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The European Union Solidarity Fund

Its legitimacy, viability and efficiency

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Abstract

This paper examines the legitimacy, viability and efficiency of the European Union Solidarity Fund by asking whether the Fund meets its stated purpose of providing solidarity within the EU, whether it is sufficiently capitalized and if it promotes disaster risk reduction in Europe. In examining these questions, we make use of ADAM models of disaster risks throughout Europe. We conclude that the Solidarity Fund falls short on all three counts, and we suggest possible alternatives. Most far-reaching, we explore whether the EUSF could support insurance systems in Europe by, among other possible activities, capitalizing national public-private insurance programs and providing support for government risk transfer. This would leverage the Fund’s capital and would overcome barriers to the provision of private and public sector insurance in uncertain catastrophe markets. It would also make insurance more affordable to Europe’s most vulnerable communities. Finally, it would reduce the disincentives for risk reduction inherent in post-disaster assistance.

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Notes

  1. However, the distributions are skewed and therefore these numbers must be treated with caution.

  2. It should be noted, that this is an imperfect measure of epistemic uncertainty and likely underestimates the losses.

  3. For a detailed discussion see Hochrainer and Pflug (2010).

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Authors and Affiliations

  1. International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria

    Stefan Hochrainer, Joanne Linnerooth-Bayer & Reinhard Mechler

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  1. Stefan Hochrainer
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  2. Joanne Linnerooth-Bayer
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  3. Reinhard Mechler
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Correspondence to Stefan Hochrainer.

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Hochrainer, S., Linnerooth-Bayer, J. & Mechler, R. The European Union Solidarity Fund. Mitig Adapt Strateg Glob Change 15, 797–810 (2010). https://doi.org/10.1007/s11027-009-9209-2

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