustment  plans,  national  decommissioning 
schemes, fishing plans, other restructuring/modernization measures. This restructuring shall 
commence  within  six  months  from  the  date  of  entry  into  force  of  the  Council  regulation 
mentioned in paragraph 3 (failing which, the aid must be repaid). 

The total public financial contribution to this measure shall be capped at €400 million and 
will be authorised to Member States in proportion with EFF national financial allocations. 
This  temporary  cessation  shall  not  be  taken  into  consideration  when  determining  the 
thresholds  (duration  and  budget)  set  by  the  EFF  Regulation  for  temporary  cessation 
measures.  

This  temporary  cessation  shall  be  tailored  with  a  view  to  enhancing  economic  benefits  by 
supporting  stock  recovery  and/or  by  promoting  more  favourable  marketing  conditions.  To 
that  effect,  Member  States  are  encouraged  to  link  the  period  of  temporary  cessation  with 
considerations of biological dynamics, seasonality and market aspects.  

4.2. 

Restructuring measures (Fleet Adaptation Schemes) 

Fleets may benefit from special support measures by developing Fleet Adaptation Schemes, 
to  be  adopted  by  the  Member  State.  Mandatory  requirements  for  the  Fleet  Adaptation 
Schemes will be that:  

•  fuel represents on average at least 30% of the production costs of the fleet,  

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•  a permanent reduction of at least 30% of the fishing fleet capacity is assured. The package 
shall introduce measures that ensure compliance with the conditions and outcomes of the 
Fleet Adaptation Schemes, including the 30% capacity reduction requirement. In very 
exceptional circumstances, and only for Member States whose fleet is less than 100 
vessels, this threshold can be lowered when a 30% reduction would disproportionately 
affect the viability of the fisheries related activities depending on this fleet.  

The  Commission  will  ensure  that  appropriate  control  mechanisms  are  in  place  to  ensure 
compliance with the commitments taken by Member States and undertakings in the context of 
the implementation of the package. Lack of compliance will be sanctioned, i.e. aid granted in 
breach  of  the  conditions  and  requirements  imposed  by  the  above  mentioned  Council 
Regulation will have to be reimbursed.  

In  particular,  the  Commission  will  closely  monitor  the  implementation  of  the  mandatory 
requirement in relation to the permanent reduction of capacity to be achieved in the context of 
a  Fleet  Adaptation  Scheme.  To  that  end,  vessels  which  are  earmarked  for  permanent 
decommissioning  will  be  requested  to  cease  permanently  their  fishing  activity  within  six 
months from the adoption of the Fleet Adaptation Scheme. 

The  following  measures  will  only  be  allowed  for  vessels  and/or  fishermen  concerned  by 
Fleet Adaptation Schemes. 

4.2.1.  Facilitate access to EFF premiums for permanent cessation of fleets in restructuring 

The Commission proposes to derogate from EFF rules in order to lift any limitation to the 
access  of  permanent  cessation  premiums  for  the  fleets  involved  in  a  Fleet  Adaptation 
Scheme,  provided  that  vessels  benefiting  from  these  premiums  cease  their  fishing  activity 
promptly.  Member  State  authorities  should  ensure  that  following  successful  fleet 
restructuring,  sufficient  management  mechanisms  are  in  place  to  guarantee  that  capacity 
will in future remain in balance with resources.  

4.2.2.  Additional aid for temporary cessation  

The  Commission  proposes  to  allow  vessels  involved  in  a  Fleet  Adaptation  Scheme  to 
receive aid for additional months of temporary cessation, as long as it is carried out before 
31.12.2009. This temporary cessation shall not be taken into consideration against the limits 
(duration and budget) set by the EFF Regulation. The aid shall help finance crew costs and 
vessel fixed costs during the time of inactivity.  

The aid will be granted within the following limits:  

•  3 months to vessels which are going to be scrapped or change engine; a maximum of 3 
additional months may be allocated after 1.1.2010 in case restructuring is still ongoing, 

•  Six weeks to any other vessel involved in other restructuring measures within the Fleet 

Adaptation Scheme. 

The total public financial contribution to this measure shall be capped at €400 million and 
will be authorised to Member States in proportion with EFF national financial allocations. 
This  temporary  cessation  shall  not  be  taken  into  consideration  when  determining  the 
thresholds  (duration  and  budget)  set  by  the  EFF  Regulation  for  temporary  cessation 
measures. 

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4.2.3. 

Increase the aid intensity for vessel modernisation  

Currently the mandatory private financial participation in relation to financing investments 
on board is 60% and 80% for gear and engine replacement, respectively. In order to provide 
a  substantial  additional  incentive  for  fishing  companies  to  use  more  efficient  vessels  and 
gears,  the  Commission  proposes  to  reduce  the  mandatory  private  financial  participation  to 
measures of vessel modernization where the investments concern energy saving equipment, 
engine  or  gear.  The  actual  percentage  will  be  defined  by  Member  States  on  the  basis  of 
objective criteria such as the age of the vessel, the energy efficiency improvement, and the 
degree  of  capacity  reduction  included  in  the  Fleet  Adaptation  Scheme.  The  minimum 
mandatory  private  financial  participation  should  nevertheless  not  be  less  than  40%  of  the 
investment costs. 

Aid for the modernisation of gear and equipment for vessels less than 5 years old shall also 
be  permitted  on  the  condition  that  there  will  be  a  substantial  reduction  in  energy 
consumption. 

4.2.4.  Allow the granting of partial decommissioning aid in case of replacement of an old 

vessel with a new smaller and more energy efficient vessel  

The Commission proposes that a vessel owner scrapping one or more vessels and replacing 
them by a new one, which is smaller and less fuel consuming, may be eligible to receive the 
scrapping premium (i.e. "partial decommissioning") in relation to the difference between the 
capacity  of  the  scrapped  vessels  and  the  capacity  of  the  replacing  vessel.  The  Member 
States  shall  under  partial  decommissioning  only  be  allowed  to  replace  25%  of  the  total 
capacity  permanently  withdrawn  in  the  Fleet  Adaptation  Scheme  to  which  partial 
decommissioning is applied.  

This  proposal  introduces  more  flexibility  into  scrapping  policies.  It  must  however  be 
carefully designed to support fleet restructuring, but also the overarching policy objectives 
of  conservation.  The  capacity  of  the  new  vessel  shall  be  smaller  than  the  withdrawn 
capacity; the maximum replacement ratio allowed per vessel should not be higher than 2:5. 
Furthermore,  the  measure  should  only  be  permissible  if  the  Fleet  Adaptation  Scheme 
comprises a high percentage of vessels in a homogeneously defined fleet.  

4.3.  Horizontal measures (outside Fleet Adaptation Schemes) 

4.3.1. 

Increase the EFF aid intensity for fuel-saving equipment 

The  Commission  proposes  to  apply  a  lower  rate  for  mandatory  private  financial 
participation  (40%)  for  investment  on  board  concerning  equipment  which  helps  to 
significantly reduce fuel consumption. 

4.3.2.  Expertise in relation to energy audits and the development of restructuring plans 

The  Commission  proposes  to  adjust  EFF  rules  on  collective  actions  to  make  sure  Member 
States  can  provide  financial  assistance  to  vessel  owners  for  seeking  expertise  in  relation  to 
energy audits and expert advice on the development of restructuring/modernisation plans. 

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4.3.3.  Expand the range of eligible beneficiaries of EFF socio-economic measures 

Currently  early  departure  and  early  retirement  aid  under  EFF  is  granted  only  to  fishermen. 
The  Commission  proposes  to  allow  such  aid  also  for  other  workers  in  fisheries-related 
activities (e.g. auction halls, port services etc.) in order to tackle the difficulties arising from 
closures and consolidations as a consequence of reduced fishing activities. 

4.3.4.  Promote  research  on  technical  improvements  for  vessels/engines/equipment/gear  to 

reduce energy consumption and extend the eligibility of pilot projects 

Research activities concerning energy efficiency in fishing remain vital in the longer term and 
thus  more  funds  should  be  made  available  for  technical  developments  in  this  area.  The 
Commission  therefore  proposes  to  amend  EFF  eligibility  rules  to  enable  Member  States  to 
promote  pilot  projects  concerning  technical  improvements  aiming  at  reducing  energy 
consumption. 

EU-wide  research  projects  are  ongoing  and  merit  sufficient  knowledge  sharing  when 
completed2.  The  Commission  will  continue  to  explore  ways  to  encourage  further  research 
programmes and studies in this domain, along with other industrial sectors.  

The  sector  could  also  encourage  national  research  funders  to  examine  possible  research 
activities in this domain through networks such as ERA-NET3. In this context a more strategic 
approach,  going  beyond  the  current  coordination  of  the  several  ERA-NET  actions  covering 
marine research, is proposed in the foreseen Commission Communication on "A Marine and 
Maritime Research Strategy for Europe". 

4.4. 

Market measures  

The Commission encourages the Member States to provide the opportunity and the financial 
means to stakeholders in order to promote actions aiming at improving in particular the first 
sale  value  of  fish.  This  shall  be  done  by  using  both  the  largely  unexploited  possibilities 
offered by the EFF and the opportunities under the Common Market Organisation laid down 
in  Council  Regulation  (EC)  No  104/2000.  The  Commission  proposes  promoting  initiatives 
aiming at the following objectives: 

•  Increasing fishermen's marketing position by joining forces within larger Producer 

Organisations or local marketing associations 

•  Improving planning of EU production and its adjustment to demand  

•  Promoting quality initiatives e.g. marking, labelling and better handling and processing 

•  Promoting information to consumers (health, nutrition, responsible fishing, etc.) 

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European Commission study "Energy Saving in Fisheries" (ESIF) FISH/2006/17, European 
Commission website on energy efficiency in fisheries (planned launch in September 2008), European 
Commission 6th Research Programme projects "HOP – Macro-economic impact of High Oil Price in 
Europe" and "Superior life-time operation economy of ship propellers"; www.hop-project.eu, 
http://canal.etsin.upm.es/superprop/. 
The aim of ERA-NET is to promote coordination and cooperation of national and regional research 
programmes 

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•  Developing tools to analyse value chain and prices: market audit/assessments, 

establishment of a price monitoring system, to be related to the ongoing food price 
monitoring exercise that is being carried out by the Commission. 

•  Strengthening the monitoring in view to ensure compliance with labelling provisions and 

fight against IUU fishing. 

4.4.1.  Measures under the Common Market Organisation 

The  production  sector  has  to  find  ways  of  successfully  and  efficiently  adapting  and 
regulating supply to meet market requirements, and especially the needs of the distribution 
sector.  The  only  way  to  secure  commercially  viable  prices  is  to  provide  the  market  with 
what  it  wants  in  terms of  quantity,  quality  and  regularity  of  supply.  Excessive  landings  in 
periods  of  the  fishing  year  when  the  market  is  slack  can  be counterproductive  in  terms  of 
business management and commercial return. 

In  this  vein,  producer  organisations  have  at  their  disposal  the  operational  programmes,  a 
powerful  instrument  for  the  regulation  of  the  market.  These  are  strategies  for  adapting 
supply  to  demand,  by  way  of  which  producer  organisations  must  plan  in  advance  the 
deliveries  from  their  members  and  must  examine  ways  of  improving  financial  returns  of 
their  catches.  In  the  current  situation,  the  Commission  recommends  that  producer 
organisations  redirect  some  of  their  measures  and  adopt  a  new  position  as  regards  their 
members and the market. In order to maximise the first sale value of their catches, producer 
organisations are encouraged to take specific initiatives such as redirecting products towards 
different  market  outlets,  raising  their  quality,  introducing  voluntary  labelling  initiatives  or 
developing  other  promotional  activities,  as  well  as  concentrating  fishery  production  in 
periods of higher prices. 

In the case of products marketed fresh, there is a need for the production sector to create the 
means  of  improving  quality  and  thus  adding  value.  The  quality  improvement  plans  is  a 
mechanism  designed  to  encourage  producer  organisations  to  enhance  the  quality  of  their 
products in all stages of production and marketing. Yet they have met very little response in 
spite of the financial support available under the EFF. Therefore the Commission invites the 
Member States to support producer organisations in their efforts to prepare and implement 
quality improvement plans. 

Another  imperative  need  for  Community  producers  is  to  take  into  account  changes  in 
patterns of consumer habits and of distribution. A majority of products are now sold through 
the big distribution chains, which generally have a policy of buying in quantity on the basis 
of  forecast  demand.  All  the  uncertainties  over  landings  and  the  fragmented  nature  of  the 
first-stage  marketing  sector  are  reasons  why  these  major  chains  may  avoid  purchasing 
Community products. The setting up of inter-branch organisations can contribute to improve 
the  situation.  These  organisations  gather  representatives  of  production,  business  and 
processing  in  order  to  carry  out  measures  that  would  benefit  the  entire  industry.  Most  of 
these measures qualify for financial assistance from the EFF. Nevertheless, there has been a 
poor  acceptance  of  these  organisations  so  far.  Therefore  the  Commission  encourages 
Member  States  to  promote  the  establishment  of  inter-branch  organisations  in  order  to 
strengthen the co-operation between the different operators of the marketing chain. 

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4.4.2.  Observatory / price monitoring system 

The  Commission  will  put  in  place  the  necessary  measures  to  establish  a  price  monitoring 
system for fish and aquaculture products throughout the marketing chain, to be related to the 
ongoing food price monitoring exercise being carried out by the Commission. This will lead 
to  developing  a  tool  for  analysis  and  decision  making  aiming  at  improving  knowledge  on 
price  setting  and  understanding  how  added  value  is  generated  from  the  first  sale.  Some 
recent studies have demonstrated that price and added value transmissions mechanisms are 
heterogeneous  according to family of products  and  marketing  chain. The price monitoring 
system will concern aquaculture and fish products which are captured, transhipped, landed 
or imported. 

Such  an  analytical  tool  does  not  aim  at  influencing  price  directly  but  should  enable  to 
improve  anticipation  of  price  variations.  It  is  also  expected  that  improved  information  on 
markets  mechanisms  should  enable  producers  to  adapt  their  supply  to  get  better  value  for 
their products.  

The  Commission  is  conducting  a  study  on  supply  and  marketing  of  fish  and  aquaculture 
products  within  the  EU  which  will  specifically  focus  on  price  mechanisms.  It  will  also 
provide  methodological  inputs  for  setting  a  price  monitoring  system.  First  consolidated 
results and recommendations will be shared and discussed with stakeholders by early 2009. 

Various  elements  of  price  analyses  are  already  addressed  in  the  Common  Market 
Organisation  (CMO),  which  may  be  reviewed  at  the  forthcoming  revision  of  the  CMO 
scheduled for 2009. 

4.4.3.  Specific Stakeholder Initiative Projects 

The Commission will examine the possibility of modifying the second fisheries instrument 
to  finance  directly  stakeholder  organisations'  initiatives  in  the  area  of  market  monitoring, 
labelling, etc. through calls for proposals. 

4.5. 

Measures facilitating the use of the EFF 

4.5.1.  Reprogramming 

Member  States  are  strongly  encouraged  to  use  the  EFF  to  the  greatest  extent  possible  by 
adjusting operational programmes, where necessary, with a view to maximising the financial 
support  to  initiatives  aiming  at  tackling  the  fuel  crisis.  To  this  extent  Member  States  shall 
consider  a  substantial  transfer  of  funds  within  their  operational  programmes  from  the  other 
EFF axes to increase the Axis 1 (adjustment of the Community fishing fleet) allocation.  

Strengthening  EFF  support  for  these  initiatives  may  in  some  cases  only  require  a  re-
distribution of funds between measures within Axis 1, which can be decided autonomously by 
the Member States. In most cases, it will require a programme modification. The Commission 
will commit to examine and approve all such modifications in the shortest timeframe possible 
to allow for their rapid implementation. 

Such reprogramming would be a necessary pre-condition for allowing the access of Member 
States to possible additional funding opportunities that the Community may make available at 
a later stage. 

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4.5.2.  Easing the use of EFF funds 

In  order  to  make  it  easier  for  those  Member  States  that  may  have  difficulties  in  quickly 
mobilising the national co-financing funds for Axis 1 measures, the Commission proposes to 
increase the permitted EFF co-financing rates for actions taken in the context of the proposed 
ad hoc measure to up to 95% of the total public expenditure.  

In  addition,  the  Commission  proposes  to  double  the  EFF  pre-financing  amount  paid  by  the 
Commission after the adoption of the operational programmes, from 7% to 14% of the total 
EFF  contribution  to  the  operational  programme,  for  those  Member  States  which  request  it. 
This will considerably increase the funds immediately available for Member States to quickly 
pay for emergency measures once any necessary budgetary transfers have been completed. 

4.5.3.  Retroactivity 

The temporary cessation measure implemented as of 1 June 2008 will be eligible for support 
under the EFF. 

5. 

Other measures 

5.1. 

De minimis aid  

Currently de minimis rules limit of €30,000 are applicable  on a company basis, which creates 
large disparities in relation to the benefit fishermen can obtain from Member States regimes 
financed  under  the  de  minimis  threshold.  Based  on  further  economic  analysis,  the 
Commission  will  consider  modifying  this  regime  for  the  fisheries  sector  by  allowing  the 
concession of the €30,000  de minimis aid per vessel instead of per firm, but with an overall 
cap  of  €100,000  per  enterprise.  The  Commission  undertakes  to  carry  out  the  necessary 
economic analysis in the very short term. 

5.2. 

Social aid in the form of decreased social security contributions 

In  view  of  the  importance  of  safeguarding  employment  the  Commission,  through  a 
modification of the Guidelines for the examination of state aid to fisheries and aquaculture, 
will  open  the  possibility  for  Member  States  to  take  responsibility  for  part  of  the  rates  for 
social security contributions for fishermen. 

This shall be limited only to the contributions payable by fishermen (and not the contribution 
payable  by  the  enterprises  employing  them),  and  provided  that  there  is  no  associated 
reduction  in  the  normal  remuneration  of  the  employees  in  question  by  the  employer.  The 
specific  case  of  those  artisan  fishermen  working  as  the  sole  employee  on  their  own  vessel 
should also be covered. 

This will bring  about  a direct benefit to employed  fishermen, including sole  self-employing 
ones, as these are able to continue receiving the benefits of social security while they may be 
allowed to pay a decreased social security contribution. The measure would be possible for a 
maximum period of two years. 

6. 

Additional funds 

It is essential that this package is applied in a way that safeguards a level playing field across 
the Union. There should be no distortion of competition among EU fishermen resulting from 

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the different ability of Member States to mobilise public or Community funding. There should 
also  be  no  discrimination  against  those  Member  States  that  have  already  engaged  in  fleet 
restructuring.  The  best  way  to  do  this  is  to  use  the  EFF  as  the  main  instrument  for  the 
structural adaptation of EU fleets. Therefore, the EFF will remain the principal contributor to 
the  package.  However,  there remain  several  important  problems  which  cannot  be  solved  by 
the sole use of the current EFF:  

•  Several  Member  States  have  a  very  small  EFF  allocation.  This  is  because  country 
repartition keys under the EFF are not in direct relation with the size of the fleet but rather 
based  on  more  general  criteria  governing  structural  funds.  The  implementation  of  the 
package  through  exclusive  use  of  the  EFF  could  create  unwarranted  distortions  to  the 
detriment of these Member States.  

•  Within some Member States the bulk of EFF funding is focused on convergence regions, 
in line with the overall logic applying to EU structural funds. The result of this situation is 
that  EFF  funds  cannot  be  sufficiently  mobilised  to  restructure  the  fleets  located  outside 
convergence regions. 

•  Some Member States benefit from a larger EFF allocation but still remains insufficient to 
tackle  all  the  necessary  measures  needed  for  the  extensive  restructuring  of  the  fleets 
concerned by the crisis. 

•  Several  Member  States  have  provided  for  significant  restructuring  plans  in  their  EFF 
operational programmes but they extend over the whole period (2007-2013). Tackling the 
current  crisis  will  require  them  to  shorten  the  period  of  these  plans,  leading  to  a 
considerable increase in their short and medium term financing needs.  

•  The  extent  of  the  crisis  will  require  an  unprecedented  restructuring  effort.  The 
implementation  of  the  package  will  therefore  involve  a  large  amount  of  public  financial 
support. The financial requirement only for permanent and temporary cessation of fisheries 
activities, in relation to fleet segments that are badly hit by the crisis, is estimated to be in 
excess  of  €1.6  billion.  With  the  additiona l  support  for  investment  to  reduce  energy 
consumption,  market  and  socio-economic  measures,  collective  actions  and  pilot  projects, 
which are all included in the temporary specific action to promote the restructuring of the 
fishing fleets affected by the economic crisis, the total financial requirement is estimated to 
be in the region of €2.0 billion. The current pr ogramming of EFF axis 1 for these measures 
is  estimated  to  cover  around  €  600  million,  with  an  estimated  additional  €  250  million 
coming from national co-financing. The Commission further estimates that € 550 million 
will  have  to  come  from  reprogramming  of  EFF  Operational  Programmes.  The  remaining 
amount is estimated at up to €600 million. Part of  that amount could be financed through 
the unallocated margin under Heading 2 of the Financial Framework ceilings for the years 
2009  and  2010,  with  the  bulk  coming  in  2009.  This  shall  not  prejudge  actual  CAP 
expenditure  levels.  Any  additional  amount  would  be  conditional  on  CAP  expenditure 
levels in these years being well below the corresponding sub-ceilings, and will be subject 
to full analysis and justification.  

Before any additional funds can be mobilized, the Commission will first ensure that Member 
States  have  made  available  the  significant  resources  highlighted  above  through  OP 
reprogramming  and  national  funds.  For  implementation  purposes,  the  Commission  will 
examine the possibility of establishing an ad hoc financial instrument. This instrument would 

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have a limited duration aligned with the fuel crisis measures under the EFF. Resources under 
this new ad hoc facility would be allocated to Member States using specific criteria.  

In  particular,  in  order  to  benefit  from  this  additional  support,  Member  States  should 
previously  have  made  a  substantial  contribution  of  their  EFF  allocation  to  the  measures 
needed  to  tackle  the  crisis,  by  way  of  reprogramming  the  funds  of  their  operational 
programmes  in  favour  of  Axis  1,  or  they  should  have  set  up  ambitious  Fleet  Adaptation 
Schemes involving a significant share of the national fleet. 

7. 

Timing  

Actions under the Council Regulation shall be committed before 31 December 2010.  

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