Following a series of floods in Central Europe in 2002 the European Commission set up the European Union Solidarity Fund (EUSF). The aim of this fund is to provide financial assistance following major natural disasters and to demonstrate European solidarity to regions in European suffering from the impact of natural disasters. Since its establishment, the fund has been used to provide financial assistance following 52 disasters and different catastrophic events including floods, forest fires, earthquakes, storms and drought. Approximately 23 European countries have received financial support of over 3.2 billion euro under the fund.
To be eligible for financial assistance the country in question must already be an EU member state or must be engaged in accession negotiations. Financial support will be provided if the total direct damage caused by the natural disaster exceeds €3 billion at 2002 prices or 0.6% of the country's gross national income, whichever is the lowest.
Should a neighbouring Member State or accession country be affected by the same disaster as the country making the claim for financial support, it can also receive aid, even if the amount of damage cause by the disaster does not reach the eligibility threshold sets out under the fund. All applications relating to major disasters have been accepted to date.
The European Commission recently presented a proposal to reform the fund. Under the proposal the fund would be allowed to intervene in a more expedient manner in the future. The proposed reforms provide for the merging of certain aspects of the approval and implementation process. This would reduce the waiting time for financial assistance by months. In addition, the reformed fund would allow the affected country to claim up to 10% of the anticipated financial assistance in advance. The total financial aid that a country can receive is 30 million euro.
The Commission's proposal also aims to implement clearer eligibility thresholds. As mentioned above the fund in its current form provides financial support where the total direct damage caused by the natural disaster exceeds €3 billion at 2002 prices or 0.6% of the country's gross national income, whichever is the lowest. In general terms the fund does not provide financial assistance to regional disasters as there are no specific criteria defining what constitutes a regional disaster. However, support may be provided when such disasters occur once specific conditions have been met. This can only happen under exceptional conditions. To date, less than one third of applications in this exceptional category have been successful, despite the fact that the majority of disasters that occur are regional disasters. Under the Commission's proposal a new eligibility threshold relating to regional disasters would be introduced. Financial assistance may be provided where the damage caused by the disaster is the equivalent of 1.5% of the region's gross domestic product.
Despite the introduction of a new eligibility threshold appearing as a step in the right direction, the new threshold will have little impact in reality. Simulations have indicated that had this threshold been in place in the beginning it would have had little impact on the number of applications for financial support for regional disasters being approved. MEPs initial reaction to proposed eligibility threshold is that it is too high.
The Commission's proposal has not yet gone through the decision making procedure in the Parliament. The proposal will be decided under the co-decision process. This means the measure must be approved by both the Parliament and the Council before it can become EU law. In light of the Parliament's initially reaction to the proposed new eligibility threshold it may be expected that MEPs will seek a reductions to the 1.5% limit. However, before deciding on reducing eligibility thresholds, it is worth noting that the EUSF's budget will be reduced by half (from 1 billion euro per annum to 500million euro) from 2014 as a result of the cuts to the EU's 2014-2020 budget.