European Solidarity and the Irish Flood Crisis

27 Nov 2009

Shane Fitzgerald

The Joint Oireachtas Committees on Agriculture and European Affairs argued on Wednesday (November 25) that Ireland should make an urgent application for financial aid from the European Solidarity Fund (EUSF) in order to help those whose homes, land and livelihoods have been damaged by the unprecedented flooding of the last week.

With water levels in the river Shannon at a historic high and set to rise further over the coming days, An Taoiseach, Brian Cowen, yesterday indicated his willingness to increase the €10 million in funding which his government has approved for emergency relief. Asked if  Ireland would seek European Union funding, he said: “We are making inquiries in that area.” 

Irish MEPs including Pat Gallagher, Alan Kelly and Mairead McGuinness have been calling on the Commission to make funds available while the President of the Irish Farmers’ Association, Pádraig Walsh – also the President of COPA, the European farm organisation – briefed the EU Commissioner for Agriculture, Mariann Fischer Boel, on the situation and requested an aid package for farmers.

The EUSF was created in response to severe flooding in Germany, Austria, the Czech Republic and France during the summer of 2002. Since then, twenty different European countries have drawn on the fund to relieve the fallout from natural disasters which have included floods, droughts, storms, forest fires, a volcanic eruption and an earthquake.

Earlier this year, €494 million was granted to Italy to assist with its recovery efforts following an earthquake in the Abruzzo region which killed nearly 300 people and damaged thousands of buildings, devastating the local economy. While the effects of the recent flooding in Ireland have not been nearly so tragic, millions of euro worth of damage has been inflicted on households and businesses, hundreds of people have been evacuated from their homes and thousands of households in Cork city are heading into their second week without water.

The EUSF has an annual budget of one billion euro but is mandated to intervene “mainly in cases of major natural disaster”. A natural disaster is considered to be 'major' if it results in damage estimated either at over EUR 3 billion (2002 prices), or at more than 0.6% of a Member State’s gross national income. By way of exception, the Fund may be mobilised for an extraordinary regional disaster resulting in damage inferior to this threshold, if it is considered to affect the major part of a region’s population and to have serious and lasting repercussions on living conditions and economic stability. In such a scenario, particular attention would be paid to remote and isolated regions and the annual amount available limited to no more than 7.5% of the annual amount allocated to the Solidarity Fund (i.e. €75 million).

Ireland has benefited from EU emergency funds before, most recently when €14.8 million was granted from the European Globalisation Adjustment Fund (EGF) to assist some of the 1,900 people made redundant by Dell in Limerick this year.

Since joining the EU in 1973, Ireland has received over €17 billion in EU Structural and Cohesion Funds support. The current round of EU Structural Funds runs from 2007-2013 and will allocate over €308 billion in total, equivalent to approximately one third of the European Union budget. Over this seven year period, Ireland will receive €901 million from the EU’s four main structural funds in addition to any resources allocated from the EUSF and the EGF. These four main structural funds are:

• the European Regional Development Funds (ERDF): used to support major infrastructure projects such as roads and ports as well as direct grant-aid to industry;

• the European Social Fund (ESF): supports education and training, aimed at implementing the EU’s employment policy;
• the European Agricultural Guidance and Guarantee Fund (EAGGF): contributes to the structural reform of the agriculture sector and to the development of rural areas; and
• the Financial Instrument for Fisheries Guidance (FIFG): a specific Fund for the structural reform of the fisheries sector.
  

Rural development is also supported, as part of the Common Agricultural Policy, by the European Agricultural Fund for Rural Development (EAFRD).

It remains to be seen if an Irish application to the EUSF will succeed this time but, as Ireland moves towards becoming a net contributor to the EU budget over the next two to four years, structural funds and emergency reserves like the EUSF and the EGF should continue to provide important relief to struggling regions.

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