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IP/09/1185

Brussels, 23 July 2009

The Commission proposes granting 494 million euros to Italy to help cope with the aftermath of the Abruzzo earthquake

The European Commissioner for Regional Policy, Paweł Samecki , confirmed today the Commission's proposal to grant 493.7 million euros to Italy to help cope with the aftermath of the Abruzzi earthquake last April.

Mr Samecki, responsible for the Solidarity Fund, said that: " This is the greatest disaster for which the help of the EU's Solidarity Fund has been solicited since its creation in 2002. The scale of the earthquake, whose consequences continue to be borne by the local population, justifies commensurate support from the EU. Moreover, together with the Italian authorities, we have sought to exploit all the opportunities offered by the Cohesion Policy in order to act urgently and prepare for the future."

Substantial damage

The earthquake of 6 April 2009 caused substantial damage to property and resulted in 300 deaths and injuries to 1 500 people. All of the province of L'Aquila and most of the Abruzzo region were hit, as were neighbouring regions. The historic centre of the city of L'Aquila is still closed off. Thousands of people were made homeless, and tens of thousands are still living under canvas or are housed temporarily on the Adriatic coast. Twenty thousand people were forced to move outside the region. The disaster has also had a drastic impact on the regional economy, with the cessation of most activities.

Activation of the European Union's Solidarity Fund

On 8 June, the Italian authorities applied to the EU's Solidarity Fund for aid. The Solidarity Fund can only intervene in principle when a particular threshold is reached, 3.4 billion euros of damage in Italy's case. The damage caused directly by the earthquake has been put at 10.2 billion euros.

In order to release the grant, the Commission will ask the budget authority (the European Parliament and the Council of the European Union) to adopt an amending budget to be incorporated into the Community budget.

This European Union aid will help to meet the cost of urgent measures taken by the Italian authorities: provision of temporary housing, the repair of essential infrastructure (power stations, water distribution networks, roads) and clearing of rubble and devastated villages. The aid will not be used to provide compensation for damage to private property.

Other resources available

The Abruzzo Regional Programme, allocated 140 million euros from the European Regional Development Fund –(ERDF) in 2007-2013 has been amended so that some of the aid can be channelled towards reconstruction (see MEMO/08/447 ). Some 83 million euros should thus be earmarked for long-term measures, as the reconstruction could take at least ten years. The Structural Funds will support:

  • Resumption of economic activities : help for small and medium-sized enterprises (SMEs) in all sectors: reconstruction of buildings, plant, partial compensation for stocks destroyed;

  • Renovation of public buildings in L'Aquila : infrastructure, reconstruction of cultural heritage, etc.

  • Social cohesion and activities for the benefit of young people : in the context of urban development, support will be given to sporting and cultural associations in order to keep their activities going and hang on to the 27 000 students whose presence is an important economic factor for the region;

  • Promotion of tourism in mountain areas to give a boost to the local economy.

Furthermore, as an exception, the deadline for making payment applications to the Commission from the previous programme for Abruzzo for the period 2000-2006 has been extended from 30 June 2009 to 30 June 2010. This will give the region more flexibility to use every last euro of the ERDF allocation totalling 193 million euros ( IP/09/738 ).

Note to publishers

Created in 2002, the European Union Solidarity Fund (EUSF) provides emergency aid to Member States and countries negotiating their accession if they are hit by major natural disasters. Its annual allocation is one billion euros.

Italy benefited from aid from the Solidarity Fund in similar circumstances following the series of earthquakes in Molise and Apulia in 2002, with 30.8 million euros granted to the Italian authorities.

For more information:

http://ec.europa.eu/regional_policy/funds/solidar/solid_en.htm

Annex : general background on EU Solidarity Fund (see also MEMO/05/111 )

Annex

General BACKGROUND

Brussels, June 2009

The European Union Solidarity Fund (EUSF)

1. The current EUSF

Background: The EUSF was created as a reaction to the severe floods in Central Europe in the summer of 2002. The EUSF regulation 1 entered into force on 15 November 2002. Member States and countries negotiating accession can request financial aid in the event of a major natural disaster.

Characteristics: The EUSF is a relatively simple instrument in administrative terms. It’s principle characteristics are as follows:

  • In the case of a “ major disaster” it there is only one single eligibility criterion (damage in excess of a threshold).

  • Only exceptionally the Fund can intervene for smaller, so-called “ extraordinary regional disasters” in which case three specific criteria must be fulfilled.

  • The grant is paid upfront as a single instalment and there is no programming requirement.

  • As the EUSF financing is outside the normal EU budget, the Commission cannot decide on financial assistance alone, it has to propose to the budgetary authority (Council and European Parliament) to mobilise the Fund. The aid can only be paid once the money has been made available following a budgetary procedure.

  • The EUSF is very efficient as a refinancing instrument for emergency operations following a disaster. Once the grant is paid out, it can re-finance emergency measures from day one of the disaster.

  • The instrument is sometimes misunderstood as a rapid response instrument, for which it was not conceived.

Assistance: The EUSF provides financial aid for emergency measures in the event of a major natural disaster (i.e. direct damage above € 3.4 billion (at 2009 prices) or 0.6% of the gross national income of the affected country, whichever is the lower). Exceptionally, it can be mobilised even if the threshold is not met: 1) for a neighbouring State that is affected by the same major disaster; 2) for extraordinary regional disasters affecting the majority of the population of a region and having serious and lasting effects on its economic stability and living conditions. In principle payments from the Fund are limited to finance emergency operations undertaken by the public authorities alleviating non insurable damages (such as rescue services, putting infrastructures back in operation, provisional accommodation, cleaning up etc). Private damage and income losses, including in agriculture, may not be compensated.

Annual budget: The Commission decides the amount of any aid and proposes its mobilisation to the budgetary authority. The maximum annual budget that can be mobilised is € 1 billion per year. However, the actual amount mobilised varies from year to year, depending on the occurrence of disasters (2002: EUR 728 m; 2003: EUR 107.1 m; 2004: EUR 19.6 m, 2005: EUR 205 m, 2006: EUR 2 m, 2007: EUR 445 m, 2008: EUR 19 m). The amount available annually for extraordinary regional disasters is limited to 7.5% of the EUSF's annual budget (€ 75 million).

Aid amount: A country affected by a disaster receives a lower rate of aid of 2.5% for the part of the damage below the threshold of 0.6% of GNI or € 3.4 billion and a higher share of aid of 6% for the part of the damage exceeding the threshold. This ensures that for the same amount of damage relatively poorer countries would receive more aid in absolute terms than richer ones.

Procedure: The national authorities of the affected country may submit an application to the Commission no later than 10 weeks after the first damage (the Commission cannot take the initiative). The Commission then assesses the application and decides whether to activate the EUSF together with the amount of any aid considered appropriate and proposes its mobilisation to the budgetary authority. The aid is paid out in a single instalment after the signing of an implementation agreement with beneficiary State.

Results: Since 2002, the Commission has received 57 applications for financial assistance from the Fund of which 23, mostly for major disasters, led to the granting of financial support totalling more than one billion Euros (as of 7 December 2007).

2. Proposal for a revised EUSF Regulation

In April 2005, the Commission presented to Parliament and the Council its proposal for a revised Solidarity Fund Regulation whose key elements are:

  • an enlarged scope, to enable the Community to react to disasters other than of natural origin,

  • provision for advance payments, to accelerate the rate of response and the visibility of Union support

  • simplification, by introducing clearer criteria for the activation of the Fund (lowering of the major disaster threshold while abandoning the exceptional criteria).

The proposal was very favourably received by the European Parliament but remains blocked in the Council. However, for the time being, the Commission will not to withdraw its proposal which, in the event of a change of the political climate, could be re-animated quickly.

1 :

Council Regulation (EC) N° 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund


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