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Challenges for the Council of Europe Development Bank

Doc. 13513: compendium of written amendments | Doc. 13513 | Final version

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ADraft Resolution

1As the financial and economic crisis still haunts Europe, many countries are struggling to restore growth, employment and living standards to pre-crisis levels. With austerity measures and chronic underinvestment entrenched, social suffering has reached unprecedented levels. In these harsh times, multilateral development banks – such as the Council of Europe Development Bank (hereafter “CEB” or “the Bank”) – are key partners in sustaining public, social and economic investments, notably in areas where the private sector alone would not venture to go.
2The extremely uncertain economic situation and new regulatory constraints have prompted the CEB to adapt, as necessary, its priorities, working methods, internal structures and governance in order to deliver “more with less”. The Parliamentary Assembly welcomes the Bank’s capital increase (effective from the end of 2011), efforts to expand its membership and to boost the social added value of projects, as well as steps to adjust internal structures and strategies. The implementation of the Development Plan for 2010-2014 and the adoption of a new Development Plan for 2014-2016 are crucial to the Bank’s continued success.

25 June 2014

Tabled by Ms Deborah BERGAMINI, Ms Elena CENTEMERO, Mr Francesco Maria GIRO, Mr Giuseppe GALATI, Mr Claudio FAZZONE

Votes: 5 in favor 44 against 2 abstentions

In the draft resolution, replace paragraph 2 with the following paragraph:

"The extremely uncertain economic situation and new regulatory constraints prompt the CEB to adapt, as necessary, its priorities, working methods, internal structures and governance in order to deliver "more with less" and to face the challenges posed by the present economic situation, which changed the usual patterns of social crisis. Today, in fact, the fault lines that jeopardise social cohesion no longer follow the boundary dividing eastern and western Europe, but cut a jagged path through the continent as a whole. In light of the above, the Assembly believes it is time for a review of the CEB's strategies, which have hitherto been focused on achieving goals oriented to specific geographical areas. The CEB should instead adjust its intervention policy to favour specific areas of action over geography. With a view to the more effective integration of its funding with the financial instruments of the EU, it should also promote the standardisation of the criteria used for the allocation of funds and set priorities with reference to the regional rather than the national boundaries of member states. The Parliamentary Assembly welcomes the Bank's capital increase (effective from the end of 2011), efforts to expand its membership and to boost the social added value of projects, as well as steps to adjust internal structures and strategies. In this regard, the Assembly invites the CEB to enhance the transparency of its activities, including through the online publication of the value and destination of its investments."

3The Assembly notes the Bank’s continued commitment to preserving the level of lending to the neediest countries (notably those outside the European Union) without undermining its own risk profile, stable performance and profitability. The Assembly appreciates the fact that, despite the grim economic situation, no member State has failed to pay back loans, helped by the Bank’s willingness to and assistance in redesigning some ongoing projects to help countries in budgetary difficulty. Although the demand for CEB loans temporarily decreased between 2011 and 2013, the interest in new projects is picking up again, with a strong emphasis on employment-support measures.

25 June 2014

Tabled by Ms Deborah BERGAMINI, Ms Elena CENTEMERO, Mr Francesco Maria GIRO, Mr Giuseppe GALATI, Mr Claudio FAZZONE

Votes: 3 in favor 47 against 3 abstentions

In the draft resolution, replace paragraph 3 with the following paragraph:

"The Assembly appreciates the fact that, despite the grim economic situation, no member State has failed to pay back loans, helped by the Bank's willingness to and assistance in redesigning some ongoing projects to help countries in budgetary difficulty. Although the demand for CEB loans temporarily decreased between 2011 and 2013, the interest in new projects is picking up again, with a strong emphasis on employment-support measures. The Assembly notes that in order to achieve the objectives of the Europe 2020 strategy, EU member States are encouraged to supplement the Union's resources with funding from the Council of Europe Development Bank (CEB). One of the strategic objectives of the CEB's 2014-2016 Development Plan is to work hand in hand with member States to help them make better use of European structural funds, starting with the European Social Fund. The European Social Fund allocates a minimum amount of investment to each EU member State and specifies that the remainder is to be distributed according to regional rather than national needs, an approach that allows for differences in wealth levels, which may be considerable, within countries."

4The Assembly believes that there is still much room for strengthening the CEB’s ties with the Council of Europe, with a view to maximising its impact and its comparative advantage. Niche activities with high social value should be further expanded. They concern in particular sectoral priorities – such as investment in administrative and judicial public services, small-scale health-care projects, social housing and asylum centres – and a geographical focus on non-European Union countries in South-Eastern Europe.

25 June 2014

Tabled by Ms Deborah BERGAMINI, Ms Elena CENTEMERO, Mr Francesco Maria GIRO, Mr Giuseppe GALATI, Mr Claudio FAZZONE

Votes: 49 in favor 5 against 2 abstentions

In the draft resolution, paragraph 4, delete the following words: "- and a geographical focus on non-European Union countries in South-Eastern Europe."

5Noting the Bank’s increased emphasis on employment-related support, and its intention to launch innovative financing for essential public services, the Assembly considers that the CEB could expand its participation in underpinning public–private undertakings for vocational training, skills development, professional counselling and job placement for young people. As appropriate, this support might usefully be extended to other vulnerable groups, such as persons with disabilities, minorities and displaced or migrant persons.
6The Assembly stresses the importance of direct contacts between the Bank and the parliamentary representatives of European States for enhancing the visibility of the CEB’s work and potential. National parliaments can play a most valuable role in promoting domestically project initiatives for potential financing by the CEB. The Assembly also invites the parliaments of Andorra, Armenia, Austria, Azerbaijan, Monaco, the Russian Federation, Ukraine and the United Kingdom to press their respective national governments to consider joining the CEB at the earliest opportunity.

In the draft resolution, at the end of paragraph 6, add the following words: "Finally, the Assembly invites all its members to advocate a change in the bylaws of the CEB that would enable it to implement policies of financial support and provide direct funding to public bodies and agencies without relying on the intermediation of private banks."

7In the light of the above considerations, the Assembly recommends that the Governing Board of the Council of Europe Development Bank:
7.1with a view to continued rationalisation of the CEB’s governance:
7.1.1urge member States to enhance the co-ordination of national positions taken by their representatives on the Bank’s collegial bodies (Administrative Council and Governing Board) and strive to reach consensus within the Governing Board by actively looking for compromise solutions;
7.1.2build a graduated approach to tackling pending governance issues by organising informal consultations among the members on various reform options and a timetable;
7.1.3in line with recommendations in the CEB Strategic Review of 2008, adjust statutory provisions or agree on their interpretation in a more flexible way so as to streamline decision-making structures;
7.1.4simplify the voting system in the Governing Board, including for decisions on the appointment of top officials;
7.1.5entrust the Governor of the Bank, seconded by vice-governors whenever necessary, to chair the meetings of the Administrative Council after the mandate of the latter’s current chair expires;
7.1.6make the Governor of the Bank the CEB’s external representative;
7.1.7in addition to the Secretary General of the Council of Europe, associate closely and invite the Council of Europe Commissioner for Human Rights and the President of the Parliamentary Assembly, as well as the parliamentary rapporteur on the CEB, to the annual meetings of the Governing Board and the joint meetings of the collegial bodies;
7.1.8consider holding one of its meetings each year in Strasbourg;
7.2in order to further increase project quality and the pertinence of project proposals emanating from member States, ask the CEB’s Governor to ensure that the Bank:
7.2.1strengthens its links with the Office of the Commissioner for Human Rights and systematically takes into account the findings of the Commissioner’s country visits;
7.2.2fully exploits complementarities and synergies with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and, whenever appropriate, other international financial institutions;
7.2.3assists member States concerned in building their capacity to absorb European Union structural funds, in particular for developing projects in priority sectors such as the judiciary, small-scale health-care projects, social housing, asylum facilities, Roma integration and employment-related services for young people, people with disabilities, minorities and migrants;
7.2.4enhances recourse to the combination of loans and grants for the support of projects with the highest social-impact potential;
7.2.5strengthens the monitoring and evaluation of the impact of the projects financed in the field of employment in terms of real and sustainable job creation or preservation in the countries concerned;
7.2.6in line with the strategic objectives of its Development Plan for 2014-2016, enhances the direct financing of projects, in particular in favour of public bodies;

25 June 2014

Tabled by Ms Deborah BERGAMINI, Ms Elena CENTEMERO, Mr Francesco Maria GIRO, Mr Giuseppe GALATI, Mr Claudio FAZZONE

Votes: 52 in favor 5 against 2 abstentions

In the draft resolution, at the end of paragraph 7.2.6, add the following words: ", and proposes to member States a change in the bylaws of the CEB that would enable it to implement policies of financial support and provide direct funding to public bodies and agencies without relying on the intermediation of private banks."

In the draft resolution, after paragraph 7.2.6, insert the following paragraph:

"reviews its strategies, which have hitherto been focused on achieving goals oriented to specific geographical areas, adjusting its intervention policy to favour specific areas of action over geography, promoting the standardisation of the criteria used for the allocation of funds and setting priorities with reference to the regional rather than the national boundaries of member States;"

7.2.7supports member States’ loan projects aimed at implementing the recommendations set out in the 2014 report by the Council of Europe Secretary General on the “State of democracy, human rights and the rule of law”, notably as regards social rights and the Disability Action Plan 2006-2015;
7.2.8perseveres in boosting its visibility both among non-member countries and those member States that are not active borrowers.

25 June 2014

Tabled by Ms Deborah BERGAMINI, Ms Elena CENTEMERO, Mr Francesco Maria GIRO, Mr Giuseppe GALATI, Mr Claudio FAZZONE

Votes: 50 in favor 4 against 2 abstentions

In the draft resolution, after paragraph 7.2.8, insert the following paragraph:

"enhances the transparency of its activities through the online publication of the value and destination of its investments."

8The Assembly looks forward to receiving the written replies of the Governing Board and the Governor of the CEB to the above recommendations.