On 15 July, the Fisheries Council adopted an emergency package to tackle the fuel crisis in the fisheries sector, providing an extra €600 million in support of the European fishing industry.
According to the Commission, the current crisis in the fishing sector is caused by falling fish prices, delays in reducing the size of the European fishing fleet and rocketing fuel prices.
To respond to the financial/fuel crisis, the European Commission proposed a package of restructuring measures earlier in July (COM(2008)453 and COM(2008)454). Now, the Council has adopted it by qualified majority. It was not a unanimous decision. Sweden voted no to what was considered to be a short term solution, recognizing that the main reason for the low profitability is that there are too many vessels and not enough fish.
Higher fuel prices are just aggravating this problem. Diminishing stocks have led fishermen to go further and deeper to find fish, often using fuel-intensive fishing techniques. As a result they use more fuel per kilo of landed fish, leading to a destructive circle of higher costs and ever more depleted fish stocks.
The emergency package is meant to promote the restructuring of those segments of the fishing fleet which has been hardest hit by the fuel crisis. It aims at reducing the overcapacity and promoting a shift to less fuel intensive fishing techniques. But the package has been criticized for a lack of analysis of the long-term consequences and several of the measures are potentially counterproductive, for example:
· Provision of subsidies to buy new, more energy-efficient engines is likely to instead contribute to an increase in fishing capacity since proper control of horse power is difficult and new, improved engines may well result in capacity increases. A long-term solution should rather be sought among fishing techniques with a low energy consumption and minimal impact on the marine environment.
· The agreed partial decommissioning schemes for fishing vessels include the possibility to reallocate 25 % of the fishing capacity “permanently withdrawn” to new vessels. This comes close to reintroducing subsidies for vessel construction, which were phased out after the reform of the Common Fisheries Policy Reform in 2002.
The package also includes financial compensation to fishermen while vessels are tied up in the harbour. Overall, the agreed measures may help fishermen cope with short-term pressures but do not result in a longer-term strategy for the sector. On the contrary, there is a risk that these measures will instead contribute to increased pressure on the fish stocks.
To make matters worse, the European Commission also opens up the possibility for individual countries to provide further national support to its fishermen.
The proposed increase in state aid is in fact a policy contradiction by the Commission, which has earlier stated that public intervention to compensate for an increase in fuel costs would be incompatible with the Treaty. The support given to the fisheries sector might now also be demanded by other sectors affected by the rising fuel costs, such as transport and agriculture. The European Commission has also committed itself to removing environmentally damaging subsidies and the Commission has announced that by 2008 it would put forward a roadmap for the reform of these subsidies with a view to eliminating them.
Possible changes to the de minimis rules for the fisheries sector, social aid in the form of decreased social security contributions and the scope for additional funding outside of the EFF (European Fisheries Fund) are also being examined.