A stronger partnership for the outermost regions

The Commission is proposing a socio-economic development action plan for the outermost regions for the period 2007-13. The plan is part of the European cohesion policy reforms and aims to implement a compensation programme for the handicaps and constraints of the outermost regions and a "wider neighbourhood" action plan. The Commission also intends to set up further instruments under other Community policies.

ACT

Commission communication of 26 May 2004. "A stronger partnership for the outermost regions" [COM(2004) 343 final - Not published in the Official Journal].

SUMMARY

Seven of the regions in the European Union are classified as 'outermost': the four French overseas departments (Guadeloupe, French Guyana, Martinique and Réunion), the Spanish Autonomous Community of the Canary Islands, and the Portuguese autonomous regions of the Azores and Madeira.

The outermost regions have to cope with specific constraints - remoteness, insularity, small size, difficult topography and climate, as well as economic dependence on a few products - all factors the permanence and combination of which severely restrain their socio-economic development. (Article 299(2) of the EC Treaty).

Priorities for action

The action plan for developing the outermost regions proposed by the Commission will be grouped in three fields of action to take into account their specific needs. The three priorities for action are:

• promoting accessibility. The proposed measures are designed to reduce the main constraints arising from the isolation of these regions.
• improving competitiveness. This priority aims to create an economic environment that favours the setting up of businesses. Otherwise, firms remain restricted to a limited local market that is fragmented and remote.
• prioritising regional intergration. Regional intergration aims to develop trade in goods and services between these regions and neighbouring non-member countries. It is important to encourage their intergration into their surrounding geographical area.

COHESION POLICY REFORM

The strategy comes under the general context of the European Cohesion Policy reform for the period 2007-13. The third report on social and economic cohesion of February 2004 sets out the Commission's priorities for the cohesion policy after 2006. In the context of the outermost regions, the report states that these regions are eligible for any of the regional policy objectives after 2006: Convergence, Regional Competitiveness and Employment and European Territorial Cooperation.The report also proposes

• setting up a specific programme to compensate for additional costs;
• implementing the 'wider neighbourhood' action plan.

These elements are the subject of the legislative proposals (proposals for Regulations of 14 July 2004 - general regulation and ERDF Regulation) and non legislative proposals (strategic Community guidelines) by the Commission, in particular within the general context of the reformed European Cohesion Policy.

Additional allocation to compensate for extra costs

For the period 2007-13, the Commission proposes an additional allocation to compensate for the handicaps and constraints of the outermost regions, which cause additional production costs. The program will be financed by the European Regional Development Fund (ERDF).

This allocation aims to reduce the problems set out in the EC Treaty that, along with the factors of competitivity and accessibility, hinder the economy of the outermost regions.

The objectives of the programme are aimed at compensating:

• difficulties of access due to their great isolation, fragmentation and topography;
• small regional markets, breaking bulk and no or inadequate economic diversification;
• environmental and climatic difficulties and the preservation of biodiversity.

The 'wider neighbourhood' action plan

A "wider neighbourhood" measure aimed at facilitating cooperation with the neighbouring countries, thereby increasing economic, social and cultural links, trade in goods and services and the movement of people. These regions are very close to the geographical markets of the Caribbean, America and Africa, particularly those of the ACP countries (African, Caribbean and Pacific countries parties to the Cotonou Agreement). This is not a financial instrument, but a Commission initiative in order to coordinate the efforts being made by the Community more efficiently, in all policies concerned.

The reformed European Cohesion Policy's contribution to this action plan would be included under the new "European territorial cooperation" programme, which is based on two main principles:

• transnational and cross-border cooperation;
• trade and customs measures.

The priorities in the context of the European transnational and cross-border cooperation will require the following guidelines to be taken into account:

• facilitating exchanges as regards transport, services and the information and communications technologies;
• facilitating exchanges of persons (including the fight against illegal immigration);
• exchanges of experience as regards regional integration.

The commercial policy's contribution to this action plan is based on the actions in the field of commercial trade, and customs measures that focus on the need for the outermost regions to be integrated into their regional economy more efficiently. On one hand, the outermost regions must be included in the economic partnership agreements (EPA) between the EU and the ACP countries (ACP-EU) within the general context of the Cotonou Agreement. On the other hand, the outermost regions must be included in the Union's preferential agreements with other non-member countries. In this context, the customs aspects must be taken into account.

OTHER COMMUNITY POLICIES

As well as the cohesion policy, the instruments used under the other Community policies can also help implement the development strategy for the outermost regions. These instruments come under the context of actions linked to competitiveness, growth and the specific constraints of the outermost regions.

Actions linked to competitiveness and growth

The additional costs impact on most of the sectors of the local economy producing goods and services in the outermost regions. This has resulted in a very poor diversification, an economy that is weak in job-creation and a higher degree of dependency than in the rest of the Union.

To overcome these constraints, this communication proposes the following actions linked to competitivity and growth in the following areas:

• developing human resources;
• public services, due to the lack of any real competition between economic operators, whether public or private;
• innovation, the information society and research and technological development (in conjunction with the objectives of the Lisbon strategy);
• the environment.

The specific characteristics which affect the situation of the outermost regions must also be taken into account as part of the revision of the guidelines on State aids for regional purposes.

Action on the constraints on the outermost regions

Use of the existing instruments in the fields of air transport and sea transport can reduce the impact of poor access to the outermost regions. The links concerned are those between the outermost regions and mainland Europe (in both directions), between the outermost regions themselves and within those regions.

In addition the Commission proposes several measures in the agriculture sector (regarding the Rural Development Fund, reforming the specific regulations for guidance on the remoteness and insularity (POSEI) or the scheme for the sugar and banana sectors, for example) and in the fisheries sector (under the new European Fisheries Fund, for example), taking into account the fragile production in these sectors.

Context

In order to press ahead with the implementation of Article 299(2) on the EC Treaty of the special status of the outermost regions, the Seville European Council June 2002 invited the Commission to submit a strategy for the outermost regions. The communication of May 2004 following this decision and implements the measures in this communication.

RELATED ACTS

Commission Report, 14 March 2000, on the measures to implement Article 299(2) - the outermost regions of the European Union [COM(2000) 147 final - Not published in the Official Journal].

Commission Report, 19 December 2002, on implementation of Article 299(2) of the EC Treaty: measures to assist the outermost regions [COM(2002) 723 final - Not published in the Official Journal].

Communication from the Commission, 18 February 2004. « A new partnership for Cohesion - Convergence, Competitiveness, Co-operation» Third Report on Economic and Social Coheison [COM(2004) 107 - Not published in the Official Journal].

Proposal for a Council Regulation, 14 July 2004, laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund [COM(2004) 492 final - Not published in the Official Journal].

Proposal for a Regulation of the European Parliament and of the Council, 14 July 2004, on the European Regional Development Fund [COM(2004) 495 final - Not published in the Official Journal].

Communication from the Commission, 6 August 2004, A stronger partnership for the outermost regions: situation and prospects (COM(2004) 343),

Communication from the Commission, 26 May 2004) [COM(2004) 543 final - Not published in the Official Journal].

Proposal for a Council Regulation establishing a temporary scheme for the restructuring of the sugar industry in the European Community and amending Regulation (EC) No 1258/1999 on the financing of the common agricultural policy [COM(2005) 263 final - Not published in the Official Journal].

Last updated: 13.10.2005