EUROPEAN COMMISSION

Brussels, 17.12.2015

COM(2015) 662 final

REPORT FROM THE COMMISSION

EIGHT ANNUAL REPORT ON THE IMPLEMENTATION OF THE EUROPEAN FISHERIES FUND (2014)

{SWD(2015) 295 final}

Table of Contents

1.INTRODUCTION

2.OVERALL ASSESSMENT OF EFF IMPLEMENTATION

2.1.Financial implementation of the EFF by the Member States

2.2.Main areas of intervention for the EFF

2.3.Evolution per priority axis

2.4.Budget implementation by the Commission

2.5.Use of technical assistance by the Member States

2.6.Use of technical assistance by the Commission

2.7.Coordination of the EFF with the Structural Funds and the European Agricultural Fund for Rural Development (EAFRD)

2.8.Irregularities reported by Member States

3.ASSESSMENT OF EFF IMPLEMENTATION PER AXIS

3.1.Axis 1. Measures for the adaptation of the community fishing fleet.

3.1.1.Economic performance of EU fishing fleet in 2013 (based on 2015 Annual Economic Report)

3.1.2.Permanent cessation of fishing activities.

3.1.3.Temporary cessation of fishing operations

3.1.4.Investments on board fishing vessels and selectivity

3.1.5.Small-scale coastal fishing

3.1.6.Socio-economic compensation for the management of the fishing fleet.

3.2.Axis 2. Aquaculture, inland fishing, processing and marketing of fishery and aquaculture products.

3.2.1.Inland fisheries

3.2.2.Aquaculture

3.2.3.Processing

3.3.Axis 3. Measures of common interest.

3.3.1.Fishing ports, landing sites and shelters

3.3.2.Development of new markets and promotional campaigns

3.3.3.Pilot operations.

3.4.Axis 4. Sustainable development of fishery areas.

4.First set of operational conclusions on the EFF for the period 2007-2013

1.INTRODUCTION

In line with Article 68 of the European Fisheries Fund (EFF) Regulation 1 , by 31 December each year the Commission must forward to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions a report on how the EFF is being implemented. The report is based on an examination and assessment by the Commission of the Member States’ annual reports and on any other available information. It also includes an analysis of the implementation of some key EFF measures.

The accompanying Commission staff working document includes a summary of EFF implementation in each Member State as well as five tables with detailed information on financial execution 2 . This last Commission report presents an overall assessment of EFF implementation by the Member States and by the Commission during 2014. Data on commitments provided by Member States were sufficient for a more extensive analysis up until 31 May 2015, thus providing a more comprehensive picture of the current implementation of the EFF less than one year before the deadline for EFF implementation on the ground (31 December 2015). Since MS, pursuant to Delegated Regulation 2015/895 3 do not have to submit in 2016 annual reports on the implementation of the operational programme during 2015, the Commission will not present an annual report on EFF implementation during that year.

However, it will include the summary of the audits on management and control systems set up by the Member States and on EFF assistance required under letter d) of Article 68(3) of  the EFF regulation  as an annex to the ‘2016 summary report in relation to the ESI funds programmes’ foreseen under Article 53 of the Common Provisions Regulation 4 .

2.OVERALL ASSESSMENT OF EFF IMPLEMENTATION

2.1.Financial implementation of the EFF by the Member States

Certified interim payments sent by Member States in 2014 totalled EUR 567 million, which represents a 4% increase if compared with the same figure for 2013 (EUR 544 million).

From 2007 to 31 May 2015, EFF commitments by the Member States amounted to EUR 3.91 billion. This represents an increase of 14.5 % of EFF commitments over 31 May 2014 (EUR 495 million in one year), when the level of commitments was still relatively low. By 31st May 2015, 90.83% of the EFF had been committed 5 .

Both commitments and certified expenditure at the level of the Member States are still below the level expected before the end of EFF implementation. By 31 May 2015, over 9% of the EFF allocation (some EUR 394 million) had not been committed yet, pointing to an urgent need to accelerate commitments, which as in the case of certified payments, is a cause of concern considering that the final date for eligibility of expenditure is 31 December 2015.

The public national contribution up to 31 May 2015 was EUR 2.44 billion, which represents an increase of EUR 321.62 million over 31 May 2014 (+15.17 %).

Over the same period, private contributions to EFF-supported measures amounted to EUR 2.92 billion, which represent an additional EUR 375.36 million, a 14.73% increase over 31 May 2014. As already seen in previous reports, private contributions can mainly be found in processing (45.62 %), aquaculture (24.95 %) and investments on board (10.23 %). To these, it is necessary to add now investments in the development of fisheries areas (8.57%). These 4 measures account for nearly 90% of private investments.

In terms of the leverage effect, every euro of EFF support committed generates EUR 1.37 of committed national support (+2.2% compared to 31 May 2014), of which EUR 0.75 of private funding and EUR 0.62 of national public contribution.

2.2.Main areas of intervention for the EFF

The table below compares the level of commitments for the five most used measures by the end of July 2012, May 2013, May 2014 and May 2015, respectively:

Table 1

The concentration of EFF commitments on these five measures remains quite high (68.46 %); this figure is similar to the one for 2013 and slightly above the one for 2014.

Permanent and temporary cessation continue their decline in relative terms (see table 3), the latter in particular, which with 5.83% of the commitments has been overtaken by collective actions under Axis 3 (7.36% of the commitments) and is now the seventh most used measure. The table below highlights this decrease; the commitment rate of the two measures put together is reduced by 30% in the period analysed.

Table 2

2.3.Evolution per priority axis

The table below shows the evolution of the relative importance of total commitments per priority axis for the period from July 2012 to May 2015.

The situation at 31 May 2015 follows the trend of the previous years, including the decrease of Axis 1, with the exception of Axis 4, which shows a significant gain in relative importance since 2012.

Table 3

The table and the graph below show the relation between actual commitments and planned expenditure in 2007 per priority axis for the period 2012-2015.

Table 4

The above tables and graphs show that, within a period of three years, there has been a convergence in the rate of commitments among the different axes; rates of commitments diverged significantly earlier on in the programming period for different reasons such as the 2008 fuel crisis, the impact of the economic and financial crisis, the novelty of Axis 4, overcoming the mismatch between objectives of the intervention and the actual needs on the ground.

The most notable evolution, as already seen in previous Commission reports is the decline of public spending on Axis 1, which could be explained by two factors: first, the scrapping schemes already implemented under the FIFG 7 that continued in the first years of EFF implementation have largely addressed overcapacity issues in some fleet segments. Improved profitability for a number of fleets over the last few years have made the sector more confident in its capacity to thrive without public support. As a result, Axis 1 is progressing quite slowly, and is now lagging behind the average.

Axes 2 and 3 are the most advanced in terms of commitments, with Axis 2 being very close to 100% and Axis 3 approaching 95%. However, it is in Axis 4 (and Axis 5), where the progress is faster since 2012. By May 2015, Axis 4 was almost catching up with the rest of the axes: in less than three years the distance from the average has been reduced from 29 percentage points to 10, with a strong acceleration after May 2014 (+42%).

2.4.Budget implementation by the Commission

In accordance with the financial programming, the last annual commitments for the period 2007-2013 were made in the EU budget in 2013.

In 2014, 13.9 % (EUR 567.25 million) of the total envelope was paid as interim payments; 83.8 % for convergence (EUR 475.49 million) and 16.2 % for non-convergence regions (EUR 91.76 million). Detailed information is provided in Annex 1 and in the accompanying staff working document.

2.5.Use of technical assistance by the Member States

In 2014, 23 Member States committed amounts under the technical assistance budget (Axis 5). The larger amounts were committed by Croatia (100 % of the EFF funds allocated to Axis 5), Poland (8.2 %), Sweden (6.5 %), Denmark (6 %), Belgium (5.8 %) and Romania (7 %). Actions financed included strengthening administrative capacity, IT development, publicity and information, as well as supporting the management and implementation of the operational programmes. The above graph shows the significant increase starting in May 2013 with a rate of commitments of 45% reaching 84% two years later.

2.6.Use of technical assistance by the Commission

The European Maritime and Fisheries Fund (EMFF) 8 entered into force on 1 January 2014 replacing the EFF. Therefore, in 2014 the Commission did not commit new actions under the EFF technical assistance.

2.7.Coordination of the EFF with the Structural Funds and the European Agricultural Fund for Rural Development (EAFRD) 9

The operational programmes (OPs) show that from the outset Member States have been aware of the need to ensure consistency and coordination in implementation between the EFF and the Structural Funds, as well as the EAFRD. Member States’ annual implementation reports do not explicitly refer to fundamental problems of coordination.

2.8.Irregularities reported by Member States

In relation to the EFF, Member States detected and reported 102 irregularities in 2014, involving EUR 8.7 million (representing 1.5% of the certified expenditure). Of these, 11 were reported as fraudulent by five Member States, involving an amount EUR 2.1 million 10 .

3.ASSESSMENT OF EFF IMPLEMENTATION PER AXIS

As of 31 May 2015, EFF support was committed to a total of 134,689 operations. The table below summarises the evolution of the number of operations during the period July 2012 –May 2015. It shows that even though the figures increase at a two-digit pace, the annual rate of increase has been decreasing since 2012.

Table 5

The average total cost per operation is EUR 67 941, of which EUR 46 525 is total public support and EUR 28 635 is the EFF contribution. The private contribution amounts to EUR 21 416, slightly over 30% of the total eligible costs. These amounts represent a small increase (+1.5%) over 2014.

3.1.Axis 1. Measures for the adaptation of the community fishing fleet.

3.1.1.Economic performance of EU fishing fleet in 2013 (based on 2015 Annual Economic Report 11 )

Data for 2013, on which the annual economic report (AER) for 2015 is based, show that in 2013 the EU fishing fleet was generally profitable, generating EUR 6.8 billion in revenue, EUR 3.4 billion in gross value-added, EUR 506 million in net profit and 7.8% in net profit margin. This positive trend is also reflected in the positive expectations by the industry with growing investments in recent years (mainly new fishing vessels and investments on board). However, this overall positive trend does not apply to all EU fleets as three national fleets, those of Belgium, Finland and Portugal, accumulated losses in 2013.

This overall improvement in fleet economic performance can largely be explained by the positive evolution of the first sale prices of some important fish species, the shift to more fuel efficient fishing gear and engine replacement (with EFF support in some cases), the consolidation of the fleet, as well as changes in fishing and marketing behaviour. Decreasing fuel prices and a reduction of fuel consumption of some 10% from 2008 to 2013 have also contributed to reinforcing the economic performance of most EU fleets This reduction in fuel consumption which started at a time of high fuel prices still continues in spite of lower fuel prices.

Data in the AER show significant differences among regions (most notably with the Mediterranean) and among fleet segments. The performance of the Small Scale Coastal Fisheries (SSCF) tended to deteriorate while industrial fleets improved significantly over the period 2008-2013.

3.1.2.Permanent cessation of fishing activities.

By 31 May 2015, the EFF had contributed to 4 267 permanent cessation operations (+4 % over 31 May 2014), at a total public cost of EUR 935.81 million, including EUR 546.34 million from the EFF.

Costs per operation do not change significantly compared to previous years. The total cost per operation amounts to EUR 219 313, of which EUR 128 038 is EFF funding (the fifth most expensive in terms of committed EFF funding).

The figure above includes a small number of reassignment operations (48). The costs per reassignment (EUR 383 131, including EUR 237 249 from the EFF) are 73% higher than the ones for scrapping.

3.1.3.Temporary cessation of fishing operations

As in previous years, temporary cessation remains the most used measured in terms of number of operations (63 152 operations 46.27% of the total number). However, in relative terms the importance of support to temporary cessation decreased by 10% between May 2014 and May 2015.

The average costs per operation under this measure remains the lowest in the EFF (EUR 6 109 total costs, EUR 3 608 EFF costs), and is still decreasing since July 2012.

3.1.4.Investments on board fishing vessels and selectivity

Investments in selectivity and on board fishing vessels remain the second most used set of EFF measures (13 019 operations); however, their relative importance has decreased since May 2013 (from 10.8% to 9.54%).

The total investment amounted to EUR 509.6 million of which the total public share was EUR 210.53 million. The EFF contribution to the public share was EUR 121.93 million (3.12% of total EFF commitments up from 2.86 % in the previous year).

The cost per operation was EUR 39 143 of which the public contribution was EUR 16 171 (EUR 9 366 from the EFF). The private contribution per operation was quite large: EUR 23 000.

The numbers above include 1 509 engine replacements and 954 gear replacements. Engine replacement represents just above 1% of the total number of operations but only 0.31% of the total EFF commitments. Total costs per operation are EUR 32 753 of which EUR 8 057 are supported by the EFF and EUR 5 890 by national public contributions.

Twelve Member States have used the measure. France (516), Spain (348), Portugal (220), Italy (111), Greece (102) and the UK (92) account for 99%.of the total number of operations. However, taking into account the size of the fleets the 3 most intensive users are Belgium (engines replaced equivalent to 24.39% of the fleet), France (7.3%) and Cyprus (4.9%).

Regarding gear replacement, total costs per operation are lower: EUR 21 495, of which EUR 4 873 are supported by the EFF and a further EUR 4 600 by national public contributions. A total of 13 Member States have used this measure, with Cyprus (429), Spain (139), Greece (118), Italy (88) and the UK accounting for 80% of the total number of operations.

3.1.5.Small-scale coastal fishing

Operations in favour of small-scale coastal fishing remains few, representing only 4.21% of the total number of operations, but just 0.97% of the total EFF commitments. The total costs per operation are EUR 11 808, of which the public contribution was EUR 9 586. The EFF part, EUR 6 620, is the second lowest after temporary cessation. The private contribution was EUR 2 222.

3.1.6.Socio-economic compensation for the management of the fishing fleet. 

The number of operations under this measure is very similar to the previous one: 4.17% of the total number of operations, and only 1.82% of the EFF commitments. The total cost per operations amounts to EUR 36 991, of which EUR 20 961 was covered by public contributions (EUR 12 499 from the EFF). The private contribution, EUR 16 000, is much higher than in the case of small-scale coastal fishing.

All in all, the number and costs of operations under Axis 1 also confirms its relative decline over the years.

3.2.Axis 2. Aquaculture, inland fishing, processing and marketing of fishery and aquaculture products.

3.2.1.Inland fisheries

Inland fishing operations remain few in numbers and very small in terms of total costs. However, the number of operations increased by 41% between 31 May 2014 and 31 May 2015. As of 31 May 2015, there were 1 327 operations (0.97 % of the total). They account for 0.44 % of total EFF commitments, the second smallest commitment item. They are also the fourth cheapest in terms of EFF commitments per operation, accounting for EUR 12 892, which is less than half the average EFF cost per operation. The total costs per operation is EUR 33 089, which remains the third smallest. The public national contribution is EUR 9 390 and the private contribution per operation is EUR 10 800.

3.2.2.Aquaculture

As mentioned above, aquaculture measures are the second largest areas of investment for the EFF. The number of operations is relatively small (8 358 operations, 6.12 % of the total), but they consume 14.33% of EFF commitments. The total cost per operation is EUR 186 042 (+4% compared with May 2014), of which EUR 87 261 corresponds to private contributions +8.3%), EUR 31 783 to national public resources (+5.7%) and EUR 66 998 to the EFF (-2%). Total commitments amount to EUR 1 554.9 million, of which EUR 559.97 million is EFF funding, EUR 265.6 million is national public contribution and EUR 729.3 million is private funding.

Some 60% of the operations correspond to modernisation and extension of existing farms, 19% to aqua-environmental measures and 17.6% to new production capacity. The latter are the ones with the higher EFF uptake (EUR 155 727), closely followed by hatcheries (EUR 130 802) and animal health measures (EUR 106 628). The rest of measures are below EUR 60 000 in terms of EFF contribution.

One euro of EFF support generates EUR 1.78 of national resources, of which EUR 1.31 private and EUR 0.47 public.

3.2.3.Processing

Processing measures remain the largest expenditure item in terms of EFF commitments. The relative importance of processing operations has been increasing since end of July 2012 (+37%). While the 5 016 operations only represent 3.68% of the total number, they represent 17.53% of the EFF commitments.

The total cost of operations amount to EUR 2.39 billion of which EUR 1.33 billion are private resources and EUR 1.06 billion are public resources, of which EUR 685 million correspond to the EFF and the rest to public national contributions.

The total costs per operation amount to EUR 476 314 (twice as much as a permanent cessation operation). The private contribution is EUR 265 822 and the public contribution is EUR 210 492, of which EUR 136 605 are EFF resources (the third largest).

Some 75% of the operations correspond to construction of new processing facilities or modernisation or extension of existing ones; 20% to the modernisation of marketing establishments and the rest to construction of marketing establishments. The EFF costs per operations exceed EUR 160 000 regarding processing facilities, EUR 155 000 for construction of marketing establishments and EUR 49 500 for the modernisation of marketing establishments.

One euro of EFF resources generates EUR 2.49 of national contributions, of which EUR 1.95 are private resources and the rest are public.

3.3.Axis 3. Measures of common interest.

3.3.1.Fishing ports, landing sites and shelters

By 31 May 2015, the EFF was contributing to 1 702 infrastructure projects (1.25 % of the total).Total investments amount to EUR 815.3 million (+17% over May 2014), with a public contribution of EUR 745 million (+16.5%), of which EUR 435.96 million EFF (+10%).

Infrastructure projects remain the most consuming in terms of total investment per project (EUR 479 043), in terms of EFF funding (EUR 256 141, -6.5%)) and in terms of national public contribution (EUR 181 600, +8.4%).

3.3.2.Development of new markets and promotional campaigns

By 31 May 2015, while the number of financed operations in this field was relatively small (2 363, 1.73 % of the total), they consumed 3.63% of total EFF commitments.

Total costs amounted to EUR 245.2 million, of which EUR 228.14 million were public contributions (EUR 141.73 million EFF) and only EUR 17 million private contributions.

The total cost per operation is EUR 103 758 (+4.2% compared to May 2014), of which EUR 59 979 correspond to the EFF (+2.5%), EUR 36 570 to national public resources (+10.5%) and EUR 7 210 (-9.8%) to private contributions.

3.3.3.Pilot operations. 

Pilot operations include the experimental use of more selective fishing techniques aimed at acquiring and disseminating new technical knowledge and carried out by any competent body designated for that purpose by the MS in partnership with a scientific or technical body.

Figures as of 31 May 2015 remain modest, 716 operations, representing just 0.52% of the total number, which is nevertheless a significant increase over 31 May 2014 (+20.5%) and consume 2.64% of EFF resources and 3.87% of national public resources.

Total costs amount to EUR 234.6 million of which EUR 197.6 million are public costs (EUR 103.2 million from the EFF).

The total costs per operation are EUR 327 691, of which EUR 275 976 are public (EUR 144 164 from the EFF, the second largest item) and EUR 51 716 are private.

One euro of EFF resources generates EUR 1.27 of national resources, of which only 25% are private resources. This is among the lowest leverage effect and highlights therefore the need of public funding to promote innovation.

3.4.Axis 4. Sustainable development of fishery areas. 

From May 2014 to May 2015, Axis 4 implementation maintained the rapid progress of previous years. The 21 Member States implementing Axis 4 selected their FLAGs and by May 2015 the number of groups had reached 312.

FLAGs and project promoters, as well as managing authorities and intermediate bodies, were all actively preparing, selecting, approving and paying projects. The related figures show a steady rise in project approval: whilst at the end of 2012 there were only 2 756 projects selected on the ground, this figure jumped to 6 353 projects in one year. This trend continued and by 31 May 2015, 11 299 projects had been approved (+28.4%), which represent 8.28% of the total number of projects and consume 11.47% of the EFF total commitments.

Total costs in Axis 4 amount to EUR 912.1 million, of which EUR 661.7 million are public contributions. The EFF contributed with EUR 448.34 million to the public part.

Total cost per project amount to EUR 80 728, of which EUR 22 165 is private contributions and EUR 58 562 is public contribution (EUR 39 680 from the EFF).

One euro of EFF resources generates EUR 1.03 of national resources, (55% private and the rest public national).

4.First set of operational conclusions on the EFF for the period 2007-2013

The 2014 Annual Implementation Report confirms the following trends highlighted in previous reports:

The gradual decrease over the last years in EFF support to measures under Axis 1 (permanent and temporary cessation in particular) is more prominent in 2014-2015. This decrease can be explained by the following factors: scrapping schemes implemented in the past partly addressed overcapacity in some fleet segments; the improved profitability of some fleets makes the sector more confident in its future.

Axis 2: aquaculture measures are the second largest areas of investment for the EFF after processing.

Axis 3 is still making progress, though at a relatively slower pace.

Axis 4 is rapidly progressing and now represents 11.47% of total EFF commitments

Comparing the situation at the end of May of 2015 and 2014, it is possible to observe that for many measures (particularly aquaculture, processing, pilot projects and marketing measures) the average national public contribution per operation increases more rapidly than the EFF contribution. In addition given the relative decrease in state aid schemes, it could be argued that national support is being directed towards co-financing EFF measures rather than granting state aid.

There is some evidence of an increase of the private contribution per operation. In part, this can be explained by a decrease in the aid intensity of EFF supported operations, particularly in profitable sectors of activity (most notably aquaculture and processing), which could be consistent with the fiscal consolidation over recent years.

Both commitments and certified expenditure at the level of the Member States have improved but are still below the level expected before the end of EFF implementation. By 31 May 2015, over 9% of the EFF allocation (some EUR 394 million) had not been committed yet, pointing to an urgent need to accelerate payments, in order to ensure full use of all funds available within the deadline (31 December 2015).

FINANCIAL EXECUTION OF THE EFF BY THE COMMISSION IN CONVERGENCE AND NON-CONVERGENCE REGIONS

(1) Art. 68 of Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European Fisheries Fund, OJ L 120, 15.8.2006.

(2) Table I. Financial execution in convergence regions.Table II. Financial execution in non-convergence regions.Table III. Financial execution in convergence and non-convergence regions. Table IV. EFF programmed amounts by priority axis and by Member State.Table V. EFF certified expenditure by priority axis and by Member State.

(3) Commission Delegated Regulation (EU) 2015/895 of 2.02.2015 supplementing Regulation (EU) No 508/2014 of the European Parliament and of the Council on the EMFF as regards transitional provisions. OJ L 147/1

(4) Regulation (EU) No 1303/2013 laying down common provisions on the ERDF, the ESF, the CF, the EAFRD and the EMFF and laying down general provisions on the ERDF, the ESF, the CF and the EMFF and repealing Council Regulation (EC) No 1083/2006, OJ L 347, 20.12.2013.

(5) This figure corresponds to the initial allocation in 2007. When de-commitments are taken into account (EUR 256.9 million up until 31/12/2014), the rate of commitment increases to 96.3% of the modified EFF allocation.

(6) Axis 1. Measures for the adaptation of the Community fishing fleet.
Axis 2. Aquaculture, inland fishing, processing and marketing of fishery and aquaculture products.
Axis 3. Measures of common interest.
Axis 4. Sustainable development of fisheries areas.

(7) Regulation (EC) No 1263/1999 , on the Financial Instrument for Fisheries Guidance, OJ L 161, 26.06.1999

(8) Regulation (EU) No 508/2014 on the European Maritime and Fisheries Fund (EMFF), OJ L 149/1, 15.05.2014

(9) Council Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), OJ L 277, 21.10.2005.

(10) For a complete overview of the reported irregularities in relation to EFF, see the Commission Staff Working Document SWD(2015) 156 final (pages 44-47), Statistical evaluation of irregularities reported for 2014 accompanying the Report from the Commission to the European Parliament and the Council on the Protection of the European Union’s Financial Interests – Fight against Fraud – Annual Report 2014, COM (2015) 386 final.

(11) Data collected by the Member States under the Data Collection Framework have a two year lag.