Brussels, 29 May 2008
Responding to the grave difficulties currently faced by the European fisheries sector as a result of massively increased fuel costs, Fisheries Commissioner Joe Borg has renewed his call for the restructuring of the sector before it is too late. The difficulties faced by the EU fisheries sector have their roots in a structural mismatch between the size of the fleet and the sustainable level of fishing possibilities. These problems have been seriously compounded by the sharp increase of fuel prices over the past few years. Marine Fuel Prices have gone beyond 0.7€/l in most European harbours, an increase of around 240% since 2004.
"I am very aware of the acute difficulties that the European sector is currently facing, and have seen for myself the effects it is having on fishermen," said the Commissioner. "We must act now to restructure: I remain convinced that there is a future for European fisheries, but only if Member States, the sector and the Commission work together to create a smaller, more fuel-efficient fleet that is better matched to fishing possibilities. The Commission stands ready to work hand in hand with Member States and stakeholders to achieve this. Rapid rescue and restructuring aid is possible if it enhances fishing and fleet sustainability, and it can make a difference", added the Commissioner. "We are monitoring the situation very closely and looking for ways to work with the sector to overcome the serious problems they are now facing to better enable them to undertake the necessary restructuring. False solutions, however, cannot be the way forward. Higher quotas, as some have called for, would be completely counterproductive, serving only to further endanger the stocks that fishermen depend on. Fuel subsidies, besides being illegal, would do absolutely nothing to deal with the underlying problems. On the contrary, they would serve only to perpetuate the problems of the sector and make the crash even greater when it comes. Act now to restructure", declared Joe Borg, "but false solutions are not the way forward".
The Commission has been following these trends very closely, and already in 2006 made an analysis of the difficulties facing the fisheries sector. In March of that year it adopted a Communication on "improving the economic situation in the fishing industry" which laid down measures that could be taken by Member States to help their fishing sectors adapt to the higher fuel prices.
The Communication made it clear that operating aid or fuel subsidies were not an appropriate or permissible response to high fuel prices, given that oil prices were likely to stay at a high level.
However, the Commission has encouraged the Member States to adopt rescue and restructuring plans in order to help the adjustment of the segments of their fishing fleets particularly affected by the increase in oil prices, while addressing at the same time the structural causes of the difficulties – fleet overcapacity and fuel-inefficient equipment and practices.
Rescue aid, which should be limited to the minimum necessary, should be seen as a short-term aid to keep an ailing enterprise financially afloat for the time necessary to work out a restructuring or liquidation plan. Such rescue aid, which may last no more than six months, must take the form of a reimbursable loan or guarantee. However, where the rescue aid is followed by an approved restructuring plan, the rescue aid can be repaid with support received by the firm in the form of restructuring aid.
Further restructuring of fishing enterprises to restore economic viability will often imply investment to adapt fishing vessels. General rules on aid for such investment are set out in the relevant EU guidelines on State aid EU aid from the European Fisheries Fund (EFF) can also be mobilised to that effect, under the same conditions.
National aid for certain types of modernisation and equipment of vessels that is not normally allowed under the above conditions could also be considered if it is aimed at restructuring fishing enterprises as part of rescue and restructuring schemes authorised by the Commission (see point 4.1.2 of the guidelines on State aid to fisheries mentioned above). Upon notification of these schemes by Member States, the Commission will assess them on the basis of the relevant EU guidelines on State aid.
Provided that the rescue and restructuring plans are based on realistic assumptions and address the structural deficiencies of the fleets concerned by restoring a better match between capacity and fishing possibilities, they could in particular include support measures such as:
The Commission is closely following the evolving situation very closely so as to be able to respond as necessary. This includes a readiness to work with Member States to review EFF Operational Programmes to allow more targeted spending at this difficult time, and to effect an analysis of the fish supply chain to investigate price inflexibilities.