GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

Grønlandsudvalget 2018-19 (1. samling)
GRU Alm.del Bilag 27
Offentligt

BRIEFING

EU Legislation in Progress

2021-2027 MFF

A new association of the Overseas

Countries and Territories (including

Greenland) with the European Union

OVERVIEW

On 14 June 2018, in preparation for the new multiannual financial framework (2021 to 2027 MFF),

the European Commission published a proposal for a Council decision on the Association of the

Overseas Countries and Territories, including Greenland, with the European Union. For Greenland

the main source of EU funding is currently the EU budget, while for the other overseas countries and

territories, it is the European Development Fund, a financial instrument outside the EU budget. The

proposed decision would bring together the funds for all EU overseas countries and territories under

the EU budget, as part of new Heading 6 'Neighbourhood and the world'. The European Parliament,

which is only consulted, has adopted its legislative resolution on the proposal, in which it calls for

an increase of the proposed budget for 2021-2027, and for better account to be taken of OCTs’ social

and environmental circumstances.

Proposal for a Council decision on the Association of the Overseas Countries and Territories with

the European Union including relations between the European Union on the one hand, and

Greenland and the Kingdom of Denmark on the other ('Overseas Association Decision')

Committee responsible:

Rapporteur:

Shadow rapporteurs:

Development (DEVE)

Maurice Ponga (EPP, France)

Doru-Claudian Frunzulică (S&D, Romania)

Eleni Theocharous (ECR, Cyprus)

Jan Zahradil (ECR, Czech Republic)

Charles Goerens (ALDE, Luxembourg)

Lola Sánchez Caldentey (GUE/NGL, Spain)

Maria Heubuch (Greens/EFA, Germany)

Adoption by Council

COM(2018) 461

14.6.2018

2018/0244(CNS)

Consultation procedure

– Parliament adopts

only a non-binding

opinion

Next steps expected:

EPRS | European Parliamentary Research Service

Author: Eric Pichon

Members' Research Service

PE 628.314 – February 2019

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

EPRS | European Parliamentary Research Service

Context

The future long-term framework for the European Union (EU) budget will apply as of 1 January 2021.

The European Commission presented its proposals for this multiannual financial framework for the

2021 to 2027 period (MFF 2021-2027) in June 2018. Under this proposal, Heading 6,

Neighbourhood

and the world,

will cover funds for EU overseas countries and territories (OCTs).

The OCTs enjoy extensive self-governance but are not sovereign states. Their constitutional

relationship with certain Member States – Denmark, France, the Netherlands and the United

Kingdom – is reflected in the

Treaty on the Functioning of the European Union

(TFEU, Part Four,

Association of the overseas countries and territories). Although they share similar characteristics

with the EU's outermost regions (ORs), the OCTs' have a different status in the EU Treaties.

While

the ORs are covered by EU law, albeit

adapted

to their specific situation, the OCTs are not, unless

explicitly provided in the texts. The OCTs are not part of the European single market.

The EU's OCTs currently number 25 overseas islands. In 2021, on account of Brexit, the 12 British

OCTs will lose their association with the EU. As shown in Table 1 below, the OCTs share a number of

similarities: most of them are small islands, not densely populated, and the majority draw most of

their revenues from fishing and tourism. They represent

80 % of EU biodiversity,

and their

geographic positions and reliance on natural resources make them particularly vulnerable to

climate change. They are remote from the EU mainland and, more generally, from their trading

partners. Reliance on imports represents a heavy burden. The OCTs' per capita gross domestic

product (GDP) is lower than the EU average, with the exception of the Falklands, Saint Barthélemy,

and those OCTs specialised in high-yield financial services.

Table 1 – OCTs: main characteristics and current EU support

Overseas

country or

territory

Surface

(km²)

Pop.

Density

(pop./km²)

GDP/capita

(€)

EU support

(2014-2020,

million €)

Main economic

activities

British OCTs (not included in the current proposal )

Tourism,

construction,

financial services

Financial services,

tourism

Financial services,

tourism

Construction,

tourism, agriculture,

banking

Tourism,

construction,

financial services

Financial services,

tourism

n/a

Subsistence fishing,

horticulture,

handicrafts

Anguilla

British

Virgin Islands

Cayman Islands

132

15 962

121

18 763

14.0

153

259

28 213

55 000

185

213

30 124

55 966

–

18.4

Montserrat

102

5 000

11 160

Turks and

Caicos Islands

Bermuda

British Indian

Ocean Territory

Pitcairn

948

38 435

20 868

14.6

64 237

none

1 190

n/a

80 441

n/a

–

n/a

2.4

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

A new Association of the Overseas Countries and Territories (including Greenland) with the European Union

Overseas

country or

territory

British

Antarctic

Territory

Falkland Islands

Saint Helena,

Ascension,

Tristan da

Cunha

South Georgia

and the South

Sandwich

Islands

Caribbean

Aruba

Bonaire

Curaçao

Saba

180

294

444

101 484

16 000

142 180

2 000

564

321

154

27 134

20 545

21 219

2 075

13.0

3.9

16.9

3.5

Tourism

Tourism, oil refinery

Tourism, medical

school

Tourism, public

works, non-financial

market sector, trade

Tourism, oil storage

terminal

Tourism

Surface

(km²)

Pop.

Density

(pop./km²)

GDP/capita

(€)

EU support

(2014-2020,

million €)

Main economic

activities

none

n/a

–

n/a

Fisheries,

agriculture, tourism

Tourism, coffee,

stamp sales

12 173

121

2500

4 177

710

260

89 941

5.9

6 378

21.5

none

n/a

–

n/a

Saint-

Barthélemy

8 800

353

35 700

–

Saint Eustatius

Sint Maarten

Indian Ocean

TAAF (French

Southern and

Antarctic

Lands)

Pacific

French

Polynesia

3 800

50 000

123

1 220

24 673

14 447

2.4

7.0

439 672

none

n/a

–

Fishing, tourism,

scientific research

2.5

million

267 000

498 (Tahiti)

16 000

29.9

Services, tourism

Mining activities,

trade, construction,

tourism

Agriculture, non-

merchant and

public services,

trade

New Caledonia

18 576

245 580

28 931

29.8

Wallis and

Futuna

142

13 445

10 100

19.6

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

EPRS | European Parliamentary Research Service

Overseas

country or

territory

EU support

(2014-2020,

million €)

Surface

(km²)

Pop.

Density

(pop./km²)

GDP/capita

(€)

Main economic

activities

Other areas/Isolated OCTs

Greenland

2.2

million

56 810

30 020

217.8

Fishing, mining,

tourism

Public

administration and

merchant services

Saint Pierre and

Miquelon

242

6 125

28 327

26.3

Additional financial support for OCTs (excepting Greenland)

(EDF 11)

Regional cooperation, emergencies, technical assistance, European

Investment Bank investment facilities

126.5

MS: associated Member State: Denmark (DK), France (FR), the Netherlands (NL), or the United Kingdom (UK)

Pop.: permanent population.

Density rounded up to the unit.

EU support: Greenland : MFF 2014-2020,

other OCTs: EDF 2014-2020 indicative allocation.

Isolated OCTs as listed in

Decision 2013/755/EU.

Data source:

Surface area and population: Association of the OCTs (OCTA), accessed 4 October 2018; GDP per

capita and main economic activities:

EPRS,

April 2017 (except for the TAAF:

OCTA);

EU support:

European

Commission,

accessed 4 October 2018.

Existing situation

The

Treaty on the Functioning of the European Union

(TFEU, Part Four) sets out the main principles

underpinning the association of the OCTs with the EU. The legal framework for OCT association with

the EU also applies to Greenland, unless otherwise stipulated in the

special protocol

for Greenland,

annexed to the Treaties.

The current Council Decision 2013/755/EU on the association of the OCTs with the EU – referred to

as the

Overseas Association Decision (OAD)

– was adopted by the Council after consulting

Parliament. The decision promotes

OCT cooperation with their neighbours,

in particular the

African, Caribbean and Pacific states, and their regional groupings.

It also emphasises their unique

role as regards environmental challenges: the association decision is built around EU support to

strengthen

OCT resilience

'in the fields of conservation of biodiversity and ecosystem services,

disaster risk reduction, sustainable management of natural resources and promotion of sustainable

energy'. Another aim of the decision is to improve

OCT competitiveness,

in the areas of sustainable

trade and tourism in particular and by fostering economic diversification.

The OCTs benefit from trade preferences; these provide in particular for adapted

rules of origin.

The

promotion of labour standards and financial transparency is also highlighted. OCT authorities are

encouraged to develop policies in areas such as the sustainable management of forests, coasts,

water and fish stocks; waste; communications; research and education; health; culture; tourism; and

the fight against terrorism.

Before

1985,

Greenland was part of the EU under Denmark's membership but asked to be granted

OCT status after a referendum held in 1982. Council Decision 2014/137/EU, the

Greenland Decision,

complements the OAD in respect of Greenland. The joint EU-Greenland

Programming Document

for the Sustainable Development of Greenland

lays down guidelines for the partnership and the use

of the corresponding funding (the EU budget

Instrument for Greenland (IfG)).

For the 2014 to 2020

period, the focus for cooperation is on education, vocational training and the post-elementary

school system. Relations between the EU and the island are also governed by the EU-

Denmark/Greenland fisheries partnership agreement (Council

Regulation (EC) No 753/2007).

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

A new Association of the Overseas Countries and Territories (including Greenland) with the European Union

The EU, the OCTs and the relevant Member States meet on

a regular basis.

A non-profit organisation

under Belgian law, 'OCTA', with representatives of permanently inhabited OCTs and of the TAAF,

was set up in 2000 to promote partnerships and develop common positions.

The Overseas Association Decision stipulates that the European Development Fund is the main source of

funds allocated to the OCTs

other than Greenland.

According to the Greenland Decision, the EU's financial assistance to Greenland is provided by the general

budget.

OCTs are eligible for EU 'horizontal' programmes (such as

COSME, Erasmus+

and

LIFE),

unless explicitly

excluded.

The European Commission is proposing to merge the current Overseas Association Decision and the

Greenland Decision into one decision on the 'Association of the Overseas Countries and Territories with

the European Union including relations between the European Union on the one hand, and Greenland

and the Kingdom of Denmark on the other'.

Comparative elements

Table 2 – Budget comparison

2018 constant prices

2014-20

(in commitments, million €)

(EU-27

estimated)

96 295

2021-27

(EU-27

proposal)

108 929

% change

Current prices

2014-20

(EU-27

estimated)

94 521

2021-27

(EU-27

proposal)

123 002

% change

Heading 6: Neighbourhood

and the world

of which:

OCTs (including

Greenland)

13 %

30 %

594

444

-25 %

582

500

-14 %

Source:

European Parliament;

based on figures provided by the Parliament's Budgets Committee secretariat.

For comparison, estimates of UK allocations are deducted from, and EDF allocations added to, the current

MFF.

Parliament's starting position

In the past, the European Parliament has

recommended

that OCT parliaments be involved in EU

decision-making for areas concerning them, such as tourism, coastal management or fishing.

Parliament has suggested that OCT representatives be informed and consulted when it comes to EU

external relations with OCT neighbouring countries (in the context of the EU-ACP institutions for

instance). It has also asked the Commission to assess the impact on OCTs carefully when negotiating

trade agreements with their neighbours. Before the European Commission presented its proposals

for the next MFF, Parliament expressed a desire for continuity in EU financial support for OCTs, in

particular through a dedicated financial instrument that would take into account their specific

circumstances (Resolution

2017/2052 (INI)

of 14 March 2018). The Commission's proposal is in line

with Parliament's starting position.

Council starting position

The priorities for the next MFF were discussed during an informal European Council meeting on

23 February 2018. The heads of state or government 'agreed that the

EU would spend more

stemming illegal migration, on defence and security, as well as on the Erasmus+ programme',

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

EPRS | European Parliamentary Research Service

dossiers that would be relevant to the OCTs, although this was not explicitly mentioned. A progress

report on the MFF would be presented at the European Council of 13 to 14 December 2018.

The

EU ministers in charge of development cooperation

had an exchange of views on the next MFF's

'Neighbourhood and the world' heading during the Foreign Affairs (Development) Council on

22 May 2018. The content of this exchange has not been disclosed.

Preparation of the proposal

In December 2017, the European Commission published a mid-term review of external financing

instruments, including the

Greenland instrument

and the

EDF,

which currently funds the other

OCTs. The reviewers judged the Greenland instrument to be relevant and effective, but regretted

the lack of data to assess 'EDF performance in OCTs' and that EDF procedures were not adapted to

OCT specificities. They also noted 'the lack of connection between EDF support to OCTs and other

forms of EU support available to these territories'. The evaluation highlighted the need for more

flexibility and coherence between instruments. In its proposal for 'a modern budget for a Union that

protects, empowers and defends' (COM(2018)321, 2 May 2018), the European Commission suggests

bringing the EDF into the general budget. As the EDF currently provides most of the EU financial

support for the OCTS (with the exception of Greenland), this would enable the resources for all the

OCTs to be merged within a single instrument. However, the Commission does not propose to

merge funds for OCTs into the broader Neighbourhood, Development and International

Cooperation Instrument (NDICI) on account of the specific relationship OCTs have with the EU and

the

specific legal basis

that relationship is based upon.

The changes the proposal would bring

The

proposal for a new decision on the association of OCTs with

the Union

is in line with the intended simplification of the next

MFF. The proposed integration of the EDF into the EU budget

would make it possible to bring together the Greenland

instrument, currently in the EU budget, with the funding for other

OCTs, currently provided by the EDF. In the 2021-2027 MFF, a new

budget line under Heading 6 would cover funding for all OCTs.

The objective of the proposal is to 'preserve what works well': its

structure is similar to the 2013 Overseas Association Decision,

with updates in respect of achievements to date and new context

(for example, reference to the UN sustainable development

goals). The main changes are that:

Figure 1 – Commission’s proposed

distribution of budgetary

allocations to OCTs

the proposal concerns all OCTs, with special arrangements

for Greenland;

funding is provided by the general budget instead of the

Data source:

European

Commission,

EDF;

the use of funds may extend over several years (article 80):

COM(2018) 461.

this derogation to the principle of budgetary annuality

Million euros, current prices,

% of €500 million (total proposed

mirrors the current situation under the EDF;

the proposal earmarks allocations for cooperation between

allocation for OCTs).

OCTs, ORs and third countries in the same region;

OCTs would be eligible for thematic programmes under the new Neighbourhood

Development and International Cooperation instrument (in addition to being eligible

for the Humanitarian Aid instrument as currently);

if adopted, the decision would be implemented after the UK has left the Union,

therefore the 12 British OCTs would no longer be covered.

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

A new Association of the Overseas Countries and Territories (including Greenland) with the European Union

In the

impact assessment

accompanying the proposal, the Commission highlights the fact that

'unity of management with all the OCTs under the same source of financing – the budget – will

create synergies in programming and implementation' and strengthen the OCTs’ shared objectives.

National parliaments

This proposal

was

scrutinised by national chambers

in nine EU countries (Germany, Ireland, Spain,

Finland, Malta, Poland, Slovakia, Sweden and the United Kingdom); none of which either raised

concerns about

subsidiarity

or transmitted important information before the deadline of

24 September 2018.

Advisory committees

The opinions of the Committee of the Regions (CoR) and the Economic and Social Committee (EESC)

on this proposal were optional. The CoR did not express an opinion, while the EESC

endorsed the

Commission’s proposal

without further comment.

Stakeholders' views

The OCTA, the Association of the Overseas Countries and Territories of the EU, made its

position

known in August 2018, in the context of the

public consultation

organised by the European

Commission. The OCTA welcomed the option to retain the main features of the cooperation and to

integrate OCT funds into the EU general budget, while retaining the flexibility of the EDF. However,

the OCTA regretted that the proposal does not sufficiently address challenges such as climate

change. It disapproved of the discrepancy between the increase in the external action budget as a

whole and the decrease in allocations for the OCTs (see Figure 2 for Parliament's calculations). The

OCTA pointed out that EU programme implementation remains a challenge. The OCTA recalled the

OCTs 'comparative disadvantages' ('size, remoteness and isolation, diseconomies of scale, limited or

inexistent industrial base, lack of economic diversification, high exposure to extremely devastating

natural hazards, etc.'). Moreover, the OCTA disagreed with the proposal to transfer responsibility for

annual reporting from the Commission to the OCTs, especially since the Commission has most of

the data, and because responsibility for annual reporting would

Figure 2 – Parliament’s proposed

impose an additional burden on OCTs.

Legislative process

This decision is not subject to the ordinary legislative procedure.

Under Article 203 TFEU, Parliament is consulted before the

Council decides by unanimity on the proposal. Parliament's

opinion is not binding. Parliament's Committee on Development

(DEVE) had a first

exchange of views

with the Commission and the

OCTA on 24 September 2018. DEVE adopted its report on

13 December 2018. Parliament voted on this report on

31 January 2019; its

resolution

takes on board DEVE’s

propositions and calls for:

reinforcing the focus on climate change and sustainable

management of natural resources;

strengthening social and human rights, such as gender

equality and education.

distribution of budgetary

allocations to OCTs

Reserve

3.5%

Regional

cooperation

12%

Tech.

assistance

3.5%

Greenland and

other OCTs

542

80%

As concerns the institutional aspects, Parliament’s opinion is that:

a stronger political dialogue between OCTs, linked Member

States and the EU should be put in place;

Data source: European Parliament,

P8-TA(2019)0053.

Million euros, current prices,

% of €669 million (total proposed

allocation for OCTs)

GRU, Alm.del - 2018-19 (1. samling) - Bilag 27: Brief fra Europa-Parlamentets research-afdeling vedr. EU associering med de oversøiske territorier.

EPRS | European Parliamentary Research Service

OCTs should be formally included in EU dialogue with their neighbouring countries;

as a rule, all EU programmes should apply to OCTs, except where OCTs are explicitly excluded;

programming and monitoring rules should take into account the limited administrative

resources of the OCTs, especially the least developed ones.

Members highlighted the need to reinforce OCTs’ resilience and competitiveness by increasing the

proposed budget for 2021-2027 to €669 million (see figure 2). They called for a more transparent

breakdown of funds between the 13 OCTs concerned.

EP SUPPORTING ANALYSIS

Key EPRS publications on the

Post-2020 multiannual financial framework,

including initial appraisals of

European Commission impact assessments.

OTHER SOURCES

Association of the overseas countries and territories with the EU including EU/Greenland/Denmark

relations 2021–2027,

Legislative observatory (OEIL), European Parliament.

ENDNOTES

There are no pre-determined criteria to define an OCT: constitutional links and the level of autonomy vary from one to

another. Their geographical location is not a determining factor: for example, Saint Martin and Sint Maarten share the

same island, but Saint Martin is a French outermost region (OR), while Sint Maarten is an OCT linked to the Netherlands.

Furthermore, the list of OCTs is annexed to the Treaties but is subject to change without the need to amend the Treaties.

Articles 355 and 356

TFEU

state that Denmark, France or the Netherlands – the UK is not listed – can ask the Council to

amend the status of an OCT (or OR) to which it is linked. This happened with Saint Barthélemy, a former French OR,

which was granted OCT status in

2012;

and conversely with Mayotte, which ceased to be an OCT in

2014

and is now a

French OR.

For OCT participation in various regional groupings, see the maps in the EPRS briefing

Le futur partenariat de l'Union

européenne avec les pays d'Afrique, des Caraïbes et du Pacifique,

July 2018 and subsequent editions.

This section aims to provide a flavour of the debate and is not intended to be an exhaustive account of all different

views on the proposal. Additional information can be found in related publications listed under 'EP supporting analysis'.

DISCLAIMER AND COPYRIGHT

This document is prepared for, and addressed to, the Members and staff of the European Parliament as

background material to assist them in their parliamentary work. The content of the document is the sole

responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official

position of the Parliament.

Reproduction and translation for non-commercial purposes are authorised, provided the source is

acknowledged and the European Parliament is given prior notice and sent a copy.

[email protected]

(contact)

www.eprs.ep.parl.union.eu

(intranet)

www.europarl.europa.eu/thinktank

(internet)

http://epthinktank.eu

(blog)

Second edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative

procedure.