REPORT on the proposal for a decision of the European Parliament and of the Council on the mobilisation of the European Union Solidarity Fund to provide assistance to Croatia and Poland in relation to a natural disaster and to provide for the payment of advances to Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain in relation to a public health emergency

ANNEX: DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Union Solidarity Fund to provide assistance to Croatia and Poland in relation to a natural disaster and to provide for the payment of advances to Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain in relation to a public health emergency

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund[4], and in particular Article 4(3) thereof,

Having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters  and on sound financial management[5], and in particular point 11 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) The European Union Solidarity Fund ('the Fund') aims to enable the Union to respond in a rapid, efficient and flexible manner to emergency situations in order to show solidarity with the population of regions struck by major or regional natural disasters or a major public health emergency.

(2) The Fund is not to exceed a maximum annual amount of EUR 500 000 000 (2011 prices), as laid down in Article 10 of Council Regulation (EU, Euratom) No 1311/2013[6].

(3) On 10 June 2020, Croatia submitted an application to mobilise the Fund, following the earthquake in March 2020 that affected the city of Zagreb and the counties of Zagreb and Krapina-Zagorje.

(4) On 24 August 2020, Poland submitted an application to mobilise the Fund, following the floods in June 2020 in Podkarpackie Voivodeship.

(5) By 24 June 2020, Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain submitted applications to mobilise the Fund in relation  to the major public health emergency caused by the COVID-19 pandemic in early 2020. In their applications, all seven Member States requested the payment of an advance on the anticipated contribution from the Fund.

(6) The applications by Croatia and Poland in relation to the natural disasters meet the conditions for providing a financial contribution from the Fund, as laid down in Article 4 of Regulation (EC) No 2012/2002.

(7) The Fund should therefore be mobilised in order to provide a financial contribution to Croatia and Poland.

(8) To ensure the availability of sufficient budgetary resources in the general budget of the Union for 2020, the Fund should be mobilised for the payment of advances to Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain in relation to the major public health emergency.

(9) In order to minimise the time taken to mobilise the Fund, this Decision should apply from the date of its adoption,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the Union for the financial year 2020, the European Union Solidarity Fund shall be mobilised as follows in commitment and payment appropriations in relation to natural disasters:

(a)  the amount of EUR 683 740 523 shall be provided to Croatia;

(b)  the amount of EUR 7 071 280 shall be provided to Poland.

Article 2

For the general budget of the Union for the financial year 2020, the European Union Solidarity Fund shall be mobilised as follows in commitment and payment appropriations for the payment of advances in relation to a major public health emergency:

(a)  the amount of EUR 8 462 280 shall be provided to Croatia;

(b)  the amount of EUR 15 499 409 shall be provided to Germany;

(c)  the amount of EUR 4 535 700 shall be provided to Greece;

(d)  the amount of EUR 26 587 069 shall be provided to Hungary;

(e)  the amount of EUR 23 279 441 shall be provided to Ireland;

(f)  the amount of EUR 37 528 511 shall be provided to Portugal;

(g)  the amount of EUR 16 844 420 shall be provided to Spain.

Article 3

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union.

It shall apply from … [the date of its adoption].

Done at Brussels,

For the European Parliament For the Council

 

EXPLANATORY STATEMENT

The Commission proposes to mobilise the European Union Solidarity Fund (hereafter ‘the Fund’) to grant financial assistance for a global amount of EUR 823 548 633 relating to natural disasters that took place in Croatia and Poland in the course of 2020, as well as for paying advances to seven Member States (Croatia, Germany, Greece, Hungary, Ireland, Portugal, Spain) in response to the major public health emergency caused by the Covid-19 pandemic in early 2020.

Croatia - Earthquake

On 22 March 2020 an earthquake with a magnitude of 5,5 Richter scale affected the city of Zagreb and the counties of Zagreb and Krapina-Zagorje. It was the strongest earthquake to hit Zagreb since 1880. 27 people were injured and one died. The earthquake caused large structural damages to an estimated 26 000 buildings, both public and private, including hundreds of schools, 80 % of hospitals and large parts of the University of Zagreb. Major parts of the historic centre of Zagreb as well as several churches in the wider city area and the neighbouring counties were seriously damaged. The Croatian government provided subsidies for renting temporary accommodations to some 30 000 displaced persons.

In their application, received by the Commission on 10 June 2020 and updated on 28 and 31 July 2020, the Croatian authorities estimated the total direct damage at EUR 11,6 billion or 22,9 % of Croatia's GNI. This is well above the ‘major disaster’ threshold value for mobilising the EUSF of EUR 303,3 million (0,6 % of Croatia’s GNI in 2020). Thus, the disaster qualifies as a ‘major natural disaster’ and falls within the field of application of the Regulation.

Croatia estimated the total cost of eligible essential emergency and recovery operations, as defined under Article 3(2) of the Regulation, at EUR 2,27 billion, mostly for the restoration to working order of infrastructure, in particular educational and health infrastructure, and temporary accommodation.

In line with past practice in case of major natural disasters, the Commission proposes applying the rate of 2,5 % of total direct damage for eligible public expenditure up to the threshold, plus 6 % of the portion of expenditure in excess of the threshold. The total amount of assistance proposed is therefore EUR 683 740 523.

Croatia requested the payment of an advance as laid down in Article 4a of the Regulation. On 10 August 2020 the Commission awarded an advance equivalent to EUR 88 951 877 on the EU’s anticipated financial contribution.

 

Poland - Floods

Pluvial floods caused by violent storm fronts affected the entire Podkarpackie Voivodeship between 7 and 29 June 2020. More than 2000 residential, farming and public utility buildings were flash flooded, over 250 km of watercourse were destroyed or damaged and more than 400 people had to be evacuated. About 9000 hectares of crop area were damaged.

In their application of 24 August 2020, the Polish authorities presented damage estimates of EUR 282,9 million, corresponding to 1,56 % of the regional GDP. The region of Podkarpackie is a NUTS level 2 region. Thus, the application qualifies under the criteria for a ‘regional natural disaster’ as laid down in Article 2(3) of the Regulation. As the damage estimates are above the threshold for direct damage of 1,5 % of regional GDP, the application is eligible for an EUSF contribution.

The cost of emergency and recovery operations was estimated at EUR 216,2 million, with the largest shares for restoring the working order of transport infrastructure, securing preventive infrastructure and immediately restoring affected natural zones to avoid soil erosion.

In line with past practice, the Commission proposes applying the rate of 2,5 % of total direct damage for cases under the ‘regional disaster’ provision. The total amount of aid proposed is thus EUR 7 071 280.

Poland did not request the payment of an advance.

 

Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain - major public health emergency caused by the COVID-19 pandemic in early 2020

In 2020, as part of the Coronavirus Response Investment Initiative (CRII), the Regulation was amended in order to allow for Union action in response to major public health emergencies by including major public health emergencies.[7] The Covid-19 pandemic is a major public health emergency and therefore falls within the field of application of the EUSF.

By the deadline of 24 June 2020, the Commission received 22 applications (19 Member States and 3 accession countries[8]) for a financial contribution from the Fund relating to the COVID-19 pandemic. Seven requested the payment of an advance on the anticipated EUSF contribution (Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain) and were found to be eligible for this. The Regulation foresees the possibility of advance payments under the EUSF only for Member States.

Under Article 4a, paragraph 4, an advance of maximum 25% of the amount of the anticipated contribution and not above EUR 100 million may be paid.

The Commission applies the same method for determining aid amounts for major public health emergencies as for natural disasters. The Commission established total expenditure provisionally accepted for Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain relating to Covid-19 health emergency for the sole purpose of determining the advance payment as follows:

 

As the appropriations for advance payments initially available in the budget 2020 are already fully consumed, the Commission proposes the mobilisation of the necessary additional resources within the annual ceiling set out for the EUSF. The advance payment does not prejudge the results of the full assessment by the Commission. The amount of the advance will be taken into account prior to paying the balance of the contribution to the beneficiaries. The Commission should recover unduly paid advances.

Conclusion

For the reasons set out above, the disasters referred to in the applications submitted by Croatia and Poland, as well as the seven applications in relation to the Covid-19 pandemic meet the conditions set out in the Regulation.

The annual allocation available to the EUSF in 2020 is EUR 597 546 284 (i.e. EUR 500 million in 2011 prices). In addition, an amount of EUR 552 977 761 of the 2019 allocation was not used by the end of that year and carried over to 2020. In accordance with Article 10(1) of the MFF Regulation, 25% of the original 2020 allocation (EUR 149 386 571) needs to be retained until 1 October 2020, but becomes available as of that date. Therefore, the maximum amount available under the Solidarity Fund for the full year 2020 is EUR 1 150 524 045.

The EUSF has already been mobilised in 2020 for four applications (Portugal, Spain, Italy, Austria) [9] for a total amount of EUR 278 993 814. Thus, the maximum amount available under the EUSF at this point in 2020 is EUR 871 530 231, which is enough to cover the needs under this Mobilisation Decision as outlined above (i.e. EUR 823 548 633, of which EUR 683 740 523 related to the earthquake in Croatia, EUR 7 071 280 related to the floods in Poland and EUR 132 736 830 for advance payments).The remaining amount of EUR 47 981 598 will not be used in 2020 and will be carried over to 2021.

 

 

The Rapporteur recommends the swift approval of the Commission proposal for a decision annexed to this report, leading to the rapid mobilisation of the aforementioned amounts, as a sign of European solidarity with all Member States concerned. The rapporteur urges that this financial contribution should be delivered with particular urgency to the Member States.

 

LETTER OF THE COMMITTEE ON REGIONAL DEVELOPMENT

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion on the mobilisation of the European Union Solidarity Fund to provide assistance to Croatia and Poland in relation to a natural disaster and to provide for the payment of advances to Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain in relation to a public health emergency (COM(2020)0960 – C9‑0318/2020 – 2020/0299(BUD))

Dear Mr Chair,

A Commission proposal for a decision of the European Parliament and of the Council on the mobilisation of the European Union Solidarity Fund (EUSF) to provide assistance to Croatia and Poland in relation to a natural disaster and to provide for the payment of advances to Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain in relation to a public health emergency (COM(2020)0960) has been referred for opinion to the Committee on Regional Development. You will soon adopt a report on this proposal in the Committee on Budgets.

This proposal would mobilise the EUSF for an amount of EUR 823 548 633 to provide assistance to:

• Croatia in relation to the earthquake that affected the city of Zagreb and the counties of Zagreb and Krapina-Zagorje in March 2020 (EUR 683 740 523);

• Poland in relation to the floods in Podkarpackie Voivodeship in June 2020 (EUR 7 071 280); and

• Seven Member States (Croatia, Germany, Greece, Hungary, Ireland, Portugal and Spain) in relation to advance payments in response to the major public health emergency caused by the COVID-19 pandemic in early 2020 (EUR 132 736 830).

 

The rules applicable to financial contributions from the EUSF are laid down in Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund.

This is the first mobilisation of the EUSF in the context of a major public health emergency, following the changes brought in by Regulation (EU) 2020/461 of the European Parliament and of the Council of 30 March 2020 amending Council Regulation (EC) No 2012/2002 in order to provide financial assistance to Member States and to countries negotiating their accession to the Union that are seriously affected by a major public health emergency. In relation to the COVID-19 pandemic, this mobilisation only concerns those Member States which requested an advance; the requests for mobilisation from other Member States and candidate countries will be considered at a later date.

The committee coordinators have assessed this proposal, and asked me to write to you reporting that the majority of this committee has no objection to this mobilisation of the EUSF to allocate the above-mentioned amounts as proposed by the Commission.

Yours sincerely,

Younous Omarjee

 

 

 

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

 

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

 

 

 

Key to symbols:

+ : in favour

- : against

0 : abstention