The French outermost regions: a real financial support from the EU?July 17, 2019
The French outermost regions: a real financial support from the EU?
Funding Scheme: 2019-07-17
The outermost regions (ORs) of the European Union (EU) are territories located outside the European Continent and characterised by an economic and social situation “aggravated by their remoteness, insularity, small size, difficult topography and climate, their economic dependence on a small number of products, factors whose permanence and combination seriously hamper their development” (Article 349 of the TFEU). There are 9 ORs: 2 Portuguese archipelagos, the Azores and Madeira, 1 Spanish archipelago, the Canary Islands, as well as 6 French ORs, French Guiana, Martinique, Guadeloupe, Saint-Martin, La Reunion and Mayotte.
French overseas territories: Facing difficult economic and social situations
The 6 French ORs also have a special status under French law: they are Overseas Departments and Regions (DROMs) – for Martinique, Guadeloupe, French Guiana, La Reunion and Mayotte – and an Overseas Collectivity (COM) – for Saint-Martin.
They face 2 major challenges that require the implementation of specific funding policies:
- First of all, the economy: trade balances are in deficit (12,357 billion imports compared to 1092 billion exports in 2017) and their economic activity – mainly concentrated on tourism – faces difficult competition.
- Also a social challenge: the unemployment rate is higher than in France (22.3% compared to 9.4% in 2017), with low professional integration of young people (45.9% of unemployed among 15-24 year olds compared to 22.3% in France).
The European strategy for French overseas: many financial opportunities
In 2017, the European Commission published its new strategy for the ORs, “A renewed and strengthened strategic partnership with the outermost regions of the European Union”, which proposes, in particular, to adapt the financing instruments to support economic development and improve the social situation in these territories. Guadeloupe, Martinique, Saint-Martin, French Guiana, Mayotte and La Reunion are therefore a priority for the EU. Also, for the period 2014-2020, there are many European funds from which they can benefit:
- The 4 European Structural and Investment Funds (ESIF): the ERDF, ESF, EMFF et EAFRD for a total budget of nearly 5 billion euro for the 6 French ORs.
- The European Territorial Cooperation programmes, in particular the INTERREG Caribbean programme for French Guiana, Martinique, Guadeloupe and Saint-Martin – with a budget of over 85 million euro – and the INTERREG Indian Ocean programme for Reunion Island and Mayotte – with a budget of almost 75 million euro.
- Sectoral funds, in particular the Horizon 2020 programme for research and development (with a total budget of 79 billion euro), the LIFE programme for environment and climate change (with a total budget of 3.5 billion euro), and the European Development Fund for support to ACP countries (with a total budget of 30.5 billion euro).
- The Juncker Plan and the European Fund for Strategic Investments, which finance in particular Roland Garros airport in Reunion Island and Point-à-Pitre airport in Guadeloupe, but also the development of 4G coverage in Mayotte.
What about the use of structural funds in French overseas?
Despite the substantial budget, French overseas faced a number of difficulties in implementing their development strategies for the period 2014-2020. As in the other French regions, their difficulties include territorial reforms – the establishment of DROMs and COMs – and the transfer of responsibility for managing authority from the State to local authorities. In June 2019, the 6 French ORs thus achieved an average payment rate of only 18.7% of the total appropriations allocated to them for the ERDF and ESF programmes – against 25% at national level.
However, these difficulties did not prevent French overseas from taking advantage of the EFIF to pursue their territorial development, such as: for the construction of the ACTe Memorial (see Photo) or the rehabilitation of the Blanchard gross landfill site in Guadeloupe; for the installation of right-of-way public transport (TCSP) or the implementation of the “Atout inclusion” scheme in Martinique; to support the “Broadband” project or the construction of the business village in French Guiana; to finance the photovoltaic electricity production plant or the “Nouvelle route du Littoral” in La Reunion; or to help social and solidarity economy actors with the “Essor” project or co-finance the construction of the Petite Terre hospital in Mayotte.
Therefore, French overseas now present two major opportunities: the first one is for project applicant to position themselves on the funds still available until the end of the programming period on 31/12/2020. The second one is for local authorities to take advantage of the Commission’s willingness to strengthen the EU’s investment strategy in the ORs for 2021-2027 and therefore to use the future increase in funds to pursue the development of their territories.