Challenges of instruments that should tackle multi-hazard and multi-risk situations: an assessment of the recent reforms of the European Solidarity Fund and the Solidarity and Emergency Aid Reserve

The European Union has some dedicated tools and mechanisms available to respond to natural hazard events including the European Union Solidarity Fund (EUSF). It follows the objective of granting financial assistance to Member States in the event of a major disaster with serious consequences. In the latest EU long-term budget plan—the Multiannual Financial Framework 2021–2027—the EUSF was merged with the Emergency Aid Reserve (EAR) to form the new Solidarity and Emergency Aid Reserve (SEAR). One additional significant change was made in 2020 which saw an extension of the scope of the EUSF. This extension allowed the EUSF to cover losses incurred due to major public health emergencies such as the COVID-19 pandemic. It is therefore now a multi-hazard and multi-risk financing instrument designed to financially assist during the emergency phase in case of an emergency event. We assess the consequences of these changes in the light of potential advantages as well as disadvantages compared to the prior EUSF structure. The results will be used to provide some policy recommendations as to how to move forward with the identified challenges. We especially recommend separating the EUSF from the coverage of large-scale public health emergencies and the emergencies covered by the EAR. Instead, we suggest establishing a new flexibility instrument that covers emergencies such as public health related ones as well as the ones within the EAR. The analysis gives some important insights, scientific as well as policy wise, about advantages as well as limitations of financial instruments that simultaneously should tackle different types of hazards and risks.