Explanatory Memorandum to COM(2012)617 - Fund for European Aid to the Most Deprived

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dossier COM(2012)617 - Fund for European Aid to the Most Deprived.
source COM(2012)617 EN
date 24-10-2012


1.1. Poverty and material deprivation in the Union

Within the framework of its Europe 2020 strategy, the European Union has set itself the objective of reducing by at least 20 million the number of people in or at risk of poverty or social exclusion by 2020. Yet the economic crisis has exacerbated poverty and social exclusion, raising concerns over the social consequences for individuals and society at large.

In 2010, nearly one quarter of Europeans (116 million) were at risk of poverty or social exclusion. This is about 2 million more than in the previous year and the first figures available for 2011 confirm this trend.

While the needs of those who are at the margins of the society keep growing, the ability of Member States to support them has in many cases diminished. Social cohesion is threatened by fiscal constraints more than ever before. In many Member States it is felt that policies decided at European level are in some ways responsible for these developments.

The increasing levels of poverty impact negatively on the living conditions of European citizens, about 40 million of whom suffer from severe material deprivation. While this figure dropped markedly between 2005 and 2008, it began to rise again between 2009 and 2010, with 342 000 additional people encountering severe material deprivation in just one year.

One of the main features of material deprivation is the inability to access appropriate quantities and quality of food. The share of the Union population unable to afford a meal with meat, chicken or fish (or vegetarian equivalent) every second day – something which is defined as a basic need by the World Health Organisation – was 8.7% in 2010, i.e. more than 43 million persons and the first figures available for 2011 indicate a worsening trend.

A particularly severe form of material deprivation going well beyond food deprivation is homelessness. The extent of homelessness is difficult to quantify, but, estimations indicate that there were 4.1 million homeless people in Europe in 2009/2010. A recent increase in homelessness is due to the social impact of low and uneven growth and rising unemployment. Even more worryingly, a new profile of homeless people is emerging which consists of families with children, young people and people with a migrant background.

There are 25.4 million children at risk of poverty or social exclusion in the Union. Overall, children are at greater risk of poverty or social exclusion than the rest of the population (27 % against 23 %). This exposes them to material deprivation going beyond (poor) nutrition. For example, 5.7 million children have to go without new (not-second hand) clothes and 4.7 million do not have two pairs of properly fitting shoes (including a pair of all-weather shoes). Children suffering from these forms of material deprivation are less likely than their better-off peers to do well at school, enjoy good health and realise their full potential as adults.

1.2. The Union's response to poverty and material deprivation

The main Union's instrument for supporting employability, fighting poverty and promoting social inclusion is and will remain the European Social Fund (ESF). This structural instrument invests directly in people and their skills and aims at improving their labour market

opportunities. Yet some of the most vulnerable citizens who suffer from extreme forms of poverty are too far removed from the labour market to benefit from the social inclusion measures of the ESF.

The EU's Food Distribution programme for the Most Deprived People (MDP) has for more than two decades provided food aid for those persons. It was created in 1987 to make meaningful use of agricultural surpluses, which might otherwise have been destroyed, by making them available to Member States wishing to use them. Over the years, the scheme became an important source of provisions for organisations working in direct contact with the least fortunate members of society, providing them with food. The expected depletion and high unpredictability of intervention stocks over the period 2011-2020, as a consequence of successive reforms of the Common Agricultural Policy, has deprived the MDP of the original rationale underpinning it and it will be discontinued at the end of 2013.

However, material deprivation still causes serious problems and there continues to be a need for EU assistance to the society’s most deprived persons. In its proposal for the next multiannual financial framework the Commission has reflected this and reserved a budget of € 2.5 billion for a new instrument designed to fight extreme forms of poverty and exclusion.

Against this background, the proposed Regulation establishes for the period 2014-2020 a new instrument that will complement the existing cohesion instruments and notably the European Social Fund, by addressing the worst and most socially corrosive forms of poverty, food deprivation as well as homelessness and material deprivation of children while supporting accompanying measures aiming at the social reintegration of the most deprived persons of the Union.






2.1. Position of interested parties

Discussions in the Council and the European Parliament and with civil society and local authorities on the current forms of aid for the most deprived under the MDP programme have provided meaningful insights and ideas for the future. Moreover, the Commission has been open to stakeholders' views and consulted EU-level umbrella organisations representing both deliverers of food aid and the end recipients.

The potential significant cut in the support provided under the MDP scheme in 2012 was heavily criticized by civil society organisations, with regional and local authorities' representatives stressing the importance of this support and pleading for its continuation at a time when needs are increasing.

Large charities and civil society organisations representing food banks, as well as organisations working with children and homeless people have expressed repeatedly the need for public and specifically EU support.

Two meetings with umbrella associations of organisations representing not only the beneficiaries but also the actual end recipients were held. In general the organisations welcomed the possible broadening of the scope of the instrument beyond food aid and the idea of a people-centred approach.

Member States views about such an instrument are divided: seven Member States have expressed their opposition to continuation of the MDP beyond 2013. Other Member States have argued strongly in support of the scheme. Thirteen Member States issued a statement in December 2011, in which they requested continuation of the MDP post-2013.

The European Parliament has repeatedly expressed strong support for the continuation of the food aid programme in the interest of better social cohesion in Europe.

In December 2011, eleven umbrella organisations wrote to Commissioner Andor and the Director General for Employment, Social Affairs and Inclusion asking for progress to be made towards an EU Homelessness Strategy. In addition, the European Parliament called for such a strategy - first in a Written Declaration (2010) and then in a Resolution (2011).

The Compact for Growth and Jobs adopted by the European Council on 29 June 2012 notes that "in the implementation of the country-specific recommendations, Member States will put particular emphasis on tackling unemployment and addressing the social consequences of the crisis effectively […and] developing and implementing effective policies to combat poverty and support vulnerable groups".

2.2. Impact assessment

The core issue examined by the impact assessment concerned the scope of the new instrument. The options considered were (0) no funding, (1) a successor instrument to the current MDP limited to dispensing food aid, (2) an instrument which would complement the distribution of food aid with support for accompanying measures aiming at the social inclusion of the food aid recipients, and (3) a comprehensive instrument supporting material relief in terms of food, goods for homeless people and goods for materially deprived children, combined with accompanying measures aiming at the social reintegration of the most deprived persons.

The net impact of option zero depends on how the funds made available are reallocated. But it would certainly be seen as attesting to an erosion of solidarity in Europe at a time when poverty is increasing. Compared to option one, option two and even more so option three entail a reduction of the food aid distributed as some resources are allocated to other types of actions. However, the accompanying measures should also ensure greater sustainability of the results achieved. Option three is preferred because it best allows tailoring the supported interventions to local needs.


EU action is justified on the grounds of Article 174 (TFEU) which provides for the Union to 'promote its overall harmonious development' by 'developing and pursuing its actions leading to the strengthening of its economic, social and territorial cohesion', and on Article 175 (TFEU) which specifies the role of the EU structural funds in achieving this objective and makes provisions for the adoption of specific actions outside the Structural Funds.

EU-level action is necessary given the level of poverty and social exclusion in the Union and the unacceptable diversity of the situation among individual Member States, further aggravated by the economic and fiscal crisis, which has led to a deterioration of social cohesion and lessened the chances of achieving the Europe 2020 strategy's objective in relation to the fight against poverty and social exclusion.

European financial support helps to catalyse action at national level, coordinate efforts and to develop and introduce instruments to promote social inclusion. It allows the Union to lead by example.


The Commission proposal for a multi-annual framework envisages an amount of EUR 2.5 billion, within cohesion policy, for the period 2014-2020.

In accordance with article 84(3) of Regulation EU Nº … (CPR), the support to a Member State through the Fund shall be considered as part of the share of the Structural Funds allocated to the European Social Fund.

Proposed budget 2014-2020 EUR billion

Cohesion Policy (Structural Funds)

Of which Fund for European Aid to the Most Deprived





*All figures are in constant 2011 prices

5. Content of the regulation

5.1. Objectives and scope

The general objective of the Fund for European Aid to the Most Deprived (the Fund) is to promote social cohesion in the Union by contributing to the achievement of the Europe 2020 strategy's objective of reducing by at least 20 million of the number of people in or at risk of poverty and social exclusion.

This translates into the specific objective of supporting national schemes which provide non-financial assistance to the most deprived persons through partner organisations.

In terms of scope, the Fund addresses food deprivation, homelessness and material deprivation of children. Each Member State may choose to address one or more of these forms of deprivation. It may also support accompanying measures, complementing material support, to contribute to the social reintegration of the most deprived persons.

5.2. Eligible population and targeting

The population eligible to receive material assistance are the most deprived persons of the Union. Definition of the criteria for identifying the most deprived persons to be assisted will be the responsibility of the Member States or the partner organisations since they are best placed to target the assistance taking local needs into account.

By defining the type of goods that will be distributed, namely food or basic consumer goods for personal use of homeless persons or of children, the Regulation also contains an indirect targeting mechanism.

5.3. Partner organisations

The partner organisations are the ones that deliver directly or indirectly the food or goods to the most deprived persons. In order to ensure that the Fund will contribute to sustainable reduction of poverty and to improvement of social cohesion, the partner organisations that deliver directly the food or goods will themselves have to undertake activities complementing the provision of material assistance, aiming at the social integration of the most deprived persons. The Fund itself may support such accompanying measures.

The national authorities may either purchase the food or goods or make them available to partner organisations or provide the partner organisation with funding for the purchase of the food or goods. If the purchase of food or goods is undertaken by a partner organisation, it can either distribute the items itself or entrust the distribution to other partner organisations.

5.4. Implementation provisions

The Fund will be implemented following the model of cohesion policy, i.e. through shared management on the basis of one 7-years operational programme per Member State covering the period 2014 to 2020.

The Regulation follows the approach of the structural funds in terms of implementation arrangements, allowing notably the Member States to use, if they so wish, the structures, designated authorities and procedures set up for the European Social Fund, in order to minimize the administrative burden related to the transition from the current scheme for distribution of food to the most deprived persons to the new Fund for European Aid to the Most Deprived. The provisions relating to programming, monitoring, evaluation and information and communication are, however, streamlined and simplified in order to be commensurate to the specificity of the objectives and target populations of the Fund.

The eligibility rules are also designed to take into account the nature of the Fund and of the various actors that will be involved in its implementation. In particular, the Regulation provides for simplified cost methods for the majority of categories of expenditure and opens options for the others categories.

The financial management and control system equally derives from the structural funds logic. Also, some provisions have been adapted and simplified to be fully adequate to the types of operations that will be supported by the Fund, notably in terms of pre-financing, content of the payments applications to the Commission as well as proportional control.

The partner organisations have a limited capacity to advance the funds necessary. Equally, the Member States may have difficulties to mobilise the resources necessary to pre-finance the operations. In addition, the Member States facing the greatest fiscal constraints are likely to be those with the highest number of most deprived people. In order to address this situation, that could put at risk the achievement of the Fund's objective, the level of pre-financing is set at 11% of the total allocation to a Member State. This will allow covering up to 90% of the costs of the first year's aid campaign not counting technical assistance, transport, administrative costs and the accompanying measures.