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IP/03/1177

Brussels, 27 August 2003

Solidarity Fund: Commission proposes EUR 31.6 million for fire-related emergency measures in Portugal

Responding swiftly to the request made by the Portuguese authorities, the European Commission today proposed to mobilise the European Union Solidarity Fund (EUSF) for a grant of € 31.655 million to deal with the fire-related disaster. This money will be used for reimbursing the cost of emergency measures such as rescue services, providing for temporary accommodation, energy and water and repairing basic infrastructure. The damages were caused by a large number of fires which started on 20 July and which have claimed 18 lives to date. It is estimated that 270,000 hectares of forest and 25,000 hectares of agricultural land have been destroyed. The disaster is reported to have caused the loss of goods, jobs and employment for about 45,000 persons.

Michel Barnier, Commissioner responsible for regional policy and the Solidarity Fund, conveyed his sympathy to all the citizens affected by the disaster and in particular to those who lost family members and friends. He said: “Today's decision expresses the Union's financial solidarity with the people of Portugal. It will serve to restore their infrastructure and to reimburse the costs of emergency measures. I will travel tomorrow to Portugal to visit several of the damaged areas.Commissioner Michaele Schreyer, responsible for the budget, added: “The Solidarity Fund is geared towards major disasters. The Commission's services were able to process the Portuguese application extremely rapidly. I call upon the Council and Parliament to take their decision with the same expediency in order to allow the funds to reach Portugal quickly.

This is the first “major disaster” requiring intervention by the Solidarity Fund this year. Payment from the fund will flow immediately after the approval by the Council and the European Parliament expected before mid-October and following the signature of the Portuguese Government and the European Commission. To enable a quick decision by Council and Parliament, the Commission has also adopted the corresponding proposal to mobilise the Solidarity Fund and a Provisional Draft Amending Budget (N°6/2003). The latter request does not cover payment appropriations, as the sum necessary can be found by redeployment within the sums already budgeted.

The EUSF is not designed to pay for the whole of the damages but only for costs related to emergency measures. For other repairs and also for prevention measures, structural and cohesion funds can be reallocated by the regional and national authorities in accordance with the regulations. In order to revive economic activities and to repair public infrastructure, Portugal already intends to reallocate €182 million of the EU Structural Funds. The cohesion fund could be used for rebuilding the transport infrastructure and developing environmental projects.

Calculation method

The total damage caused by the fires is estimated at about €1 billion. The amount of direct damage reaches € 946.5 million (0,864% of the Portuguese GNI) and the amount of EUSF eligible emergency measures is €79.6 million.

Direct damages

0,6% of Portuguese GNIEligible emergency measuresProposed EUSF contribution
€ 946.5 million€ 718 million€ 79.6 million€ 31.6 million

The proposed EUSF contribution amounts to 40% of the eligible emergency measures. Its calculation method is the following : 2.5% of the direct damages up to 0.6% of the GNI (i.e. € 17.953 million) and 6% of the damages above this level (i.e. € 13.702 million).

Background

Following the floods, which hit central Europe in August 2002, it was decided to create a new EU 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 can be made available through the EUSF per annum.

To qualify for aid under the Solidarity Fund, countries hit by a major disaster must provide a precise 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 and conditions, a region can also benefit from assistance from the fund. The Commission had already decided on 16 July to propose a grant of €56.25 million for Italy and Spain in respect of regional disasters resulting from the Molise earthquake, the Mount Etna eruption and the “Prestige” accident.

For more information please consult the following website:

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


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