Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Investing today for tomorrow's Europe
Date: 2009-01-28
Institutions: European Commission
Subjects: European Economic Area, European cooperation, anti-crisis plan, economic recession, financial aid, financing plan

EN 

EN 

   EN 

 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.1.2009 
COM(2009) 36 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Investing today for tomorrow's Europe 

EN 

   EN 

 
 
  
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Investing today for tomorrow's Europe 

Since autumn last year, the European Union has faced a double challenge. The crisis in the 
financial  markets  sparked  a  sharp  downturn  in  the  European  economy.  It  became  clear  that 
families,  businesses  and  communities  across  Europe  would  feel  the  impact  through 
unemployment and lost incomes: that urgent  action  was  needed  to address the crisis and its 
consequences.  But  at  the  same  time,  Europe  was  aware  as  never  before  how  the  long-term 
strength  and  sustainability  of  the  European  economy  depended  on  spreading  the  tools  of 
competitiveness to all sectors of European society, reshaping it to face the demands of energy 
security and the imperative of cutting greenhouse gases. 
The  result  was  the  European  Economic  Recovery  Plan1  proposed  by  the  Commission  in 
November  and  endorsed  by  Heads  of  State  and  Government  in  the  December  European 
Council2.  A  Plan  which  explained  how  Member  States  and  the  EU  could  co-ordinate  their 
policies and inject an immediate stimulus into the European economy. But a Plan which was 
also carefully targeted to direct that stimulus to Europe's long-term objectives.  

An  important  part  of  the  Recovery  Plan  was  the  proposal  to  boost  EU  spending  in  defined 
strategic  sectors.  The  agreed  stimulus  of  1.5%  of  GDP  required  contributions  from  both 
national  and  EU  sources,  including  the  EU  budget.  The  EU  has  not  spent  up  to  the  agreed 
ceilings:  the  Commission  therefore  calculated  that  €5  billion  c ould  be  directed  swiftly  at 
defined  goals  such  as  energy  and  broadband.  This  would  boost  confidence  that  investment 
was not grinding to a halt, and put Europe on the path to a stronger economy for the future. 
This was amongst the aspects of the Plan picked out for "particular support" by the December 
European  Council,  recognising  also  the  need  to  take  a  suitable  geographical  balance  into 
account. 

Since  December,  the  need  to  act  has  become  clearer  still.  In  particular,  the  importance  of 
energy  security,  and  the  shortcomings  in  Europe  today,  have  become  clear.  The  direct 
consequences  were  felt  by  households  and  businesses  in  several  Member  States.  But  the 
impact of the gas crisis was felt by all, destabilising the EU's relations with its neighbours and 
bringing home the need to make the EU less dependent on external suppliers. 

This  Communication  sets  out  where  investment  should  be  targeted.  It  is  accompanied  by 
proposals  for  financing  decisions  in  the  areas  concerned.  The  projects  identified  have  been 
selected  to  match  the  EU's  strategic  goals.  EU  support  will  be  shaped  to  accelerate  projects 
and  to  bring  action  in  place  as  quickly  as  possible.  In  line  with  the  European  Council 
conclusions, a geographical balance is assured. The Commission has already tabled a proposal 
to revise the Multiannual Financial Framework 2007-2013 to make available additional funds 
under  Heading  1A,  while  respecting  the  total  amounts  agreed  in  the  inter-institutional 
agreement.3  In  the  light  of  first  discussions  with  the  budgetary  authority,  it  now  proposes  a 
transfer of resources not required under the ceiling of Heading 2 in respect of the year 2008 to 

1 
2 
3 

COM(2008) 800. 
European Council conclusions 11-12 December, Brussels. 
COM(2008) 859, 10.12.2008. 

EN 

2 

   EN 

 
                                                 
heading 1A, to fund the €3.5 billion proposed for energy projects 4, with the EUR 1.5 billion 
proposed in respect of broadband infrastructure and the new challenges indentified under the 
CAP  Health  Check  remaining  under  Heading  2  for  implementation  under  the  European 
Agricultural Fund for Rural Development. 

The  Commission  calls  upon  the  Council  and  the  European  Parliament  to  swiftly  examine 
these  proposals  and  to  mobilise  the  resources  required  from  the  budget.  This  will  make  a 
major  contribution  to  the  EU's  efforts  to  put  the  European  economy  back  on  the  road  to 
growth and  prosperity, and  show  the Union's determination to tackle challenges of strategic 
importance for the future. 

Today's Investment for Tomorrow's Energy 

Energy  has  become  one  of  the  key  concerns  for Europe.  In December,  the European  Union 
took  a set of  key  decisions  to address the  future  of energy in the Union: to drive an energy 
sector able to make cuts in greenhouse gas emissions and to make renewable energy a major 
part  of  Europe's  energy  mix.  At  the  New  Year,  Europe  was  faced  with  a  gas  crisis  which 
highlighted  the  risks  to  security  of  supply.  It  underlined  weaknesses  not  only  in  terms  of 
diversity in imports, but in terms of the ability of the EU to transfer energy inside the Union to 
where it was most needed. 

The  changes  needed  require  a  major  commitment  and  major  investment.  But  the  economic 
downturn  risks  delaying  this  investment  unless  additional  action  is  taken  now.  The  credit 
crunch  is  having  a  direct  impact  on  the  speed  with  which  Europe  is  making  the  changes 
required. The risk is a loss of momentum and technological edge, and delay today meaning 
higher  costs  later.  That  is  why  the  Economic  Recovery  Plan  put  particular  emphasis  on  the 
need for "smart investment", a stimulus to the economy targeted on clear strategic objectives. 

The Commission therefore proposes a set of three specific initiatives focused on the EU's key 
energy goals. First, support for strategic interconnection projects to help address some of the 
shortcomings  in  infrastructure  today.  Second,  investment  to  maintain  the  development  of 
offshore wind as a reliable supplier of renewable energy. Third, bringing forward a number of 
carbon capture and storage demonstration projects, to allow energy producers striving to cut 
emissions to retain the option of fossil fuels. 

These initiatives will offer targeted, precise support to specific projects. In the coming years, 
they will have to be backed up by political initiatives and investment on a major scale. But the 
EU can already make a major contribution. 

All the projects have been chosen with a view to their wider significance: infrastructure which 
will bring gains in terms of security of supply for the whole EU; technological and logistical 
advances which will mean a step forward for the European energy industry as a whole. They 
will work promote technological advance as part of the Strategic Energy Technology Plan for 
Europe, in particular integrating the results with the European Industrial Initiatives covering 
Carbon  Capture  and  Storage  and  Wind  Energy.  They  will  also  use  every  opportunity  to 
promote leverage, in particular through collaboration with the European Investment Bank. 

Connecting Europe's energy 

Last Year's Strategic Energy Review set out the different components of an effective policy 
on  security  of  supply5.  The  EU  Energy  Security  and  Solidarity  Action  Plan  pointed  to  the 
need for stable supply from  third  country partners; for effective management  of oil and  gas 

4 
5 

€1.5 billion in 2009 and €2 billion in 2010. 
COM(2008) 781, 13.11.2008. 

EN 

3 

   EN 

                                                 
stocks,  and  crisis  response  mechanisms;  for  energy  efficiency  to  limit  demand;  and  for 
making the best use of the EU’s indigenous energy resources. In particular, it highlighted how 
infrastructure  was  an  indispensible  part  of  the  mix:  infrastructure  which  the  market  has  not 
always  been  able  to  supply.  Interconnection  has  a  positive  knock-on  for  all,  reducing 
dependence and increasing competitiveness to the benefit of the internal market as a whole. 

The recent crisis in the supply of gas to European households and businesses has thrown the 
importance of infrastructure into sharp relief. The vulnerability of European energy supplies 
has  become  all  too  clear,  with  no  clear  alternatives  at  a  time  of  shortage.  Although  some 
Member States have made efforts to help make up the shortfall in others, the links to make 
this possible has often proved lacking. The crisis has therefore shown up serious weaknesses 
in interconnection. But the same gaps in infrastructure have a longer-term cost for European 
competitiveness: less access to the cheapest energy imports, and less possibility for European 
companies and consumers to source the best value energy available inside Europe. The result 
will be a permanent drag on European growth. 

At  the  same  time,  the  current  economic  and  financial  crisis  is  putting  the  brakes  on  the 
implementation  of  energy  infrastructure  projects.  Energy  companies  are  as  vulnerable  as 
others to the credit crunch: there is a real risk that projects of major strategic interest will be 
put on hold – unless public investment steps in to give lenders assurances that these are the 
right projects to support.  

The  Commission  therefore  proposes  to  use  €1.5-2  billion  of  the  stimulus  set  out  in  the 
Recovery  Plan  to  inject  the  necessary  resources  into  key  strategic  interconnections.  The 
Strategic Energy Review already identified a number of strategic energy priorities to address 
shortcomings  and  exploit  opportunities,  highlighting  Baltic  interconnection,  a  Southern  Gas 
Corridor, liquefied natural gas (LNG), the Mediterranean, Central and South-East Europe, and 
a North Sea offshore grid. Projects should also address the particular needs of small islands 
cut off from the core EU energy networks.  

The  Commission  has  used  the  Strategic  Energy  Review  to  guide  the  choice  of  projects, 
seeking  to  address  directly  the  objectives  of  security  and  diversification  of  supply.  The 
projects are spread geographically around the Union. Their benefits will be felt not only in the 
Member  State  where  they  are  located,  but  across  the  Union:  both  in  terms  of  their  strategic 
significance  for  energy  security  as  a  whole,  and  in  terms  of  the  opportunity  to  tender  for 
contracts and to supply key technologies. They will give an immediate economic boost, and 
also build a stronger European economy for the future. 

The proposal would support some 20 projects, covering both gas and electricity, as long as the 
beneficiaries fulfil key criteria to ensure the effective realisation of the projects. This includes 
provision  to  address  one  of  the  specific  shortcomings  highlighted  in  the  gas  crisis:  the 
difficulty  in  allowing  gas  flow  from  west  to  east.6  It  is  essential  that  these  projects  have 
reached  a  degree  of  maturity  that  allows  work  to  begin  quickly:  and  that  Member  States 
accept the responsibility to accelerate procedures and authorisations as required. 

The next generation of offshore wind 

The renewable energy target agreed by the EU in December has put the focus on the need to 
bring on stream the technologies required. Wind power will be key to meeting the target, as 
underlined by the Strategic Energy Technology Plan for Europe. The wind industry aims to 
deliver 12-14% of EU electricity by 2020, with over a quarter of this coming from offshore 

6 

For example, to overcome the recent case where gas could not be transferred from Austria to Slovakia 
and to contribute to the connection between Bulgaria and Romania. 

EN 

4 

   EN 

                                                 
wind. This trend is set to continue, with offshore wind farms set to enjoy the highest growth in 
the  sector.  With  many  projects  in  cross-border  coastal  and  maritime  zones  often  requiring 
cross-border  infrastructure  and  with  offshore  wind  more  technologically  and  logistically 
complex, the EU has a particular role to play in galvanising investment that might otherwise 
be neglected. 

However, it seems clear that at present, the development of offshore wind projects has been 
put  in  question  by  the  lack  of  available  finance.  Projects  ready  to  move  ahead  risk  being 
delayed,  and  some  manufacturers have already had to cut jobs as a result. The Commission 
to projects in this sector. The 
therefore proposes that around  €0.5  billion  should  be  devoted 
projects  have  been  selected  on  the  basis  of  the  ability  of  the  EU  to  add  value  to  projects 
already at a reasonable stage of development – particularly promoting regional cooperation to 
improve competitiveness and investing in advanced technology to develop a new generation 
of  wind  turbines,  infrastructures  and  logistics  which  encourage  rapid  deployment  of  the 
technology. 

Clean energy for the future 

Carbon capture and storage (CCS) has been identified as one of the key technologies for the 
future. CCS would make possible sustainable power generation from fossil fuels: an essential 
component  in  the  global  drive  to  halve  greenhouse  gas  emissions  by  2050.  It  would  allow 
Europe to take full advantage of its indigenous supplies of coal, oil and gas. And development 
of  the  technology  would  give  European  industry  an  important  market  opportunity  in  a 
technology  of  global  relevance.  However,  CCS  is  a  complex  technology  which  may  take 
many years to reach commercial viability.  

The European Council recognised the potential of CCS by setting a target of having up to 12 
demonstration  projects  up  and  running  by  2015.  The  credit  crunch  has  made  this  objective 
even more ambitious. The European Council decided last December to guarantee funding for 
CCS  through  a  share  of  revenues  from  ETS  auctioning.  However,  these  funds  will  not  be 
available  immediately  and  will  not  be  sufficient  to  bring  on  stream  the  desired  number  of 
demonstration  projects.  In  the  current  economic  situation,  investor  caution  risks  putting  the 
European Council targets into question.  

The  Commission  therefore  proposes  to  accelerate  the  work  on  these  key  demonstration  and 
infrastructure  projects.  Five  projects  will  be  supported,  with  each  needing  a  €250  million 
investment  to  ensure  their  launch.  They  will  represent  a  mix  of  technologies,  geological 
conditions and Member States. They are all at an advanced state of readiness, to ensure that 
the beneficial effects of the investment come on stream as quickly as possible. The point of 
demonstration  projects  is  also  that  the  results  will  be  made  available  to  other  players,  so 
obligations in this respect will be made clear. 

Investing for the future of rural communities 

Rural  communities  can  be  amongst  the  most  vulnerable  to  economic  downturn.  In  difficult 
times, there is a greater risk of exclusion – and when the economy starts to return to growth, 
the benefits can flow more slowly. 

One of the most important tools in the modern economy is broadband. In today's Europe, it 
unlocks  the  paths  to  finding  new  jobs,  learning  new  skills,  identifying  new  markets  and 
cutting costs. It is as essential to schools, libraries and government offices as to businesses. It 
has  become  an  essential  tool  to  making  the  modern  economy  work.  But  there  are  gaps  – 
communities where the market has not delivered coverage, due to dispersed populations and 
high  costs.  There  are  also  many  areas  where  early  broadband  technology  now  needs  an 
upgrade, to deliver the internet at speeds expected today. That is why the European Economic 

EN 

5 

   EN 

Recovery Plan set out a goal of developing broadband networks to achieve a full 100% high-
speed internet coverage by 2010. It also underlined the need to upgrade the performance of 
many  existing  networks,  alongside  efforts  to  promote  competitive  investments  in  fibre 
networks and free up spectrum for wireless broadband. 

The EU already uses rural development to promote growth in rural economies and the overall 
health of rural society. The "health check" of the CAP identified a series of new challenges of 
particular  relevance  to  European  agriculture. Tackling  these  challenges  more  quickly  would 
allow  agricultural  communities  to  bring  forward  work  to  address  these  challenges  and  be 
better  placed  to  be  ready  for  improved  economic  circumstances.  This  would  follow  the 
emphasis  given  by  the  Recovery  Plan  to  accelerating  the  implementation  of  EU  structural 
actions, to bring investment on stream early in difficult times. 

The Commission therefore proposes that the existing rural development instrument should be 
used to deliver a twofold boost to the rural economy. First, €1 billion should be fed in rural 
development spending for the specific purpose of developing broadband infrastructure in rural 
areas.  Second,  €0.5  billion  should  be  devoted  to   accelerating  the  work  to  tackle  the  new 
challenges identified in the health check of the CAP. 

The  investment  available  in  each  Member  State  will  be  fixed  by  the  Commission  in 
accordance  with  the  principles  foreseen  in  Article  69(4)  of  Council  Regulation  (EC) 
N°1698/2005.  The  Commission  intends  to  fix  them  on  the  basis  of  the  current  distribution 
key. 

Bringing the internet to rural communities 

Encouraging  broadband  already  plays  a  part  in  EU  rural  development.  The  strategic 
guidelines for rural development for programming period 2007-20137 put particular emphasis 
on  the  importance  of  Information  and  Communication  Technologies  (ICT)  for  rural 
businesses  and  the  socio-economic  development  of  rural  areas.  ICT  diffusion  and  take-up 
plays a key role in revitalising rural areas, helping the diversification of economic and social 
activities  by  boosting  economic  activity,  making  available  new  on-line  services,  and 
supporting e-inclusion. It can address the relatively low-take up of ICT in the agri-food sector, 
and help growth areas such as rural tourism. 

By the same token, where there are still gaps in broadband coverage between urban and rural 
areas and where the take-up of internet has fallen behind, there is a real risk that this translates 
into  economic  and  social  exclusion.  The  result  can  be  the  stagnation  of  rural  economies, 
unemployment and depopulation.  

This  risk  is  all  the  stronger  at  times  of  economic  downturn.  The  more  regions  are  remote, 
isolated and depopulated, the more they suffer most from the lack of broadband connections 
and access to internet. The more regions fall below the targets for broadband connection, the 
less likely they are to have the income levels to sustain their own investment.  

Funding could be focused on three key areas: 

•  Creation of new broadband infrastructure including backhaul facilities (e.g. fixed, 

terrestrial wireless, satellite-based, or combination of technologies) ; 

•  Upgrade  of  existing  broadband  infrastructure  (e.g.  increased  reliability,  speed, 

capacity, reach, better quality of service, etc.); 

7 

Council  Decision  2006/144/EC  of  20  February  2006  on  Community  strategic  guidelines  for  rural 
development. 

EN 

6 

   EN 

                                                 
•  Laying  down passive broadband  infrastructure (eg: civil engineering works such 
as ducts, and other network elements such as dark fibre etc), also in synergy with 
other infrastructures (energy, transport, water, sewerage networks, etc). 

It  would  be  channelled  through  measure  321  “Basic  services  for  the  economy  and  rural 
population”.  The  investment  would  complement  work  already  under  way  to  develop 
broadband  through  cohesion  policy,  building  on  work  already  under  way  in  several  rural 
areas. 

The Commission will set out further details of the policy opportunities for encouraging rural 
broadband  in  the  coming  weeks8.  This  initiative  will  also  go  hand  in  hand  with  a  new  EU 
broadband  strategy  designed  to  provide  a  framework  for  action  for  the  development  of 
broadband across the European Union. It will seek to build coordination between national and 
regional  authorities,  support  the  "pooling"  of  infrastructures  to  use  them  to  best  effect,  and 
exchange  best  practices9.  If  well  coordinated,  the  right  mix  of  rural  development, 
ICT/broadband  policy  and  structural  funds  can  avoid  duplication  and  can  generate  the 
leverage needed to make a real difference.  

Such  initiatives  need  to  be  compliant  with  the  State  aid  rules  of  the  Treaty.  State  aid  rules 
encourage  well-designed  public  interventions  that  are  the  best  placed  to  address  the  lack  or 
limited  affordable  broadband  availability  in  these  regions.  They  ensure  that  public 
interventions are well-justified and proportionate. 

Tackling future challenges  

The  "health  check"  of  implementation  of  the  Common  Agricultural  Policy  reform  of  2003 
identified  a  set  of  crucial  new  challenges  for  European  agriculture  -  climate  change, 
renewable  energies,  water  management,  biodiversity  and  dairy  restructuring.  In  November 
2008, Agriculture Ministers agreed to tackle these challenges with additional resources within 
their  rural  development  programmes,  under  the  rules  of  the  European  Agricultural  Fund  for 
Rural Development. However, this additional support is only foreseen from January 2010 and 
for some Member States only in 201310. 

Accelerating  this  work  would  bring  forward  investment  and  allow  work  to  start  on  these 
crucial strategic priorities. Starting this work in 2009 would be of particular benefit to the EU-
12. 

***** 

The investment set out in this Communication will make a major contribution to tackling the 
economic  crisis  and  making  Europe  stronger  and  more  competitive  for  the  future.  The 
Commission urges the European Parliament and the Council to give swift consideration to the 
proposals, and to adopt them as soon as possible.  

8 
9 

10 

In a Communication "Better access for rural areas to modern ICT" 
The European Broadband Portal www.broadband-europe.eu also acts as a tool for the exchange of best 
practices  and  for  the  publication  of  calls  for  tender  on  a  European  scale  and  can  provide  a  leverage 
effect to optimise the available budget. 
Not at all for Romania and Bulgaria. 

EN 

7 

   EN