In cases of major natural disasters, the European Union Solidarity Fund can finance part of the emergency operations. The Parliament and the Council are now deciding on aid of €670 million for the Italian region of Emilia-Romagna, hit by two severe earthquakes in May this year. A debate on the future of the Fund is also ongoing.
When natural or man-made disaster strikes, individual Member States (MS) are responsible for crisis management. Over time, major incidents have led MS to develop a series of cooperation measures at EU level in different policy areas.
The European Union Solidarity Fund (EUSF) is an instrument financing operations in the field of civil protection. The EU created it in 2002 after heavy floods had hit Central Europe.
In the event of a major natural disaster, the Fund means that the EU can provide financial aid. It is outside the ceilings of the Multiannual Financial Framework (MFF), belonging to the Flexibility instruments of the EU Budget.
How the EUSF works
Council Regulation (EC) 2012/2002 lays down the rules for the EUSF. The Fund, which is not a rapid-response mechanism, covers part of the costs incurred by the stricken country in carrying out emergency operations in the aftermath of a natural disaster. It can be seen as an instrument to reimburse these costs.
The EUSF focuses on major disasters, whose damages surpass either €3 billion in 2002 prices (€3.606 billion in 2012) or 0.6% of the affected country’s gross national income. To a lesser extent, it can address disasters that do not meet this criterion if they have a lasting impact on the conditions of a given region and involve the majority of its population (regional disasters category). Exceptionally, neighbouring countries hit by a disaster which qualifies as “major” for another State can benefit from the Fund as well.
Both MS and countries negotiating accession to the EU can ask for assistance from the EUSF. They must apply to the European Commission within ten weeks of the first damage caused by the disaster.
If the conditions for mobilising the Fund are met, the Commission makes a funding proposal to the European Parliament and the Council. As the EUSF is financed outside the MFF, a decision by the budgetary authority and an amending budget are needed in order for the aid to be granted.
Once the Parliament and the Council approve the proposal, the Commission concludes an implementing agreement with the beneficiary State and pays the grant. Reporting and monitoring tools are foreseen.
An Inter Institutional Agreement (IIA) sets the annual budget of the Fund at €1 billion in the 2007-13 period, on top of the MFF ceilings. The total assistance for regional disasters cannot exceed 7.5% of this amount. Any part of the €1 billion which is not used in a given year cannot be transferred to the following year’s ceiling.
Payments can finance emergency operations carried out from the first day of the disaster in relation to non-insurable damages. These include: repairs to key infrastructure; rescue services; temporary accommodation; protection of cultural heritage.
2002-2011: an overview
From the creation of the Fund up until the end of 2011, the Commission had received 89 requests for aid, of which 48 were approved. 22 MS and one country negotiating accession have benefitted from the EUSF. The total aid granted amounted to almost €2.5 billion.
The number of applications in a given year has ranged from two in 2008 to 19 in 2007. Significant variation is also found in the amount of aid disbursed. This can be as low as €19.4 million for 2008 requests and as high as €728 million in 2002, when floods struck Austria, the Czech Republic, Germany and France. The unforeseeable nature and scale of the events for which the Fund can be used clearly explain these differences.
In general, requests related to major disasters – the Fund’s main objective – are successful. However, the category of regional disasters registers a high number of rejections. The Commission deems the definition of this category in the legal text to be vague. This results in burdensome procedures both to submit and to assess requests, with many not qualifying in the end.
In 2008, the Court of Auditors analysed the functioning of the Fund in its first years of existence. It concluded that the Fund met its goal of demonstrating solidarity with countries hit by a disaster. The main criticism of the Court concerned the average time needed to grant aid, which was twelve months. It also noted the issues with the category of regional disasters.
Two earthquakes struck the region of Emilia-Romagna (northern Italy) in May 2012. They claimed 27 lives and made 43 000 people homeless. In addition, they caused extensive damages to infrastructure and cultural heritage. The Italian authorities reported damages of over €13 billion, well above the intervention threshold for the country.
After examining Italy’s request, the Commission submitted a draft decision and an amending budget to grant aid of €670 million by increasing payment appropriations. This figure is around 5% of the reported damages. It is calculated by applying a 2.5% rate to the amount under the intervention threshold and a 6% rate above, in order that the aid is progressive. The European Parliament and the Council are currently discussing the Commission’s proposal, which would be the highest amount of aid to be disbursed under the EUSF to date.
The future of the EUSF
A revision of the Fund rules should have taken place by 2006. To this end, the Commission put forward a proposal in 2005 with a view to broadening its scope to include man-made disasters and other major emergencies. In addition, the proposal aimed to improve the functioning of the EUSF. The European Parliament generally supported it, but added a series of amendments. However, the text attracted criticism in the Council due to its potential budgetary implications.
With such widespread opposition within the Council, the Commission withdrew its proposal in a 2011 Communication that outlined possible improvements to the EUSF’s functioning.
Tools to address some weaknesses in the current rules include: a clear definition of the scope limited to natural disasters; one single quantitative criterion for regional disasters; a provision for disasters which unfold slowly such as droughts; and closer linking of the Fund to disaster-prevention activities.
In the Commission’s view, these measures would increase the transparency of the criteria used for mobilising the EUSF. This clarity could reduce the disappointments that requesters have often experienced in the category of regional disasters. In addition, other adjustments such as paying advances and merging two administrative steps would allow faster payments within the limits of the current rules. The EP’s Regional Development Committee (rapporteur Rosa Estaràs Ferragut, EPP, Spain) is preparing a resolution on which the Plenary is expected to vote in January.
As regards the annual budget of the EUSF, the Commission kept it outside the MFF at €1 billion (2011 prices) in its proposals for the MFF 2014-2020 and the new IIA. The Council is considering a Presidency proposal to reduce this amount by 25% or more in the context of the MFF negotiations.
In a wider perspective, the Lisbon Treaty introduced a Solidarity Clause (Article 222 TFEU). Once implemented, this would encompass all relevant instruments, including the EUSF.