European Commission proposes EUR 8.6 million for Spanish regions hit by "Prestige" disaster

July 22, 2003 -- The European Commission has decided to seek the agreement of the Council and the Parliament to mobilise the European Union Solidarity Fund (EUSF) for granting emergency aid of € 8.6 million to Spain.

The grant is proposed to be used primarily for reimbursing the cost of the emergency clean up measures following the disaster caused by the sinking of the "Prestige", which is affecting the coastal areas of the four northern autonomous regions of Spain (Galicia, Asturias, Cantabria and the Basque Country) including some islands off the Atlantic coast and the estuaries of the Spanish rivers leading into the Atlantic sea.

Michel Barnier, Commissioner responsible for regional policy and the Solidarity Fund, said: "This decision is an expression of the Union's solidarity with Spain by helping the affected regions to restore their coastline and to contribute to financing emergency measures. Additional amounts can be made available under existing structural and cohesion funds. Their contribution could reach over €400 Mio including an amount from INTERREG thereby helping to address the longterm consequences of the disaster".

Commissioner Michaele Schreyer, responsible for the budget, added: "The Commission also proposes today the amending budget corresponding to this proposal. We trust that the Council and European Parliament support this, so that Spain rapidly receives the 8.6 mio from the new Solidarity fund."

Mobilising the Solidarity Fund for the Prestige disaster is only possible on the basis of exceptional provisions as damages did not reach the regulatory threshold of € 3 billion.

On 13 November 2002, the "Prestige", a 26-year- old tanker carrying 77,000 tons of heavy oil was damaged in a storm and sank on 19 November 2002. Since then, major pollution has affected a great number of beaches and coastal waters in the region with disastrous effects on fishing, aquaculture and tourism. A particular circumstance of the "Prestige" disaster is the uncertainty of knowing when the pollution will effectively stop as a permanent solution to neutralise the wreck is still not in place.

The oil spill is causing major damage to the natural environment and the Spanish authorities estimate that over 330,000 people depending on fisheries and related sectors including family members - are estimated to be directly affected by the disaster through loss of occupation or income. In tourism the number exceeds 550,000 people. In total, the Spanish authorities expect over 885,000 people to be affected by the disaster with economic losses in both sectors taken together amounting to over € 1.2 billion over the next two years.

Payments from the fund could flow immediately after the approval by the Council and the European Parliament of the necessary budgetary appropriations and following conclusion of an agreement between the European Commission and the Spanish Government on how the aid should be used.

To enable a quick decision by Council and Parliament, the Commission has adopted today the corresponding proposal to mobilise the Solidarity Fund and a Provisional Draft Amending Budget. The latter request does not cover payment appropriations, the sum necessary can be found by redeployment within the sums already budgeted. The proposal will be presented by Commissioner Schreyer to the ECOFIN/ budget meeting on 16 July 2003.

Background

Following the floods, which hit central Europe in August 2002, it was decided to create a new European instrument for granting emergency aid to the Member States and applicant countries in the event of a major disaster. Based on Commission proposals for a Council Regulation establishing a European Union Solidarity Fund (EUSF) and an inter-institutional agreement between the European Parliament, the Council and the Commission, the legal and budgetary instruments were decided in November 2002. A maximum of € 1 billion per annum can be made available through the EUSF.

To qualify for aid under the Solidarity Fund, countries hit by a major disaster must provide an estimate of the damage and meet specific criteria, ensuring that EU funds are used to meet the most urgent needs. A "major disaster" is an event causing damage estimated at over € 3 billion or more than 0.6% of the gross national income of the state concerned.

Under exceptional circumstances a region can also benefit from assistance from the fund where it has been affected by an extraordinary disaster affecting the major part of its population with serious lasting repercussions on living conditions and the economic stability of the region. Particular focus will be on remote or isolated regions, such as the outermost regions.

The total annual budget available for regional disasters is 75 million, of which a maximum of 75% or 56,250 million € can be granted before 1 October. In line with the degree of support awarded last year, the proposed rate of assistance is 2,5% of total direct damage. However, the application of this rate would lead to an amount in excess of the financial constraint. Consequently, the Commission proposes that the aid per application be capped proportionally so that, globally, 56,250 million € is arrived at. The individual sums are 8,6 million for Prestige, 30,8 million for Molise and 16,8 million for Sicily.

Community financial assistance expected to total around €400 million from other sources, i.e. the Structural Funds and the Cohesion Fund, will also be provided to give a compensation package covering the full range of the damage caused by the disaster (€170 million from the ERDF including a sum under the Interreg Initiative for the purpose of a permanent solution to neutralisation of the wreck, €10.1 million from the ESF, €91.1 million from the Cohesion Fund and up to €140 million from the FIFG).

Lastly, compensation from the International Oil Pollution Compensation Fund is expected to amount to about €150 million for all the damage caused to the EU countries. Cover of the eligible damage from these amounts paid out in compensation should work out at between €50 million and €64 million. The Union, acting on a proposal from the Commission, has also obtained an international agreement that in future will permit multiplication by five of the present compensation, bringing it to around €910 million.

For more information please consult the following web site:

http://europa.eu.int/scadplus/leg/en/lvb/g24217.htm