COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-12-07
Institutions: European Commission
Subjects: Denmark, EU financial instrument, Greenland, bilateral relations, cooperation in the field of education, economic situation, sustainable development

EUROPEAN COMMISSION 

Brussels, 7.12.2011 
SEC(2011) 1485 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

COUNCIL DECISION 

on relations between the European Union on the one hand, and Greenland 
and the Kingdom of Denmark on the other 

and covering the subsequent implementing regulation of the 
Decision on relations between the European Union on the one hand, and Greenland 
and the Kingdom of Denmark on the other 

{COM(2011) 846 final} 
{SEC(2011) 1484 final} 

 
 
 
 
  
 
 
1. 

PROBLEM DEFINITION 

The Council Decision 2006/526/EC defines the framework for cooperation between the 
parties  in  sectors  other  than  fisheries,  for  the  period  2007-2013.  This  stipulates  that 
assistance  towards  Greenland  should  focus  on  areas  such  as  (a)  education  and  training; 
(b)  mineral  resources;  (c)  energy;  (d)  tourism  and  culture;  (e)  research;  (f)  food  safety. 
The  focal  sector  for  cooperation  defined  under  the  current  financial  framework  is 
education  and  vocational  training.  The  policy  dialogue  between  the  parties  is  not 
limited  to  education  and  vocational  training  but  also  covers  the  overall  socio  economic 
situation. 

Greenland is a country bigger in size than Europe with 56,000 inhabitants spread over 18 
towns none of which exceeds 16.000 inhabitants. Due to the geostrategic importance of 
Greenland both as a partner of the EU and as a member of the Arctic Council it remains 
important to extend the long lasting commitment to the partnership. 

Greenland is confronted with specific economic and social structural problems: (a) high 
level of imports; (b) exports are highly reliant on the fisheries sector; (c) the fiscal deficit 
of  the  Government  of  Greenland  that,  without  the  grants  from  Denmark  and  the  EU, 
would  exceed  30%  of  GDP  annually.  Besides  the  fact  that  the  EU-Greenland 
partnership expires at the end of 2013, the reason for reform of the current partnership 
stems  from  the  challenges  that  both  Greenland  and  the  EU  face.  These  include  among 
others  the  emergence  of  global  issues  (e.g.  increasing  impact  of  climate  change  on 
human activity and the environment, maritime transport, research and innovation).  

The need to address the multifaceted new challenges and opportunities requires that the 
Greenlandic administration enhances skills and capacities in order for the country to be 
able  to  define  and  implement  policies  and  strategies.  Currently  Greenland  is  highly 
dependent  on  Danish  policy  officers  as  well  as  on  short  term  employees  from  other 
Nordic countries. 

Finally 
the  Greenlandic  ICT  (Information  and  Communication  Technology), 
including  information  systems,  need  further  improvement  in  order  to  provide  timely 
and accurate data in relation with the sector policies as well as with the macro economic 
developments. 

2. 

ANALYSIS OF SUBSIDIARITY 

In a globalised environment, different internal EU policies (climate change, environment, 
Arctic  policy,  energy,  migration,  raw  materials,  innovation  etc.)  are  increasingly 
becoming part of the EU's external action, and in line with the EU 2020 agenda and the 
Treaty for the Functioning of the European Union, a mutual reinforcement of internal and 
external actions is needed. 

As an Arctic country Greenland is furthermore among countries most exposed to climate 
change. The capacity to deal with this challenge will have profound implications on its 

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economic  well  being.  The  EU  should  actively  share  its  domestic  experience  in 
development  of  measures  and  policies  to  assist  Greenland  with  both  adaptation  and 
mitigation aspects of climate change. 

3. 

OBJECTIVES OF EU INITIATIVE  

In the context of the new partnership, dialogue between Greenland and the EU should be 
extended to other areas. Global issues such as climate change and environment, maritime 
transport,  research  and  innovation,  require  global  responses,  where  the  geostrategic 
position of Greenland should be noted and where cooperation between the parties should 
be considered in the interest of the EU. 

The  structural  weaknesses,  with  which  Greenland  is  confronted,  require  an  increased 
commitment  from  the  national  authorities  to  formulate  and  implement  the  needed 
policies.  Those  policies  should  lead  to  structural  changes  and  measurable  impacts, 
permitting  diversification  of  the  economy  and  a  transition  to  a  long  term  sustainable 
society.  The  EU  should  assist  Greenland  in  the  formulation  of  the  relevant  policies 
with the provision of expertise along with a more targeted dialogue covering the areas of 
cooperation agreed upon by the parties (e.g. education, natural resources, including raw 
materials, Arctic issues, etc.). 

4. 

POLICY OPTIONS  

Option 0: 'Zero option' – no financial instrument for and EU/Greenland partnership. 

Option 1: Maintaining the status quo in the EU/Greenland partnership  

The  2007-2013  EU/Greenland  partnership  aims  to  be  a  comprehensive  partnership, 
answering the need agreed between the parties to broaden and strengthen future relations 
between  the  EU  and  Greenland  taking  into  account  the  importance  of  fisheries  and  the 
structural development problems in Greenland. 

Option 2: Maintain the current structure of the EU/Greenland partnership but amending 
it to better respond to an enhanced partnership 

The scope of the partnership is extended to cover inter alia the following topics: Arctic 
issues,  climate  change,  environment  and  biodiversity.  The  dialogue  should  also  be 
extended to integrate food security issues, energy storage and the needs of research and 
innovation  capacity.  The  broadening  of  cooperation  to  new  areas  such  as  climate 
change, safe and sustainable energy (including energy, research and innovation), as well 
as  a  strengthened  cooperation  on  natural  resources,  including  raw  materials,  are  of 
immense  importance  for  the  EU  industries  and  for  the  sustainable  development  of  the 
Greenlandic  economy.  These  areas  are  of  growing  importance  to  the  EU  and  should 
deserve  full  attention  from  both  parties.  As  to  the  scope  of  financing,  consideration 
should be given to the possibility of providing technical expertise, which would facilitate 
capacity  building  and  allow  for  the  Greenlandic  administration  to  acquire  skills  where 
needed the most. 

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Option 3: New instrument 

This option and its impacts were not analysed in detail. 

5. 

ASSESSMENT OF IMPACTS 

(a) Option 0 – 'Zero option' 

Economic, social and environmental impact 

Within  the  current  partnership  the  cancellation  of  support  for  the  Greenland  Education 
Programme will have a negative impact on the progress made. Without the assistance to 
the Greenland Education Programme the impact of better education will be insufficient in 
the sustainable development of Greenland, with negative influence on other issues such 
as environmental awareness. 

(b) Option 1: 'Status quo' or 'no change' 

Economic, social and environmental impact 

The  likely  continuation  of  the  support  to  education  and  vocational  training  during  the 
period  2014-2020,  is  expected  to  produce  continued  results  and  contribute  to  the 
development of the overall economy of Greenland. 

Taking into account the diversification needs of the Greenlandic economy, education will 
have a positive impact on the economy through the provision of a labour force that will 
have the adequate skills for confronting the challenges inherent to the transition from a 
primarily  fisheries  driven, to a more diversified economy. More  and better education is 
expected  to  have  a  medium-  to  long-term  positive  impact  on  the  Greenlandic  society. 
Improved  knowledge  and  awareness  of  issues  such  as  health  issues  and  environment  is 
likely to increase following improved competencies development and better education. 

(c) Option 2 – Enhanced EU/Greenland Partnership 

Economic, social and environmental impact: 

The extension of the partnership between the EU and Greenland to cover other areas of 
interest,  such  as  'climate  change  research',  'environment',  biodiversity',  'Arctic  issues', 
'natural  resources,  including  raw  materials',  will  facilitate  the  preparedness  of  the 
Greenland  to  formulate  and  implement  the  required  in  these  areas  and  will  lead  to  a 
positive  economic  impact  with  better  skilled  labour  force  and  a  more  diversified 
economy. 

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6. 

COMPARISON OF OPTIONS  

The table below summarizes the pros and cons of different options. 

Impacts 

0. - No Instrument 

1. - No change from today's situation

2. - A revised Instrument 

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On  the  basis  of  the  above  analysis,  option  2  is  the  preferred  option.  An  enhanced 
partnership would recognise the geostrategic importance of Greenland in the Arctic, the 
changes  in  its  economy  and  the  environment  resulting  from  climate  change,  and  will 
honour  the  commitment  of  maintaining  a  long  lasting  relationship  between  the  EU  and 
this country. 

7. 

MONITORING AND EVALUATION 

In the context  of  the existing partnership, a set of indicators have been agreed between 
the parties that will permit the follow up of the overall developments in the Greenlandic 
economy and society. In regards to the new and enhanced EU/Greenland partnership an 
indicative  list  of  indicators  is  foreseen  in  chapter  7.1  of  the  Impact  Assessment  report. 
Additional  indicators  might  prove  necessary  to  better  account  for  the  new  areas  of 
cooperation. This matter will be further discussed with the Greenlandic authorities. 

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