The strategy, governance and functioning of the Council of Europe Development Bank
Reply to Recommendation
| Doc. 12565
| 07 April 2011
- Committee of Ministers
at the 1110th meeting of the Ministers’ Deputies (30-31 March 2011) 2011 - Second part-session
- Reply to Recommendation
- : Recommendation 1937
The Committee of Ministers has examined
with interest Parliamentary Assembly Recommendation 1937 (2010)
on “The strategy, governance and functioning of the
Council of Europe Development Bank”. It has brought the recommendation
to the attention of member states’ governments and transmitted it
to the Council of Europe Development Bank (CEB) and to the European
Co-ordination Forum for the Council of Europe Disability Action
Plan 2006-2015 (CAHPAH), the comments of which have largely contributed
to this reply.
2 In response to the various recommendations enumerated in the
Assembly’s text, the Committee of Ministers would inform the Assembly
of the following:
3 Points 11.1.1. to 11.1.5: As regards points 11.1.1. to 11.1.5.,
the CEB is currently examining the governance issues in the framework
of its Strategic Review on the basis of the recommendations of the
report on the CEB by the Group of Eminent Persons. The results of
this exercise will be reported in due time.
4 Point 11.1.6.: The Ex-Post Evaluation Department (DEP) Director
addresses an annual activity report to the Governor, who transmits
it to the Administrative Council and the Governing Board. The DEP
Director specifically participates in those meetings of the aforementioned
organs where said activity report is tabled.
5 Point 11.2.1.: The possible
transfer of some secretarial functions from the Secretariat of the
Partial Agreement to the CEB services in Paris could be reviewed
in the context of the overall reforms at the Council of Europe.
6 Point 11.2.2.: The CEB regularly attends Ministerial Conferences
(in particular on social cohesion, health, cultural heritage, spatial/regional
planning) and high-level meetings of the Council of Europe in order
to provide information to the decision makers on the possibilities
for financing. The CEB also participates in meetings of Council
of Europe Steering Committees. Within the context of the regular
project related work between the CEB services and the Secretariat
of the Partial Agreement on the CEB (in charge of the preparation
of the Admissibility Opinions of the Secretary General on the projects),
meetings were organised, in particular, on projects in the new sector
of action “Infrastructure of administrative and judicial public
services”. These were attended by CEB representatives and the competent
services of the Council of Europe and proved to be useful in the
preparation of projects aimed at the refurbishment and construction
of prisons, adopted in favour of Bosnia and Herzegovina, “the former
Yugoslav Republic of Macedonia” and Ireland.
7 Contacts between the Special Representatives of the Secretary
General and the CEB representatives travelling to different countries
were also intensified so as to provide exchange of information on
the situation in the field. In addition, representatives of the
CEB and of the Secretariat of the Partial Agreement CEB make regular
presentations on the possibilities for financing offered by the
CEB to the relevant Council of Europe bodies.
8 Point 11.2.3: The Committee of Ministers has taken note of
the readiness of the CEB to provide expertise to the Management
Committee of the Pension Reserve Fund, and assist the Council of
Europe in defining the investment policy of the Fund’s assets. In
this respect it notes that the expertise of the CEB on financial
matters relate for the most part to first category bonds which constitute
its major investment and placement instrument. Any consulting activity
of CEB would thus be limited to this type of mechanism.
9 Point 11.2.4: The Committee of Ministers has noted with satisfaction
that the CEB now counts 40 member states. It would encourage those
member states which are not yet members of the Partial Agreement
to consider accession.
Point 11.2.5: The Committee of Ministers is aware of the fact
that the CEB is a powerful instrument for providing adjustments
required for the integration of persons with disabilities in society.
It has noted that in the period 2007-2010, the CEB approved 19 projects
(eight of which in Target Group countriesNote
) in the sectors of health,
education and social housing with specific sub-projects devoted
to initiatives for people with disabilities.
11 The Council of Europe Disability Action Plan 2006-2015 (Recommendation
Rec(2006)5 of the Committee of Ministers to the member states) recommends
the CEB to member states’ governments as one of the tools they could
use to implement the Plan's provisions. Recommendation CM/Rec(2010)2
of the Committee of Ministers to member states on deinstitutionalisation
and community living of children with disabilities indicates the
types of projects that should be funded and the types of projects
for which funding should be avoided, where disabled children are
concerned. This recommendation was transmitted to the CEB and is
duly taken into consideration.
12 The CEB has taken steps to familiarise delegates of the member
states with the Bank, its requirements and conditions and the procedure
for granting loans. In order to build its potential as a financial
body geared to social and inclusive action, the Bank has also participated
in several conferences in this area, including the Disability Action
Plan launch conference in St Petersburg, September 2006, and the
mid-term review conference in Istanbul, December 2010. The Committee
of Ministers has noted with satisfaction that at present six countries
have used or will use CEB funding for projects connected with the
Disability Action Plan, whilst others are still considering such
13 Point 11.3.1: The outstanding of indirect loans through intermediary
banks (also called transit loans) is progressively decreasing: as
of 30 September 2010, it represented 861 million Euros, i.e. 7.2%
of the total loan outstanding, down from its peak reached end of
2009 at 907 million Euros. In addition, the demand originating from
intermediary banks in favour of their subsidiaries in target group
countries has fallen dramatically with the banking and financial
crisis. Besides, as the majority of the residual demand corresponds
to refinancing needs rather than new investment projects, it is
not eligible for CEB financing. As to the financing conditions applied by
the intermediaries, close attention is paid to this aspect, not
only upstream during the instruction process but also downstream
when monitoring the implementation of the project.
14 Point 11.3.2: The CEB promotes the replication of high value
added projects in its sectors of action, whenever feasible. In this
regard, the development of a specific expertise and a capacity to
learn lessons from its activity is essential to support this objective.
Currently, based on its expertise, the CEB is preparing and developing
a number of projects in target group countries in the sector of
infrastructure of administrative and judicial public services. Beyond
this, the CEB also pursues this objective for the benefit of target
group countries, in co-ordination with the European Commission,
in the sector of urban renewal (Jessica initiative) and in energy
15 Finally, upon completion of a series of ex-post evaluations
in a given sector of intervention of the CEB, the Ex-Post Evaluation
Department prepares a synthesis of the said evaluation reports which
draws together the lessons learned and formulates recommendations
pertaining to the CEB’s interventions in the given sector. This
helps fostering high value added projects’ replication in the CEB’s
countries of intervention.
16 Point 11.3.3: When initiating
the appraisal or instruction of a complex project, the CEB encourages
a phased approach, on the one hand, in order to facilitate its design
and its monitoring but also, on the other hand, to ascertain the
absorption capacity of the borrower. This has been the case in strategic
sectors of intervention such as the health sector and for major
reconstruction projects related to the mitigation or prevention
of natural disasters.
17 It should also be noted that, for projects financed through
different international financial institutions (IFIs) – as it is
encouraged in the Western Balkans Investment Framework, cooperation/coordination
with other IFIs is essential in order to maximise the respective
impact of the different stakeholders. As already mentioned under
11.3.2, lessons learned from ex-post evaluation reviews is a useful
tool to enhance the continuity and impact of the CEB’s intervention.
18 Point 11.3.4: As requested in the Action Plan following the
2005 Warsaw Summit, the CEB is also working in the new sector of
action “Infrastructure of administrative and judicial public services”
and has adopted loans for a total of €190 million in favour of the
refurbishment and construction of prisons, namely in Bosnia and
Herzegovina and “the former Yugoslav Republic of Macedonia” as well
as in Ireland. The CEB also works in this area through the Human
Rights Trust Fund which aims to support Council of Europe member states
in respecting the European Convention on Human Rights and other
Council of Europe human rights instruments. This Fund, co-financed
by the governments of Norway, Germany, the Netherlands and Finland, has
financed grants to five projects for a total amount of €3.2 million.
19 Point 11.3.5: The CEB
provides technical assistance for the preparation of project feasibility
studies, both through its own funds as well as through two Trust
Accounts established for that purpose.
20 The Norway Trust Account (NTA), set up at the end of 2003
on the initiative of the Norwegian authorities, had enabled support
for 34 initiatives totalling €2.8 million in a number of different
eligible sectors. Fifty-nine percent of the NTA resources allocated
were used for direct support to CEB projects, either for preparatory
or feasibility studies or to strengthen the implementation capacity
of the institution or ministry in charge of the project in the beneficiary
21 Since 2009, the CEB also uses the Spanish social cohesion
account, set up on the initiative of the Spanish authorities, and
which is used, more specifically, to finance technical assistance
in favour of CEB projects, mainly in the 21 Central, Eastern and
South-Eastern European countries that constitute its target group.
22 Point 11.3.6: In terms of corporate communication, the CEB
tries to promote the principle of transparency while keeping in
consideration its very modest financial and human resources. Therefore,
its activities revolve around a digital medium, the website, and
a presentation brochure. These two are available in both official
languages of the CEB, English and French. In addition, the home
page of the website has been rebuilt in 2010, with the intention
of facilitating access to all the information it contains.
23 To advertise its actions further, and to a wider audience,
the Bank also made, in 2008, a short film presenting its work. It
can be watched from the Bank website, not only in English and French,
but also in German, Spanish, Italian and Portuguese, as well as
in several languages of the target group countries (Polish, Romanian,
Turkish and very soon Hungarian). Finally, the Bank envisages for
2011, as recommended by the Assembly, to provide the presentation
brochure, and some of the thematic booklets, in several languages
of target group countries.
24 Point 11.3.7: The CEB
continues its long standing effort to increase the number of nationalities
within its teams. During the first nine months of 2010, the CEB
recruited 11 staff members from seven different member states. At
the end of the third quarter of 2010, 26 nationalities, representing
95% of the Bank’s capital, were represented amongst the staff.
25 Also, the CEB pays particular attention to gender equality,
particularly at the senior management level. A woman was appointed
at the head of the Ex-Post Department in 2009 and another as Director
for Human Resources in 2010. In addition, 75% of A grade recruitments
in 2010 have been women. Finally, the number of women holding an
A grade position has increased by 10% between the beginning of 2008
and the end of the third quarter of 2010.
26 Point 11.3.8: To ensure
a good co-ordination between departments and in accordance with
the principle of collegiality, the CEB has created a set of inter-department
committees which deal with all the dimensions of its activities.
The most important of these, the General Management Committee, which
involves directors, aims at examining strategic matters involving
the whole CEB.
27 In addition, the CEB has created functions to co-ordinate
the different departments in strategic domains. Thus, the CEB has
appointed in 2008 a Director for European Affairs, whose role is
to oversee the Bank’s co-operation with the European Union. The
CEB also appointed, in 2010, a Co-ordinator in charge of energy efficiency
to unite the efforts of the departments implicated on this issue.
28 Finally, the Committee of Ministers has taken due note of
the Assembly’s request to regularly inform it about the CEB’s activities