B Explanatory memorandum
by Ms Nicole Trisse, rapporteur
1 Introduction:
a European bank with a social vocation
1. The Council of Europe Development
Bank (“the CEB” or “the bank”) is a discreet yet agile institution
– an instrument of action for its member States. According to its
statute, the bank is linked to the Council of Europe as a partial
agreement and any member State can join it; 41 countries are now
CEB members (and stakeholders at the same time), including two that
have a different relationship with the Council of Europe.
Note The Parliamentary
Assembly has followed the Bank’s work more closely since the early
1990s when the CEB transformed its functioning and integrated many
new members from central and eastern Europe.
2. Originally set up as a fund in 1956
Note by eight countries,
the CEB for many years focused largely on assisting the resettlement
of refugees and displaced persons, as well as providing aid in emergency
situations due to natural disasters. Later, vast development needs
in the new member States came into focus, and the scarring social
effects of the 2009 financial crisis prompted broader action to
support the most vulnerable and disadvantaged populations. Moreover,
the massive influx of migrants and refugees in recent years has stretched
some national social systems to their limits: the CEB’s historical
mission is pertinent again in the context of support for vulnerable
populations.
3. In these circumstances and considering a resurgent sense of
rivalry over jobs and welfare resources, the call for action by
the Secretary General of the Council of Europe
Note to build more inclusive societies
across Europe resonates at the very heart of member States’ concerns.
The CEB is fit for purpose to help member States – alongside other
contributors – uphold shared values and human dignity for all through
high-quality projects that advance social progress at the grassroots
level.
4. This report of the Committee of Social Affairs, Health and
Sustainable Development reviews the bank’s work over the past five
years, follows up on the Assembly’s earlier recommendations and
makes proposals towards further enhancing the CEB’s relevance, visibility
and strength in relation to member States. My work as Committee
rapporteur has been based on interviews with the bank’s and Council
of Europe’s officials, selected members of the Governing Board (who
are also permanent representatives of member States to the Council
of Europe), as well as documentary research and deliberations in
the Committee (such as on 19 March 2019 when it held an exchange
of views with Dominique Lamiot, Chairman of the CEB’s Governing
Board). I have also carried out a fact-finding visit to the bank’s
headquarters in Paris on 20 March 2019.
2 A snapshot of the bank’s work over 2014-2018:
coping with the fall out of the financial crisis, confronting new
challenges
5. The 2009 financial crisis has
profoundly transformed Europe’s economic landscape. Budgetary austerity measures
negatively affected the capacity of various institutions and States
to fund ongoing projects and social investment. Further to the tightening
of the prudential requirements on capital and leverage, the CEB
had to moderate its lending activity, whilst its clients – member
States – also faced constraints on borrowing and socio-economic
handicaps such as continued high unemployment and rising rates of
poverty. Economic slowdown lowered the overall lending activity
to the bank’s target countries
Note around 2012-2013, but thereafter activity
picked-up again, notably in terms of project approvals. With 194
projects currently ongoing, there have been no defaults or late
repayments on the related loans. However, a continued decrease in
interest rates in financial markets – more favourable to borrowers
– has translated into shrinking profits and the Social Dividend Account
of the CEB over 2014-2018 (see the table below).
6. It was against this background that another challenge emerged
in mid-2015 – that of emergency assistance to and long-term integration
of migrants and refugees. In response, the CEB set up a new grant-based
financing tool – the Migrant and Refugee Fund
Note aimed at supporting national efforts
to guarantee basic human rights, mainly through priority funding
of reception and transit centres for migrants and refugees. The fund’s
€28 million have enabled the bank to support 24 projects in 14 countries
by the end of 2018; half of those projects are still ongoing and
should be completed by April 2021. North Macedonia and Greece have
been the main beneficiaries of this funding, receiving overall respectively
€6.35 million and €5.5 million in grants. In parallel, the scope
of the existing Regional Housing Programme was expanded to help
resettle the displaced persons: by the end of 2018, €120 million
of grants from this programme supported housing solutions for 4 300 vulnerable
refugee families in Bosnia and Herzegovina, Croatia, Montenegro
and Serbia.
7. Overall, the bank’s financial activity over 2014-2018 is resumed
in the table below:
Key figures on CEB and its activities
(in million euros; data for the end of each year)
| |
2014
|
2015
|
2016
|
2017
|
2018
|
2014-2018
|
|
Loans
disbursed during the year
Of which in target
countries
|
1 746
924
|
1 843
1126
|
2 037
1156
|
2 302
1150
|
2 773
1233
|
+58.8%
+33.4%
|
|
Projects
approved during the year
Of which in target
countries
|
2 065
1320
|
2 301
1499
|
3 451
1144
|
3 908
1448
|
3 898
1664
|
88.8%
+26%
|
|
Total of loans outstanding
|
12 992
|
13 416
|
13 715
|
14 057
|
14 883
|
+14%
|
|
Subscribed capital
|
5 472
|
5 472
|
5 472
|
5 472
|
5 472
|
0
|
|
Paid-in capital
|
612
|
612
|
612
|
612
|
612
|
0
|
|
General reserve
|
1 895
|
2 030
|
2 150
|
2 255
|
2 353
|
+24.2%
|
|
Profit
|
134
|
127
|
104.9
|
112.0
|
97.5
|
-27.2%
|
|
Social Dividend Account*
|
70.3
|
60.6
|
63.1
|
59.1
|
52.2
|
-25.7%
|
* The Social Dividend Account is fed from the bank’s profits
and can be used to subsidise projects with high social impact.
8. In terms of activities, the
CEB largely focused on social cohesion through support to job creation
(notably in small and medium-size enterprises), social housing,
better living conditions in urban and rural areas, schools and vocational
training institutions. The share of projects in this field remained
above 76% throughout 2014-2018. Funding of public health infrastructure
and environment-friendly projects (including energy efficiency investment)
was also important, averaging respectively some 8% and 9% each year.
Although emergency aid to refugees, migrants and displaced persons
represented a modest percentage of the total, longer-term integration
efforts for this population group, together with support to other
vulnerable groups, is much more important than that through the
mainstream investment in social cohesion projects.
9. Concerning the number of countries actively borrowing from
the CEB, this figure stood at 20 in 2014, 13 in 2015, 19 in 2016,
22 in 2017 and 32 in 2018. Big countries with important contributions
to the bank’s capital are also major users of its loans, such as
Poland, Spain, Turkey and France; they are followed by Germany, the
Czech Republic, the Slovak Republic and the Netherlands as further
significant beneficiaries. Some countries are net contributors to
the bank’s capital without actively borrowing from it (Denmark,
Estonia, Holy See, Kosovo*, Liechtenstein, Luxembourg, Norway, San
Marino and Switzerland). At the same time, eight Council of Europe
member States (Andorra, Armenia, Austria, Azerbaijan, Monaco, the
Russian Federation, Ukraine and the United Kingdom) remain outsiders
of the partial agreement on the CEB, thus neither contributing to,
nor benefiting from this tool for social investment and solidarity.
Unfortunately, prospects for their membership currently appear uncertain.
10. The bank co-finances social projects
Note together
with its member countries by making available its own resources
and funds raised on financial markets in conditions that reflect
the quality of its rating (AAA with Standard & Poor's, outlook
stable; Aa1 with Moody's, outlook stable; and AA+ with Fitch Ratings,
outlook stable). For instance, in 2018, the bank raised €5 billion
in the international markets (up from €3 billion in 2017). The CEB
can also issue loans to financial institutions and local authorities
in its member States for social and sustainable development projects.
In 2017, it introduced a new financial instrument – the Cross-Sectoral
Loan (CSL) – seeking to give local authorities greater flexibility
in the financing of social infrastructure projects across overlapping
sectors. The same year, the CEB launched its first Social Inclusion
Bond, thus boosting its capacity to fund priority projects in the
field of social housing, education and vocational training, as well
as job creation. Overall, local and regional authorities were direct
beneficiaries of CEB funding for about 33% of loans approved in
2018.
11. Over the years, the CEB has concluded a number of partnerships
with multilateral investors (through bilateral agreements with the
European Bank for Reconstruction and Development (EBRD), the European Investment
Bank (EIB), the World Bank, the Nordic Investment Bank (NIB), Kreditanstalt
für Wiederaufbau (KfW), and the European Stability Mechanism, “100
Resilient Cities” (100RC) – pioneered by the Rockefeller Foundation)
and international organisations (mainly the European Union and several
United Nations specialised agencies such as the United Nations Development
Program (UNDP), whilst co-operation agreements with the United Nations
High Commissioner for Refugees (UNHCR) and UNICEF are being renewed.
These joint undertakings are particularly relevant for fostering
the social agenda and sustainable development goals across Europe.
12. Among the CEB’s partnerships, the relation with the European
Union (EU) is particularly important. Indeed, the EU is the largest
donor of funds to the CEB for supporting projects with a high social
impact in countries that are most in need. In 2018 alone, the EU
contributed €39.5 million out of €41 million to the CEB’s trust
funds, thus enabling grants to various projects in Turkey and the
Western Balkan countries that benefitted over 5000 vulnerable persons,
mainly refugees and internally displaced persons, in terms of access
to health care and social housing. In addition, several EU countries
recently set up separate trust funds to enhance technical assistance
for this type of projects (the Slovak Inclusive Growth Account,
the Italian Fund for Innovative Projects, the Spanish Social Cohesion
Account).
Note Moreover,
via its European Co-Financing Facility – a loan instrument – the
CEB can help its member States access EU funds to tap their social
investment needs.
13. Another important aspect of the CEB’s work is its relationship
with the Council of Europe and support for its values. In this regard,
I should stress funding for justice sector reforms, in particular
efforts to improve infrastructure providing public judicial services
and conditions in detention facilities. The latter activity is rather unique
in Europe and assists member States in implementing the European
Prison Rules. Where relevant, for assessing project proposals, the
bank also liaises with the European Committee for the Prevention
of Torture and Inhuman or Degrading Treatment or Punishment (CPT).
14. Moreover, in a similar vein, the CEB is participating in the
rehabilitation of psychiatric care facilities in order to better
protect the dignity of patients in line with relevant European and
World Health Organisation standards. In relation to projects financed
under the Migrant and Refugee Fund, the bank works in close co-operation
with the Council of Europe and its Special Representative on Migration
and Refugees. The CEB also follows the work of the Commissioner
for Human Rights and regularly refers to the Commissioner’s findings, notably
from country visits, for screening project proposals. Finally, I
should point out that the current statute of the CEB does not provide
for the possibility of direct budgetary support to the Council of
Europe.
3 Selected
examples of the bank’s projects
15. Among the many projects that
the CEB co-financed in recent years, I have chosen three to illustrate
the bank’s action. One such project is implemented together with
the French authorities in the field of health care (cancer treatment
and research), another one supports various public investments at
regional level in Poland, and the third one covers a micro-finance
programme through a local foundation in Bosnia and Herzegovina, including
a guarantee from the CEB’s Social Dividend Account.
3.1 CYCLHAD:
co-funding the development of innovative cancer treatment in France
16. The original CYCLHAD project
was launched in 2013 with the CEB loan of 50 million earmarked to finance
a national undertaking under the cancer treatment plan started by
France in 2002. This project was extended in 2018 with an additional
loan of 42 million and should be completed by the end of 2023. The
CEB loans (covering altogether 48% of the total project cost) were
crafted in such a way so as to support the reduction of debt levels
by local public authorities (which provide guarantee for the loans)
and commercial banks that were induced by the economic and financial
crisis. The first CEB loan was disbursed in three tranches in 2015-2016.
17. As the project summary points out, about 355 000 new cases
of cancer are diagnosed each year in France; yet only half of them
can be cured with the traditional treatment methods of surgery,
chemotherapy and radiotherapy. The National Cancer Institute put
in place the France Hadron programme (as of 2012) in order to co-ordinate
national research on hadron (or particle) therapy. This innovative
radiotherapy method can destroy radio-resistant and inoperable cancerous
cells by irradiating them with beams of protons or carbon ions,
a major solution for the future. It will be particularly useful
in the treatment of very young patients.
18. In France, the Archade centre of Caen (in Normandy) pilots
upstream research on carbon ions, partly financed by the enterprise
CYCLHAD and the CEB. The project has been designed to develop cost-competitive cancer
treatments by financing the construction of the research centre,
the purchase of hadron therapy system and the development of clinical
treatment. By the end of 2018, phase-1 of the project was completed
with the inauguration of the research centre and the beginning of
treatment for the first patients with proton therapy. The CEB’s
assessment considered phase-1 to be highly satisfactory. Phase-2
of the project runs from 2018 to 2022 and is aiming to develop more
affordable technological options for clinical treatment so that
more French hospitals can buy and use it. Ultimately, the prototype
treatment will be deployed and operated by CYCLHAD as from 2023
in phase-3 of the project.
19. In his admissibility opinion, the Secretary General of the
Council of Europe noted that the project was in line with the political
and social objectives of the Organisation (as stated in Article
1 of its Statute), including its aim to facilitate the economic
and social progress of its members. The project is also in line
with the Convention on Human Rights and Biomedicine (Oviedo Convention,
Article 3 that refers to “equitable access to health care of appropriate
quality”) and the Committee of Ministers Recommendation CM/Rec(2012)8
on “The implementation of good governance principles in health systems”,
as well as the Parliamentary Assembly’s resolutions, notably
Resolution 1946 (2013) on “Equal access to health care” stating that “the right
to health is a fundamental human right” and urging member States
to “ensure the accessibility of health care facilities and health
professionals throughout the territory by taking appropriate measures”.
3.2 Podkarpackie
regional projects: improving living conditions and health services
in urban and rural areas
20. The Podkarpackie Regional Infrastructure
Public sector Financing Facility in favour of one of the poorest provinces
in Poland was approved by the CEB in 2018 as a loan of €43 million.
It is based on the multi-annual financial plan of the region concerned
and will support a series of sub-projects for improved transport accessibility
(modernisation of road and railway infrastructure to reduce congestion
and optimise safety) and connectivity with neighbouring regions/countries,
investment in cultural heritage (renovation of the landmark castle
and museum complex of Łancut, and historical buildings in Krosno)
and municipal capacity to deliver public services (through territorial
planning, digitalisation and medical centres). The CEB’s loan will complement
regional efforts so that cumulated capital investments would total
around €310 million over the 2018-2020 period.
Note
21. The Podkarpackie regional projects have been supported by
the CEB since 2010 after the competencies and responsibilities of
Polish local self-governments had been expanded. These now face
financial challenges of modernising local infrastructures and the
provision of public services as diverse as education, healthcare, social
care, public order, culture, public transport and environmental
protection. In addition, there is a pressing need to tap the full
economic potential of the region and boost social cohesion through
more and better jobs for the local population. To this end, a good
dose of EU structural and cohesion funds has already been injected in
the area in addition to domestic contributions.
22. With the CEB’s financing facility, it will be easier for the
Podkarpackie regional authorities to manage their own financial
contribution to the targeted investments. Sub-projects are expected
to improve life for the region’s 2.1 million inhabitants and to
have positive impact on sustainable development. The opinion of admissibility
by the Secretary General of the Council of Europe considers that
the project’s objectives are in line with the rights set out in
the Revised European Social Charter
Note (notably
regarding protection of health) and the standards promoted through
the European Charter for Local Self-Government (ETS n° 122).
23. Moreover, the project will echo this Assembly’s recommendations
on road safety as a public health priority (
Resolution 2129 (2016)), the functioning of public administration and public
services (
Resolution
2008 (2014)), accessibility of health care as an essential condition
for social cohesion and economic stability (
Resolution 1946 (2013)) and the impact of the economic crisis on the strategic
investments in public services at local and regional level (
Resolution 1886 (2012)).
3.3 Microcredits
for supporting the creation and preservation of viable jobs in Bosnia
and Herzegovina
24. Although small in size, the
programme loan of €2 million, launched in 2018 using the Social
Dividend Account guarantee, will provide crucial support to micro-entrepreneurs
in Bosnia and Herzegovina via the MI‑BOSPO Microcredit Foundation
affiliated with the Women’s World Banking network. The MI-BOSPO foundation
mostly works with micro and small enterprises (MSEs) which are owned
by women, often lacking a stable income and access to credit. The
programme loan shall contribute to women's economic empowerment and
inclusion, as well as helping to improve their living conditions.
However, male entrepreneurs will not be excluded as the foundation
can serve them too for up to 25% of the project’s volume.
25. CEB financing through this project will be limited to €5100
per loan, thus enabling at least 800 households and micro-enterprises
to benefit. Importantly, the MI-BOSPO foundation will accompany
these beneficiaries with not only money, but also business counselling.
The formula of micro-credit programme loans has already been successfully
tested in Bosnia and Herzegovina in 2014 with €2.5 million allocated
via another microcredit partner institution in Bosnia and Herzegovina.
Note
26. Given that ongoing political uncertainties are slowing the
foreign investment in the country, it is even more difficult to
spark economic development from within. The unemployment rate was
as high as 37% in March 2018, which may be hiding considerable economic
activity in the informal sector. Women are disproportionally affected
given that they are often confined to households (due to the lack
of childcare facilities) or as unpaid family workers. The socio-economic
impact of the CEB’s programme loan is expected to be particularly
high.
27. It is not surprising that the admissibility opinion for this
project also points to the high potential for added value of the
CEB’s financing, notably in the light of Bosnia and Herzegovina’s
commitments under the European Social Charter (revised) (ETS n°
163) and the critical conclusions of the European Committee of Social
Rights (ECSR) for the 2011-2014 period. Moreover, the project is
in line with the objectives of the Council of Europe Gender Equality
Strategy 2018-2023 and a series of this Assembly’s resolutions.
The latter notably concern empowering women in the economy (
Resolution 2235 (2018)), fighting income inequality (
Resolution 2158 (2017)), the challenge of a new European Social Model (
Resolution 2068 (2015)) and decent work for all (
Resolution 1993 (2014)), as well as the dangers for democracy and social rights
due to austerity measures (
Resolution
1884 (2012)).
4 Governance
and strategic orientations of the CEB beyond 2019
28. The CEB’s governing structure
reflects both its historical set-up (notably ties with the Council
of Europe) and the evolving circumstances. The Governing Board, composed of ambassadors
(permanent representatives to the Council of Europe) of member States,
is “the supreme organ of the bank”: it sets the general orientations
of CEB work and conditions for membership, elects the CEB’s highest
officials and approves the annual report, the accounts and the balance
sheet. The Administrative Council,
where mainly representatives of national ministries of finance sit,
manages all the financial aspects, approves projects and the budget.
The Auditing Board with three
members inspects the bank’s accounts and balance sheets after their
examination by an external auditor.
29. The Governor, elected
with a five-year mandate that is renewable once, is the legal representative
of the CEB and manages the bank’s operational services; he/she is
assisted by three vice-governors on financial strategy, social development
strategy and target group countries. Depending on the outcome of
ongoing discussions in the Governing Board, the number of vice-governors
could in future be reduced to two whilst redistributing their portfolios.
We should recall that this is one of the proposals made during the
CEB Strategic Review process in 2008 which was strongly supported
by the Assembly.
30. The current Governor, Rolf Wenzel, has been leading the CEB
since 2012, working consistently to make this institution “more
relevant, transparent and effective to the benefit of all stakeholders”.
Under his leadership, the CEB’s work has been further streamlined
and rationalised based on internal restructuring, an enhanced prudential
framework, a four-pronged screening of project proposals for social
added value, intensified dialogue with the CEB’s stakeholders and
partners, strengthened evaluation functions, and close monitoring of
macro-economic challenges in the CEB’s environment.
Note
31. In follow-up to these Assembly’s recommendations on “continued
rationalisation of the CEB’s governance” (contained in
Resolution 2007 (2014)), I understand that progress is still lacking as regards streamlining
the bank’s decision-making structures and the simplification of
the voting system in the Governing Board. The latter could give
more weight to smaller and medium-sized countries, although ‘perfect
equality’ in the sense of “one country, one vote” – as in the case
of the Committee of Ministers – would probably be unrealistic. In
fact, voting rights in the bank are directly correlated with countries’
shares in the bank’s capital. The reform of the CEB’s governance
should continue to keep improving efficiency as expressed in Resolution 434
(2018) of the bank’s Governing Board, in particular concerning the
review of the competencies, functions and number of Vice-Governors
in due course.
32. The
CEB’s Strategy for 2017-2019 was
formulated against the background of a persisting low interest rate
environment and constantly changing banking regulations for international
financial institutions. This outlook proved to be far-sighted, enabling
the CEB to meet IFRS
Note requirements on
capital adequacy by gradually increasing its reserves through incorporation
of annual profits. However, in the coming years the CEB will likely
hit the ceiling on the volume of financing it can offer to member
States. If these want the CEB to keep expanding its lending, they
will have to consider a capital increase option (the last capital
increase became effective at the end of 2011). The current long-term
borrowing authorisation at the CEB is € 5 billion (for 2019).
33. The lines of action as defined in the CEB’s current strategy
are: (1) sustainable and inclusive growth; (2) integration of refugees,
displaced persons and migrants; (3) climate action by developing
mitigation and adaptation measures. These lines of action carry
equal importance and are closely intertwined, putting emphasis on
the social and environmental underpinning of human rights understood
in a broad sense. As Assembly rapporteur on the CEB, I believe that
these grand lines of action remain valid also for the bank’s activity
in the years to come. It would, however, seem appropriate to link
them up more explicitly with the United Nations Sustainable Development
Goals (SDGs), based on the bank’s thematic review and recent Assembly reports
(Resolution 2272 (2019) on “Implementation of the Sustainable Development
Goals: synergy needed on the part of all stakeholders, from parliaments
to local authorities”;
Resolution
2271 (2019) on “Strengthening co-operation with the United Nations
in implementing the 2030 Agenda for Sustainable Development”, and “Ending
violence against children: a Council of Europe contribution to the
Sustainable Development Goals” – currently in preparation).
34. In this context, and with eyes on the future, I should also
refer to the report of the Secretary General of the Council of Europe
for the Ministerial Session in Helsinki on 16-17 May 2019.
Note It
is a timely reminder that the Organisation is “founded on two major
legal instruments: the European Convention on Human Rights […] and
the European Social Charter” which are its “living roots” for growth.
The defence of fundamental social rights enshrined in the Charter
is thus the core business for both the Council of Europe and the
CEB; it is “the glue that holds our societies together” and “guarantees
Europeans the opportunity of a decent and dignified life”. I trust
that this growing emphasis on social rights will serve as inspiration
for the ongoing discussions in the CEB’s Governing Board on the
next Development Plan (2020-2022) which
should be approved by the CEB’s Governing Board and the Administrative
Council by the end of this year.
35. Drawing on the Secretary General’s paper, I wish to stress
the urgent need to better tackle the effects of increased inequalities
in modern Europe which penalise vulnerable population groups in
a particularly hard way. The CEB certainly shares this concern and
has issued two thematic papers (on “Housing inequality in Europe”
and “An introduction to inequality in Europe”) that could guide
policy makers. I would just add that we should also analyse the
causes of these inequalities and prioritise social investment that
has the greatest potential to reduce yawning inequalities and protect
the more vulnerable population that is exposed to poverty or is
more at-risk-of-poverty.
36. In this context, the goal of building a more inclusive society
demands that policy makers cast a closer look to the needs of the
most disadvantaged population in both urban and rural areas. This
is a major task for the CEB and its stakeholders. The role that
local authorities can play in this respect should not be underestimated.
Loan activities could be enhanced to develop multidimensional youth
centres that provide vocational counselling and social care, promote
civic engagement, cultural diversity and equal opportunities, and
can offer child-care support for families in poverty or at risk
of poverty. Moreover, when screening projects for social impact,
the CEB could also refer, where relevant, to the annual conclusions
of the European Committee of Social Rights (ECSR) in respect of
individual countries.
37. Talking about stakeholders, I wish to recall this committee’s
discussions on the bank’s membership and the interest of non-member
countries’ parliamentarians in conditions for joining the CEB. It
appears that the bank sets the accession modalities on the basis
of the prospective member’s contribution to the Partial Agreement
on the CEB (which derives from the rate of contribution to the ordinary
budget of the Council of Europe). Accordingly, a new member would
have to subscribe for its share in the CEB’s subscribed capital (composed
of paid-in and callable parts). The paid-in part for each member
represents 11.1% of their subscribed capital share. In addition,
the new member has to pay its share in the bank’s reserves (which
keep growing as the annual profit is incorporated) – this share
is currently significantly higher than the value of a country’s
share in the paid-in capital. In a nutshell, a new member must subscribe
to capital, pay a fixed share (11.1%) as paid-in capital and contribute
to the bank’s reserves (this figure increases each year and the contribution
rate is specific to each country).
38. The sums to be mobilised for joining the CEB may seem like
a sizeable obstacle when seen in absolute figures. Yet they merely
are a starting investment that enables a country subsequently to
borrow from the bank much larger amounts and at very advantageous
terms. Let us take Poland as an example: in 2018, its share of paid-in
capital stood at €14.24 million and the share of reserves is about
three-to-four times as much, while the total of CEB funds (loans
outstanding and financing commitments) in favour of Poland (end-2018)
is €2770 million. I believe this is a convincing argument and an
example that speaks for itself: CEB membership has a huge multiplier
effect on its shareholders’ capacity to implement worthy social
projects. The eight Council of Europe member States that are still
outside the CEB should seriously reconsider their position.
Note
39. Further to my discussions with the CEB representatives, I
realise how much work is done by the bank’s staff, notably in making
careful use of technical assistance grants to get projects off the
ground. Thus, institutional capacity building progresses in the
target countries, enabling them to better absorb funds and contribute
their fair share to the success of projects. In this context, the
Regional Housing Programme deserves a special mention: it was put
on track in 2012 as a joint initiative by Bosnia and Herzegovina,
Croatia, Montenegro and Serbia (the partner countries), as well
as multiple donors. After the initial phases of local capacity building,
the programme is now in a decisive phase with housing solutions
to be delivered for over 34 000 vulnerable persons in the four partner
countries by 2021
Note. This impressive
effort and experience could be replicated in other regions of Europe
not only to serve social housing needs but also to help embed sustainable
development principles by the same token.
5 Conclusions
and recommendations for future work
40. Despite complexities in its
economic, financial and regulatory environment, its relatively small
size and certain entrenched structural rigidities, the CEB has shown
a remarkable capacity to manage risks and support social investment
with high added-value in its member States. Over more than six decades
of work, the bank has accumulated unique know-how and comprehensive
experience in handling projects across countries with very different
levels of development, institutional capacity and social needs.
It should be encouraged to persevere with projects in countries
which require more technical assistance and need support for strengthening
their institutional capacity.
41. The bank should continue cultivating its links with the Council
of Europe and foster activities that constitute its comparative
advantage based on the Organisation’s values. The preparation of
the next development plan beyond 2019 is an opportunity for the
bank to echo the preoccupations of member States over furthering
sustainable development and making progress on implementing SDGs,
addressing the causes and effects of growing inequalities that lead
to poverty, ensuring the long-term integration of migrants and refugees,
and guaranteeing better delivery of public services in both urban
and rural areas. Outreach to local and regional authorities in member
States could also be enhanced to this end.
42. Finally, the CEB should work further to consolidate its partnerships
with privileged European and international institutions, as well
as to optimise its internal structures and governance towards more
flexible decision-making and lighter voting system.
