2012 ORDINARY SESSION

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(Second part)

REPORT

Eighteenth Sitting

Friday 27 April 2012 at 10 a.m.

In this report:

1.       Speeches in English are reported in full.

2.       Speeches in other languages are summarised.

3.       Speeches in German and Italian are reproduced in full in a separate document.

4.       Corrections should be handed in at Room 1059A not later than 24 hours after the report has been circulated.

The contents page for this sitting is given at the end of the verbatim report.

Ms Grosskost, Vice-President of the Assembly, took the Chair at 10.00 a.m.

THE PRESIDENT (Translation) – The sitting is open.

1. Written declaration

THE PRESIDENT (Translation) – A written declaration, No. 521, has been tabled on “The expropriation of the YPF Oil Company by the Argentine Government”, Document 12922, which has been signed by 66 members.

Any member, substitute, observer or Partner for Democracy may add his or her signature to this written declaration in the Table Office, Room 1083.

2. Promoting an appropriate policy on tax havens

THE PRESIDENT (Translation) – The first item of business this morning is the debate on the report, “Promoting an appropriate policy on tax havens”, Document 12894, to be presented by Mr Dirk Van der Maelen on behalf of the Committee on Social Affairs, Health and Sustainable Development.

In order to finish in time for the next debate, and to close the sitting at 1 o’clock, we may interrupt the list of speakers at about 11.20 a.m. to allow time for the reply and the votes.

I call Mr Van der Maelen, rapporteur. You have 13 minutes in total, which you may divide between presentation of the report and reply to the debate. You have the floor.

Mr VAN DER MAELEN (Belgium) – Thank you, Madam President. Colleagues, for those of you who are not yet convinced of the need for an appropriate policy on tax havens, I would like to start with some data and facts. First, let me address tax havens, tax avoidance, tax evasion and tax fraud. Wealthy individuals and multinational companies routinely use tax havens and as a result, multinational companies pay little or even no tax in relation to many of their operations. A study by the British National Audit Office found that in about a third of the countries studied, 700 large companies had paid no tax in 2006. A 2011 study by Tax Research UK showed that the UK loses at least £18 billion a year in tax revenue as a result of activities related to tax havens. Colleagues, that is four times what it would cost to eliminate child poverty in the United Kingdom. Developing countries are the main losers as a result of lost tax revenue. According to a 2009 Norwegian Government commission report, Norway loses between $640 billion and $980 billion annually.

Let me give some facts and data on financial stability and the role of tax havens – their role in so-called “shadow banking” cannot be overestimated. Globally, 69% of speculative hedge funds were located in tax havens in 2007. The Cayman Islands and the British Virgin Islands alone host half the world’s hedge funds: half the world’s hedge funds are in two fiscal havens. Together, the US and Europe host 30% of hedge funds. On tax havens and illicit financial flows, in 2005 the World Bank endorsed a global financial integrity study showing that illicit financial flows across borders ranged between $1 trillion and $1.6 trillion a year. Tax havens have been relevant to major corporate scandals such as Enron, Parmalat, Lehman Brothers, AIG and Northern Rock to mention just a few. Although all these facts and figures were known and although the impact of tax havens on public finances and society at large was huge, those phenomena went largely unnoticed until the financial and economic crisis of 2008. Using the momentum of the ongoing global financial and economic crisis, international consensus has grown that there is a need to tackle the root of the problem of tax havens.

Various concerns about the functioning of tax havens were raised in major international forums such as the G20, the OECD, the European Union, the International Monetary Fund and even our Council of Europe, which in 2010 amended the Convention on Mutual Administrative Assistance in Tax Matters. Today there is growing awareness in the international community that the root problems relating to tax havens are bank secrecy, lack of transparency, lack of effective public oversight, regulatory dumping, predatory tax arrangements and abusive accounting techniques in multinational companies – notably transfer pricing.

The first result of the international community’s drive to curb tax havens, the G20-OECD co-operation, led to multilateral co-operation among more than 100 states. Based on bilateral treaties, information on demand is now exchanged between the two states that signed the treaty. In theory, that approach sounds perfect, but if one takes a closer look at its practical implementation one can see a lot of room for improvement. I shall give a practical example of fiscal co-operation between France and Lichtenstein. As I shall be speaking about France, I shall switch to French.

(The speaker continued in French)

A hypothetical example might be that of a French tax inspector who suspected that an individual was not declaring their full income, and was instead holding it in an account in Lichtenstein. A treaty was in place that allowed the two countries to share information on the tax affairs of their citizens: a French tax inspector could request information from the Lichtenstein authorities. To do so, however, he would need to know the details of the account concerned, and this was rarely the case. The treaty also required the tax inspector to complete a long form outlining suspicions, which the Lichtenstein authorities would assess to determine whether they were reasonable. Even then, the Lichtenstein authorities had to be able to access relevant information on the account, and this was often not possible as an account could be held in a different name and Lichtenstein held no central register of account names. All of this meant that fraud by companies or individuals was difficult to detect, and, when it was detected, the lengthy administrative process gave the individuals concerned plenty of time to move their money to a new tax haven.

Some progress had been made in recent years. For example, international efforts between OECD countries had led to the recovery of approximately €14 billion. Very significant sums remained hidden, however, and ought to be recovered. In essence, the resolution was intended to tackle such problems.

THE PRESIDENT (Translation) – Thank you, Mr Van der Maelen. You have three minutes and 40 seconds remaining.

I remind members that speaking times in this morning’s debate are limited to three minutes.

In the debate I call first Mr Gross, who will speak on behalf of the Socialist Group.

Mr GROSS (Switzerland) – As a European citizen elected in Switzerland, I am grateful that the Socialist Group has allowed me to speak in favour of this very important report. Dirk Van der Maelen did a very good job in the interest of our common will to ensure that our states are not prevented from obtaining the resources they need to work for all their citizens.

More than 80% of Swiss people pay taxes on their income or fortune as the law requires. It is unfair to them and to all other Europeans who do the same that we and other countries have legislation that allows a few people not to pay their fair taxes. For fair and equal treatment of all, we should follow the recommendations in the report.

We might develop a famous sentence from the philosopher Kant and say that all Europeans should do at home what would serve all Europeans best. That philosophical point shows that it is in the interest of none of us that legislation anywhere empowers a minority of privileged people and companies not to follow the rules that apply to everybody. Nothing can be in the interests of the majority of the Swiss, Austrians, Luxembourgers or British that would enable a few others not to follow the general rules for all of us.

As a young socialist I remember that one of the best things the Socialist Party did in Switzerland was between 1978 and 1984 when we took a popular initiative to change the banking system exactly as Mr Van der Maelen has suggested. We failed in 1984 as the vote was only 25% in favour, but it is positive that since then the Swiss Government has changed its policy. The report encourages change, which is why we should support it.

THE PRESIDENT (Translation) – Thank you, Mr Gross. I call Ms Bakir, who will speak on behalf of the European Democrat Group.

Ms BAKIR (Turkey) – I congratulate the rapporteur on an excellent report that promotes an appropriate policy on tax havens. Tax evasion is a crime and one that we as member states of the Council of Europe strongly condemn.

A country can be identified as a tax haven if it satisfies a number of conditions. In tax havens there is either no tax or only a symbolic tax on relevant income. Tax havens have legislation that guarantees secrecy and protects investors from exchange of information and tax scrutiny. There is lack of transparency, so investors can hide the source of their income and may not declare it in their country of origin. National funds illegally looted by political leaders or dictators can easily find a safe haven in offshore financial centres, where they are laundered or invested.

Investors usually do not undertake any substantial business activities in these tax havens because many of them are small islands where there is little business productivity. Self-promotion as an offshore financial centre is also characteristic of a tax haven. In the past, we have heard arguments in favour of tax havens. Some have argued that as they are independent countries, why should it not be possible for them to control their own tax regimes? Along the same lines, it has been advocated that this could decrease the inefficiencies associated with tax systems and perhaps benefit investors.

There is a crucial response to these points. Tax havens work on the principles of secrecy and a lack of transparency. In the past, they have been used for money laundering and to facilitate the funding of terrorist activities. It is this aspect of activities in tax havens that requires very special attention because society has to pay the greatest cost. In a globalised economy, money can be moved very swiftly and anonymously between different countries, and thus can be used to finance the activities of terrorists, drug traffickers and others undertaking illegal activities.

The Parliamentary Assembly of the Council of Europe should urge the Committee of Ministers to set up an international set of standards that ensure transparency and the free exchange of information regarding tax matters. These principles of transparency and the free exchange of information are essential to ensure that all economic activity is carried out in a fair and transparent manner. We must fight fraud and tax evasion. In that context, participation in the Global Forum on Taxation should be encouraged. Offshore tax havens have declared economic war on honest taxpayers in the member states of the Council of Europe. Transfer pricing, undertaken with the involvement of offshore centres, leads to multinational companies evading their responsibilities by diverting their tax burden on to smaller market players or taxpayers. This inevitably results in a decrease in public investment. I strongly believe that if our aim here is to present a unified Council of Europe and to achieve greater unity between its members, our first step should be to develop a harmonious set of tax policies in order to prevent harmful tax evasion practices.

THE PRESIDENT (Translation) – Thank you. I call Mr Hancock, who will speak on behalf of the Alliance of Liberals and Democrats for Europe.

Mr HANCOCK (United Kingdom) – I congratulate the rapporteur on this report. It is a long time since I have been able to come to this Chamber and say that I fully, wholeheartedly and 100% support the words of the rapporteur. It would be an affront to civilised society and everyone who believes in fairness, whether we are on the right, the left or in the centre, not to support the right of a country to expect every one of its citizens to pay a legitimate amount of tax. That is a given. It is inexcusable that people look for reasons not to pay their taxes while enjoying the protection and the lifestyle of the country in which they live. It is completely unacceptable.

Why do people go to the Cayman Islands and deposit their money there? Is it because they like the tropical beaches? Do they go to Monaco because they want to gamble in the casino? Do they go to Switzerland because they like chocolate? No, the truth of the matter is that they go to these places because they can hide their money away and avoid paying taxes in their countries of origin, where most of that money would have been made. Secrecy is an inbuilt reaction in these countries, and that is appalling. My own country is a prime example because we have allowed tax havens to be set up in the Isle of Man, the Channel Islands, the Cayman Islands, the British Virgin Islands, Gibraltar and others, and they persist in these practices.

However, we must all stand up and be counted. How many people here are able to avoid paying taxes by putting their money away in a bank in Switzerland, Luxembourg or Monaco? I suspect that none of us would do that, and that is right because we are parliamentarians and we spend taxpayers’ money. We enjoy being able to take taxpayers’ money and make decisions about providing services. Those people who avoid paying tax want to use those services; they just do not want to pay for them. The same can be said of multinational companies.

It is not possible to sustain the argument that this situation does not need to change. When I saw the amendments being proposed in the committee I attended yesterday, their promoters reminded me of a man holding up an umbrella in a hurricane. They are trying to stop a natural progression towards bringing tax evasion out into the open. But there they were, putting down amendments that tried to undermine or even wreck this resolution. It came down to a question of national self-interest, and that cannot be right.

We are talking about societies that need to generate wealth to improve people’s lives, ease the employment situation and deal with all the other problems we face. All the things that we talk about in this Assembly cost money, yet a considerable number of people are able to hide their money away and avoid making their contribution. But they are the very people who complain that society is too fragmented. Even so, they are doing all they can to avoid paying towards repairing our societies and allowing countries to flourish. We need to get our young people back to work, pay decent pensions and provide a good education for everyone. For goodness’ sake, we should all support the report before us because it is a small step in the right direction.

THE PRESIDENT (Translation) – Thank you. I call Ms Andersen, who will speak on behalf of the Group of the Unified European Left.

Ms ANDERSEN (Norway) – The majority of the countries represented in the Council of Europe are severely affected by the current financial crisis, as are nations elsewhere around the world. They are suffering the effects of poverty, unemployment and austerity measures. All this is undermining development and ruining the future for innocent people who are not in any way responsible for this crisis. If we are to stop this happening over and over again, we have to eliminate tax havens because they are one of the main causes of this crisis.

It is not possible to repair damaged economies and sustain decent welfare provision without plugging the tax loopholes that are exploited by rich people and large companies. They slip through the net and manage to avoid their responsibilities. However, many individuals and companies have found it possible to grow wealthy only because other people have been paying their taxes. They have benefited from the health care, education, policing and everything else that tax money pays for.

Legal tax loopholes are not only immoral, they provide hiding places for serious national and international criminal activity. I cannot go into detail about the international networks that facilitate tax avoidance, but we know that they are dependent on the lawyers, accountants and other financial managers who are able to transform an illegal business into a legal one. That is another reason why we need the openness that this resolution highlights. It is necessary to put in place surveillance mechanisms that can operate between countries and monitor these activities internationally. That is very important.

A number of amendments have been presented, but the majority were rejected by the committee. Why? It was because the amendments want business as usual; they are all aimed at distorting the content of the resolution to hinder important changes and at protecting those who profit today from what is often criminal activity and who are stealing billions every year through tax evasion. The plenary also has to reject them and take important steps towards decent business and responsible policies for everybody in the future.

THE PRESIDENT (Translation) – Thank you, Ms Andersen. I call Mr Volontè, who will speak on behalf of the Group of the European People’s Party.

Mr VOLONTÈ (Italy) thanked the President. The EPP Group supported the gist of the report and its intentions. No one could possibly approve of tax evasion or fail to acknowledge its serious nature, particularly at a difficult time, politically speaking, when governments were asking their citizens to pay higher taxes. It was important to create a greater sense of equity and solidarity about tax. A sense of social morality was also required.

Better, more in-depth taxation policy was required, within countries and in relation to those countries in which people chose to locate their money in order to avoid paying tax. In some cases, such money supported criminal activities, such as corruption, money laundering and match fixing, and in such cases the tax avoidance caused double damage to society.

Some of the amendments proposed to the report were positive, others intended to hamper or diminish it. The Assembly could trust the wisdom of the rapporteur in judging which were positive. All countries of the Council of Europe faced tough financial circumstances and were obliged to protect the honest citizen, traders, entrepreneurs and professionals, and to demonstrate that sacrifice was being made not just by them but by everyone.

THE PRESIDENT (Translation) – Thank you, Mr Volontè. The rapporteur will reply at the end of the debate, but does Mr Van der Maelen wish to reply now?

Mr VAN DER MAELEN (Belgium) – No.

THE PRESIDENT – We move on to the next speaker. I call Mr Toshev.

Mr TOSHEV (Bulgaria) – Madam President, distinguished colleagues, I am so glad that finally our Assembly is debating an issue that is so widely discussed in our countries – policy on tax havens. In the current situation of economic crisis in Europe and the world as a whole, more and more voices – in the territory of the EU, at least – are in favour of greater control of so-called offshore zones or tax haven zones.

National legislation and measures implemented by the state should guarantee the equal taxation of local companies and those registered in offshore zones that act in the same territory as those local companies. Such measures have another aspect. There is a problem with so-called veiled operations in which it is unclear who exactly is behind an operation; that issue would also be solved in that way.

In many cases, companies acting in particular states are able to avoid, or seriously to decrease, the tax they pay because they have registered in so-called tax havens. Such activities are in accordance with existing laws, but it is a matter of fact that public budgets are losing serious amounts of income during this period of significant financial shortage.

I would like to make it clear that I am firmly against the unification of taxation among EU member states, especially of corporation tax and excise duty on diesel. That is part of subsidiarity, which is one of our European values. However, within the state, the taxation conditions should be equal for all.

Last but not least, I should say that during the 1980s the former communist regimes greatly drained financial resources. There are a number of reasons to believe that some of those resources were transferred to offshore zones and registered there as legal entities before being returned to the states of origin as private foreign investments. Most post-communist governments did not have the courage – some may not have had enough good will – to organise any inquiry into that issue. I would not be surprised either if some of the notorious figures of the communist regimes, which fell in 1989, were owners of companies registered in such areas.

That is why I consider that the report presented today by Mr Dirk Van der Maelen, on behalf of the Committee on Social Affairs, Health and Sustainable Development, is very timely and of great importance to people who elected our national parliaments. However, I dare to believe that the report is only the first step and that the Assembly will continue to scrutinise the issue. I would like to use this opportunity to advise our rapporteur to have a look at one of the motions that I tabled in this Assembly in 2005. It was about the need to investigate the financial resources exported by the states of central and eastern Europe at the end of communist totalitarianism.

I assure members that the people from central and eastern Europe, if not their governments, would enthusiastically admire such scrutiny following a recommendation from our Assembly. Such a step would be a significant contribution towards avoiding the widespread crisis in our representative democracy in Europe.

THE PRESIDENT (Translation) – Thank you, Mr Toshev. I call Mr Marquet.

Mr MARQUET (Monaco) thanked the President. The report demonstrated that the position in relation to taxation had changed for the better in many countries, according to the standards set down by the OECD, and that was encouraging. Amendments had been put down to introduce a definition of tax haven, which was necessary to ensure clarity about what was under discussion.

Monaco was on the OECD white list and had signed 30 bilateral agreements regarding tax havens. VAT and corporation taxes set centrally by France were its main source of income, and Monaco’s banks were regulated by the French Central Bank. As of 2011, Monaco’s status was “onshore”, and businesses now had to pay high transfer costs to keep funds there. It was in the interest of companies with headquarters in Monaco to be responsible in paying their taxes.

Social dumping was an issue in need of discussion. Countries that allowed low labour costs with no social protection for workers were a scourge for those whose industries were disappearing piece by piece. This was an issue not only of competition, but of human dignity. Priorities needed to be established, and although tax avoidance was clearly important, the exploitation of workers should be a higher priority.

The principality of Monaco had made a choice to meet OECD standards regarding tax and had done so since 2011, and that choice deserved recognition.

THE PRESIDENT (Translation) – Thank you, Mr Marquet. I call Mr Pfister.

Mr PFISTER (Switzerland) thanked the rapporteur and colleagues. The report was, however, inadequate and made blanket assertions that were simply not true. The use of the term “offshore” did not take account of the nature of the single market, which was based on free flows of capital. While the recent financial crisis had led to closer scrutiny of countries’ tax policies, it was necessary to take an objective and impartial view of the situation. Countries were free to order their own tax affairs. If a country wished to tax high earners at 75%, for example, no one would think of intervening. There had to be genuine independence in fiscal policy or Europe would be put at a competitive disadvantage.

Switzerland had a particular view on tax policy – one that could not simply be dismissed as unethical. That treatment would not help to ensure constructive dialogue. Switzerland, by contrast, had pursued a dialogue on these issues and continued to do so. An additional concern was that the subject of the report did not appear to be a matter with which the Council of Europe should be involving itself. Fiscal and tax matters were not within the Council of Europe’s remit.

Finally, the report failed to recognise the many positive steps taken by Switzerland in recent years.

THE PRESIDENT (Translation) – Thank you, Mr Pfister. I call Mr Recordon.

Mr RECORDON (Switzerland) stated that the way to hell was paved with good intentions. This appeared to be an appropriate metaphor for this report, which was a disappointing one. Countries such as Switzerland were being used as scapegoats, and it was regrettable that amendments put forward in committee to improve the report had been rejected. One problem, for example, was the lack of clear distinctions between tax evasion and tax optimisation.

If there was a particular focus on trying to crack down on European countries that were felt to be tax havens, organisations would simply shift their activities to countries outside the European Union. The rapporteur had made the same mistake as the Swiss government: it was not possible to look at just one small piece of the picture; the issue had to be tackled at global level. Without including tax jurisdictions such as the Cayman Islands and Hong Kong, effective action could not be taken.

This report was a first step, but unfortunately not a very good one.

THE PRESIDENT (Translation) – Thank you, Mr Recordon. I call Mr Schwaller.

Mr SCHWALLER (Switzerland) was unhappy with the report. There was no doubt that countries should work together more closely on tax matters to help clamp down on money laundering. Switzerland had pursued that objective and much progress had been made in recent years. Since 2009, for example, Switzerland had entered into more than 40 bilateral agreements to share information. More recently, Switzerland had decided to enter into administrative co-operative agreements to exchange fiscal information on a regular basis. None of those positive steps was detailed in the report, which unfortunately had many shortcomings.

The report talked about tax havens without defining them. Likewise it had no definition of predatory fiscal policies. The list at the back of the report on tax havens was drawn up by a private company and there had been no neutral assessment of its findings by official bodies. In addition, the report did not contain criteria on which these countries had scored. The report did not adequately cover the need for banking secrecy and its relationship with the use of information to clamp down on fiscal fraud.

The report could not be accepted in its current state. It was inaccurate and one-sided.

THE PRESIDENT (Translation) – Thank you, Mr Schwaller. I call Mr Reimann.

Mr REIMANN (Switzerland) had rarely seen such a tendentious report at a meeting of the Assembly. If it were agreed, it would harm the reputation of the Council of Europe. For example, the list of tax havens at the back of the report had been drawn up by a non-governmental organisation with links to organisations with left-leaning fiscal beliefs. Attempts were made in committee to persuade the rapporteur to redraft the report in a more balanced fashion. These unfortunately had not been successful.

The rapporteur had ignored the fact that Switzerland had concluded many different agreements on tax co-operation since 2009 and continued to do so. Banks were, of course, required to meet their tax obligations or they were required to leave Switzerland. However, Switzerland would pursue the tax policy that it saw fit and not simply do as one particular NGO wanted. The basic premise that automatically sharing tax information between jurisdictions would automatically swell the coffers of some countries was flawed. The report needed to be rethought.

THE PRESIDENT (Translation) – Thank you, Mr Reimann. I call Mr Boden.

Mr BODEN (Luxembourg) largely shared the concerns that had been expressed about the report. The report mislabelled tax havens and the question arose why it did not simply use the OECD definition of tax havens. He would be introducing an amendment to insert the OECD definition into the report. Likewise, the list of tax havens at the end of the report was not appropriate. The difference between banking secrecy and tax havens was not made at all clear. It was not clear why the criteria of large multilateral organisations such as OECD were being ignored in this report.

      Luxembourg had made much progress on transparency, it applied all the appropriate EU rules and standards. Luxembourg had recently entered into agreement with 30 other states to abolish double taxation, and its tax rate was comparable to that of neighbouring countries. He could not agree with the rapporteur’s assessment in the report.

THE PRESIDENT (Translation) – Thank you, Mr Boden. I call Mr Sudarenkov.

Mr SUDARENKOV (Russian Federation) noted that the Assembly had heard from 13 parliamentarians, five of whom were from Switzerland. It was natural that delegates from Switzerland would want to express their view, but in his opinion the report would enable the Council of Europe to make an important contribution to the debate on tax evasion. The rapporteur had, for example, helpfully pointed to weaknesses in the current system.

Arguments had been put forward in favour of tax havens. For example, it had been said that they promoted competition by ensuring that tax rates never rose too high in other countries, or that the extra income would be reinvested into the host country. These arguments were not convincing.

Russia had experienced a great deal of tax avoidance, and studies had not demonstrated that the extra income from tax havens had been used to reinvest in the country. Many myths were bandied around. Investigations had found no sign that communist money had been hidden away in tax havens; that was one of those myths.

There was urgent need for greater transparency. The report’s call for further work and inquiry on this topic should be supported.

THE PRESIDENT (Translation) – Thank you. I call Mr Árnason.

Mr ÁRNASON (Iceland) – I thank our colleague, Mr Van der Maelen, for his report, which is very relevant in these times, particularly for the people of Iceland. Some years ago, the Icelandic banking system grew so big that its scope eventually multiplied to many times the country’s GDP, and our bankers and businessmen were behaving in a financially adventurous manner both at home and abroad. Along with that behaviour came the neo-liberal idea that Iceland would become an international financial centre, a Dubai of the north Atlantic. There was an implicit aim that it would be a tax haven on the European border. But in the autumn of 2008, Iceland crashed and we became the first European victims of the international financial crisis. We are finally beginning to see the light at the end of the tunnel, but among the things we are still dealing with in the former north Atlantic Dubai are antique currency restrictions that nobody really knows how to get rid of.

We have discovered that not only did bankers and certain politicians want to make Iceland into an international financial centre and tax haven, but the businessmen themselves were also active users of offshore financial centres and tax havens, including the likes of Caribbean islands such as Tortola and more homely places such as Jersey and Guernsey in the UK. We have not received our money back from these places – tax money and money from companies that have gone bankrupt – and the same goes for the famous Icesave money of the Germans, the British and the Dutch.

I particularly want to express my agreement with paragraph 11 in the draft resolution, which states that the reforms in question “are essential to upholding good governance, justice and prosperity”. Control, co-ordination and fairness in tax matters are also a prerequisite for a good society. We should aim to have a healthy and stable financial life. That goes hand in hand with having a relatively equal standard of living, economic well-being and a harmonious and democratic place in which to live.

Finally, it is extremely important that these matters are part of the Parliamentary Assembly’s scope. That is why I wanted to express support from Iceland, given our experience of financial adventures and neo-liberal moves towards the creation of a laissez-faire paradise for the well-off.

THE PRESIDENT (Translation) – Thank you, Mr Árnason. I call Mr Bockel.

Mr BOCKEL (France) said that the countries represented at the Council of Europe accounted for 55% of international trade and 35% of financial affairs. They therefore represented an essential cog in the global economy. There had been a pronounced decline in the amount of tax paid by major companies in recent years. This reduced government income, requiring governments to levy higher taxes on their citizens. Some 16% of the tonnage shipped around the world sailed under a flag of convenience.

Europe had to unite to tackle tax havens as well as money laundering and corruption in the financial system. Recent OECD efforts had yielded significant progress in states such as Monaco, Switzerland and Luxembourg. Much remained to be done, though. For example, two-thirds of hedge funds were located in tax havens. This posed a significant challenge for financial stability, a particular concern given the current euro crisis.

The report was a useful and important piece of work that provided a vital contribution to the debate.

THE PRESIDENT (Translation) – Thank you, Mr Bockel, I call Mr Rouquet.

Mr ROUQUET (France) said that the current financial crisis had affected all citizens of Europe and that tax havens had played a key role in contributing to current difficulties. Their existence posed a significant problem for democracy. Combating tax evasion and avoidance was necessary so that governments could raise the revenue to implement their social policies. Four ideas in the report were particularly worth highlighting.

First, it was vital to end tax avoidance, particularly in respect of corporation tax. Tax fortresses around the world needed to be attacked. It was not fair that a small family-run company whose operations were based in one country had to comply with the tax rules of that country while multinational companies could manage their affairs to minimise their tax liabilities. Secondly, it was important to distinguish between states prepared to co-operate on tax avoidance and those that would not co-operate and who welcomed individuals and companies whether or not their activities were dubious. Thirdly, information-sharing and transparency were required for effective supervision of tax havens. Finally, co-operation at European and international level had to be stronger.

The report underscored the fact that the poorest countries were often affected most by capital outflows. A Council of Europe convention in 2011 had sought to address some of the issues raised in today’s debate. Tax fraud deprived states of important sources of income. The report was to be welcomed.

THE PRESIDENT (Translation) – Thank you, Mr Rouquet, I call Mr Negele.

MR NEGELE (Liechtenstein) said that the core business of the Council of Europe was the monitoring of democracy, human rights and the rule of law. The Assembly was not, therefore, the ideal forum for discussion of the important issues under discussion. If those matters were suitable for the Council of Europe, then debate should have occurred within the Political Affairs Committee.

Much of the information in the report was out of date, and it had failed to reflect the fact that there was an ongoing process to tackle tax evasion and criminal activity. The demands made in the resolution were one-sided. For example, they suggested that tax havens were the sole cause of the financial crisis. This was far from accurate. Furthermore, the report did not clearly define what a tax haven was.

It was possible to talk in terms of opaque and co-operative countries. Liechtenstein, however, had worked hard to become compliant with OECD requirements and other international standards. The report was not up to date in that respect.

Other areas of concern included paragraph 11.3 and the recommendation that the United Nations take greater responsibility on tax avoidance in the future. That suggestion ignored the fact that OECD and Global Forum were already doing a good job in that area. Elsewhere, the report called for greater fiscal harmonisation between European countries. It should be for individual states to determine their fiscal policies in line with the wishes of their citizens. The recommendations in the report posed a risk to the rights of the individual to a private life. It was not right to equate secrecy with fraud. The report and resolution would benefit from the amendments proposed.

THE PRESIDENT (Translation) – Thank you, Mr Negele. I call Mr Heer.

Mr HEER (Switzerland) was no champion of tax fraud but cautioned against some of what had been said about tax havens. Multinational companies would clearly seek to optimise their tax position. States had to ensure that tax fraud was not sheltered by secrecy laws. The resolution called for an authority to tackle tax havens, but that bore the risk of doing away with the fundamental right of the individual to a private life.

International regulations had been applied strictly in Switzerland. Moreover, taxes were raised only after a referendum. Rather than seeking tax harmonisation between countries, tax competition should be encouraged. It would generate growth and jobs and required proportionate taxation of companies. It was time to put an end to the “Big Brother” role of the state against the individual.

THE PRESIDENT (Translation) – Thank you, Mr Heer. I call Ms Ottaviani.

Ms OTTAVIANI (San Marino) said that the debate was timely and topical, and thanked the rapporteur for an insightful report. The Government of San Marino agreed with the principles of combating tax fraud and evasion in Europe and the rest of the world. Significant process had been made towards full transparency and co-operation in recent years. It was a shame that the report had not reflected that progress. For example, page 20 quoted data sources from 2010. Since that time, new regulations on company reporting had been introduced as well as improved mechanisms for the exchange of information. The parliament had also approved new laws based on the OECD model. Those reforms had shown that San Marino was determined to act in line with the rest of the world. It was hoped that such new information could be incorporated into the report. That said, the Assembly shared a common objective and the San Marino delegation planned to vote in favour of the motion.

THE PRESIDENT (Translation) – Thank you, Ms Ottaviani. I call Mr Stolfi.

Mr STOLFI (San Marino) agreed with the aims and objectives of the resolution. The Council of Europe had discussed these important issues for a number if years. It was important to remember that San Marino did not consider itself to be a tax haven. It was not the host to many multinational companies, nor was it a destination for bank deposits.

San Marino was trying to keep pace with developments and keep its financial regulation and economy in line with internationally defined principles. Parameters needed to be more strictly defined to ensure clarity. In some evaluations, San Marino was considered transparent, but under others it was rated secretive, which made it difficult for legislators to know where improvements needed to be made. The report lacked a definition of tax havens, which raised some difficulties.

It was not correct to assume that all small states were tax havens. San Marino was not, neither were many others.

THE PRESIDENT (Translation) – Thank you, Mr Stolfi. I call Mr Gardetto.

Mr GARDETTO (Monaco) said that the report had a major shortcoming in that it did not state what a tax haven actually was. Some colleagues had clearly considered Monaco to be a tax haven. However, companies were taxed at 33%, and there were inheritance tax and a significant holding tax for those based outside Monaco. VAT was also charged at 19.6%, in line with France. Furthermore, there was a tax on moveable assets of 7.5%, and Monaco had signed around 30 bilateral OECD-type agreements. Monaco should be considered as being out of all lists of tax havens, be they black, great or rainbow-coloured lists. No problems of tax avoidance would be found in Monaco. It was not a “mailbox company” country. It covered only 2 square kilometres and had just a few thousand residents, but 14 000 workers went into Monaco from France and Italy every day. Companies were attached to Monaco not because it was a tax haven, but perhaps because of the sun of the Côte d’Azure rather than the fog of London. It had good levels of equality, high qualities of education, a philharmonic orchestra and an opera; there was much to attract people to Monaco beyond tax avoidance.

THE PRESIDENT (Translation) – Thank you, Mr Gardetto. I call Mr Moriau.

Mr MORIAU (Belgium) noted that the Assembly had dealt with three very different subjects over the week; sport governance, tax havens and popularist movements. These three subjects were none the less related: in a globalised world, tax havens assisted in distributing the dirty money created through match fixing, and funded regimes that repressed their populations through fear. The rapporteur should be congratulated on a report that was a step in the right direction. There was an element of hypocrisy in the discussion: Chelsea were due to play Bayern Munich, and the two clubs had budgets larger than those of some small countries. The OECD tax haven list was rather cynical, listing only five countries. Claims that companies and individuals set up in certain countries because of the sunshine were disingenuous; it was not because of the climate. Some individuals were known as having “no fixed address”. There had now become a culture of having “no fixed fiscal address”.

In order to achieve harmonisation across Europe, greater co-operation was necessary. Some efforts had been made at G20 level, and also at the International Monetary Fund, and previously within the Council of Europe. So far success had been limited; casino authorities and organised crime needed offshore funding for their survival. Members had an obligation to work to achieve social justice and equality and had to fight against tax evasion in order to achieve those goals.

(Mr Kox, Vice-President of the Assembly, took the Chair in place of Ms Grosskost)

THE PRESIDENT – Thank you, Mr Moriau. That concludes the list of speakers. I call Mr Van der Maelen, rapporteur, to reply. You have four minutes remaining.

Mr Van der MAELEN (Belgium) – Thanks go to colleagues who expressed support for the report. Some of them made interesting suggestions. It is a pity that we heard them only here; if I had heard them earlier, I could have integrated them into the report. Nevertheless, the thinking goes on and we can use these new suggestions.

I would like to react to five points made by colleagues who spoke against. First, they say that in the report the rapporteur does not agree that progress has been made. Sorry, but in my introduction and in the report – I invite Swiss colleagues to look at paragraph 37 – I say that progress has been made.

Where we differ is that those who speak against the report think that we have to stay where we are now and that we do not need to make any further progress. Secondly, they ask why we blame them and say that they respect only the standards of the OECD. They say, “Sorry, but that is enough.” I would try to convince colleagues who speak against the report that they are out of tune. The international community is moving forward and considers the OECD standards to be minimal. I heard colleagues say that their country signed 30 and 40 treaties, but there are 242 jurisdictions with which such treaties have to be signed. Even my example about the agreement between France and Liechtenstein makes it clear to everybody that we are not yet where we have to be.

There is an amendment about the definition of fiscal paradise. I repeat what I have already stated twice in the committee – and it is also written in the report: there is no international agreement on a definition. Yes, the OECD has a definition, but there are other organisations such as the G20, the IMF and others, which have other definitions. It is not wise for us to pick one of the potential definitions and make it official. As I said in the committee, there is a danger, also mentioned by my Belgian friend Mr Moriau, that if we do that and put it in the text of the resolution, someone with bad intentions could say, “Ah! This resolution, in asking for measures against tax havens, implies that only Montserrat, Nauru, Niue, Guatemala and Uruguay – only five countries – are considered by the OECD to be tax havens. All the proposed measures have to be applied only to those five countries.”

I am sorry, but that is not the case. Does anyone here believe that all countries are doing what they ought to do in trying to organise worldwide fiscal justice? I do not think that anyone believes that. I would like to tell people that the international community is moving on automatic exchange of information and against anonymous bank accounts, and pleading for improvements in corporate tax accountability. If we want worldwide fiscal justice, we need such things. I invite all members to vote for this resolution and make this day a good day for honest taxpayers and a bad day for the tax planning industry.

THE PRESIDENT – Thank you, Mr Van der Maelen. Does Ms Maury Pasquier, the Chairperson of the Committee on Social Affairs, Health and Sustainable Development wish to speak? You have two minutes.

Ms MAURY PASQUIER (Switzerland) thanked the President and the rapporteur. This had been a tricky debate and the rapporteur had proven himself able to listen and put his argument with conviction. There was a question over individuals and companies that used all ways and means to avoid paying taxes. This led to inequalities and penalised public finances and threatened good governance and social cohesion. The Council of Europe was no stranger to the current financial difficulties and its impact on unemployment and provision of pensions and welfare. Companies and individuals seeking to avoid applying tax were not being incited to change their behaviour; all countries had to be encouraged to strengthen legislation in order to improve social justice. All groups supported the conclusions of the rapporteur and recognised that tax equality was vital for social cohesion and fairness and was, therefore, of central concern to the Council of Europe.

THE PRESIDENT – The debate is closed.

The Committee on Social Affairs, Health and Sustainable Development has presented a draft resolution to which 20 amendments have been tabled.

We will consider the amendments in the order in which they have been published in the Compendium and the Organisation of Debates.

I remind members that speeches on amendments are limited to 30 seconds. Do you have a point of order, Mr Marquet?

Mr MARQUET (Monaco) noted that he had indicated to the secretariat the previous evening that members were prepared to withdraw certain amendments that were duplications. He hoped that the President had been informed, but if not he was able to offer a list.

THE PRESIDENT – Yes, we have your message about which amendments are to be withdrawn.

We come to Amendment 17, tabled by Mr Boden, Mr Schwaller, Mr Marquet, Mr Falzon, Ms Mutsch, Mr Haupert, Ms Schneider-Schneiter, Ms Fiala, Mr Reimann, Mr Comte, Ms Brasseur, Ms Mateu Pi and Mr Hörster, which is, in the draft resolution, before paragraph 1, to insert the following paragraph:

“According to the OECD, four key factors are used to determine a tax haven: the fact that a jurisdiction imposes no or only nominal taxes; that it lacks transparency; that there are laws or administrative practices preventing the effective exchange of information; and that there is no requirement for the activity to be substantial.”

I call Mr Boden to support Amendment 17.

Mr BODEN (Luxembourg) said that the intention was to support the fight against tax havens. The main shortcoming of the report was that there was no definition of tax havens. In order to improve clarity, he suggested using the OECD definition, which set out four criteria.

THE PRESIDENT – Does anyone wish to speak against the amendment? I call Mr Van der Maelen.

Mr Van der MAELEN (Belgium) – First, as I have already said, there is no international agreement on a definition. Secondly, it would therefore be very unwise for the Council of Europe to pick the OECD definition. Thirdly, there is a danger that someone with bad intentions who reads the resolution will think that all the measures that we are proposing apply only to the five countries that I just mentioned. I ask the Council of Europe not to vote for this amendment because it would make the resolution almost void.

THE PRESIDENT – What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – The committee was opposed to the amendment.

THE PRESIDENT – The vote is open.

Amendment 17 is rejected.

We come to Amendment 1, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 1, to replace the words “activities by secrecy jurisdictions, tax havens and offshore financial centres” with the words “state activities”.

I understand that Mr Marquet does not want to move Amendment 1. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 1?

The amendment is not moved.

We come to Amendment 2, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 3, to replace the words “offshore financial system and jurisdictions considered as tax havens” with the following words: “global financial system”.

I understand that Mr Marquet does not want to move Amendment 2. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 2?

The amendment is not moved.

We come to Amendment 3, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 4, to replace the words “the offshore financial centres and jurisdictions deemed tax havens, as well as their interaction with the mainstream economic activity of other States” with the following word: “States”.

I understand that Mr Marquet does not want to move Amendment 3. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 3?

The amendment is not moved.

We come to Amendment 19, tabled by Mr Sudarenkov, Mr Pushkov, Mr Makhmutov, Mr Lebedev and Mr Knyshov, which is, in the draft resolution, after paragraph 5.3, to insert the following paragraph:

“consider the possibility of setting minimum acceptable tax rates in tax havens to minimise national budgets’ losses.”

I call Mr Sudarenkov to support Amendment 19.

Mr SUDARENKOV (Russian Federation) said that Amendment 19 had been unanimously agreed by the committee. The suggestion was that minimum tax rates be set in tax havens.

THE PRESIDENT – Does anyone wish to speak against the amendment? That is not the case.

What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – In favour.

THE PRESIDENT – The vote is open.

Amendment 19 is adopted.

We come to Amendment 4, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 8, to delete the second sentence.

I call Mr Marquet to support Amendment 4.

Mr MARQUET (Monaco) said that the amendment would improve the clarity of the resolution as no general definitions were included.

THE PRESIDENT – Does anyone wish to speak against the amendment?

I call Mr Hancock.

Mr HANCOCK (United Kingdom) – The amendment is trying to block the sense of the resolution, and so it should be resisted. It does not help the report and it does not clarify anything; in fact, it clouds the report, and we should resist it.

THE PRESIDENT – What is the opinion of the committee ?

Ms MAURY PASQUIER (Switzerland) (Translation) – Against.

THE PRESIDENT – The vote is open.

Amendment 4 is rejected.

We come to Amendment 5, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani,, which is, in the draft resolution, to delete paragraph 9.

I call Mr Marquet to support Amendment 5.

Mr MARQUET (Monaco) said that his reason for putting this amendment was to clarify the report.

THE PRESIDENT – Does anyone wish to speak against the amendment?

I call Ms Andersen.

Ms ANDERSEN (Norway) – The resolution is about one of the most important mechanisms to control this area. The amendment would distort its whole meaning, so we must reject it.

THE PRESIDENT – What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – The committee opposed the amendment.

THE PRESIDENT – The vote is open.

Amendment 5 is rejected.

We come to Amendment 6, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, to delete paragraph 10.3.

I understand that Mr Marquet does not want to move Amendment 6. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 6?

The amendment is not moved.

We come to Amendment 20, tabled by Ms Borzova, Mr Pushkov, Mr Makhmutov, Mr Lebedev and Mr Sudarenkov, which is, in the draft resolution, after paragraph 10.3, to insert the following paragraph: “adopt national legal provisions allowing legal entities registered in offshore territories to carry out business activities in the country only if they disclose their founding members and ultimate beneficiaries.”

I call Ms Borzova to support Amendment 20.

Ms BORZOVA (Russian Federation) said that the amendment would create greater democracy and guard against corruption and criminal activity.

THE PRESIDENT – Does anyone wish to speak against the amendment? That is not the case.

What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – In favour.

THE PRESIDENT – The vote is open.

Amendment 20 is adopted.

We come to Amendment 7, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 11.1, to replace the words “secrecy jurisdictions and tax havens identified in this report” with the following words: “jurisdictions providing secrecy”.

If Amendment 7 is adopted, Oral Amendment 1, which has been received from Mr Boden, will fall.

I call Mr Marquet to support Amendment 7.

Mr MARQUET (Monaco) supported the amendment because referring to tax havens without giving a definition of the term in the report was unusual.

THE PRESIDENT – Does anyone wish to speak against the amendment?

Mr SCHENNACH (Austria) said that this was an attempt to weaken the report and should be opposed.

THE PRESIDENT – What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – Against.

THE PRESIDENT – The vote is open.

Amendment 7 is rejected.

I have received an oral amendment from Mr Boden which reads as follows: “In the draft resolution, paragraph 11.1, to delete the words ‘identified in this report’.”

I remind the Assembly of Rule 33.6, which enables the President to accept an oral amendment or sub-amendment on the grounds of promoting clarity, accuracy or conciliation, and if there is not opposition from 10 or more members to it being debated. If we miss out these words, we do not clarify the position, we do not make the wording more accurate, and we do not seek conciliation. In my opinion, the oral amendment does not meet the criteria of Rule 33.6, and therefore cannot be debated.

We come to Amendment 8, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 11.2, to replace the word “eliminate” with the following words: “adapt to international standards”.

I call Mr Marquet to support Amendment 8.

Mr MARQUET (Monaco) said that it was clear that the opposing views on this report were two ships passing in the night with no understanding of the other. This amendment was proposed to make it clear that the Assembly supported existing international agreements.

THE PRESIDENT – Does anyone wish to speak against the amendment? I call Ms Andersen.

Ms ANDERSEN (Norway) – The amendment would prevent the elimination of legal provisions, and mean countries saying “yes” to tax havens, when our resolution wants to say “no” to them. It therefore contradicts the resolution and we should reject it.

THE PRESIDENT – What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – The committee is against.

THE PRESIDENT – The vote is open.

Amendment 8 is rejected.

We now come to Amendment 9, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 11.4, to delete the word “online”.

I understand that Mr Marquet has withdrawn Amendment 9. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 9?

The amendment is not moved.

We now come to Amendment 10, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, to delete paragraph 11.5.

I understand that Mr Marquet has withdrawn Amendment 10. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 10?

The amendment is not moved.

We now come to Amendments 11 and 18. Amendment 11 is tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, to delete paragraph 11.6.

Amendment 18 is tabled by Mr Boden, Mr Schwaller, Mr Marquet, Mr Falzon, Ms Mutsch, Mr Haupert, Ms Schneider-Schneiter, Ms Fiala, Mr Reimann, Mr Comte, Ms Brasseur, Ms Mateu Pi and Mr Hörster, which is, in the draft resolution, to delete paragraph 11.6.

I draw attention to the fact that Amendments 11 and 18 are identical. As Amendment 11 was tabled first I will call the mover of that amendment to move both amendments.

Mr MARQUET (Monaco) (Translation) – I move the amendments.

THE PRESIDENT – Does anyone wish to speak against the amendments?

I call Mr Hancock.

Mr HANCOCK (United Kingdom) – Again, this amendment goes to the heart of the report and, as Mr Marquet said, two ships are going in different directions. Thank goodness they are because I hope that the ship that I am on is going in the right direction, which supports the rapporteur and the report. Deleting the paragraph would only wreck the report and we should resist it.

THE PRESIDENT – What is the opinion of the committee?

Ms MAURY PASQUIER (Switzerland) (Translation) – The committee is against.

THE PRESIDENT – The vote is open.

Amendments 11 and 18 are rejected.

We now come to Amendment 12, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 11.8, to replace the words “secrecy jurisdictions, tax havens and offshore financial centres” with the following words: “third States”.

I understand that Mr Marquet has withdrawn Amendment 12. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 12?

The amendment is not moved.

We now come to Amendment 13, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, to delete paragraph 11.9.

I understand that Mr Marquet has withdrawn Amendment 13. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 13?

The amendment is not moved.

We now come to Amendment 14, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 11.12, to delete the words “and strengthen the process by shifting from peer review to expert review”.

I understand that Mr Marquet has withdrawn Amendment 14. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 14?

The amendment is not moved.

We now come to Amendment 15, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, after paragraph 11.13, to insert the following paragraph: “fight effectively against social dumping.”

I understand that Mr Marquet has withdrawn Amendment 15. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 15?

The amendment is not moved.

We now come to Amendment 16, tabled by Mr Marquet, Ms Fiala, Mr Schwaller, Ms Mateu Pi, Mr Gardetto, Mr Falzon, Mr Boden, Ms Brasseur, Mr Agramunt, Mr Bardina Pau, Mr Díaz Tejera, Ms Marković, Mr Stolfi, Ms Taktakishvili, Mr Kandelaki, Mr Comte, Mr Reimann, Ms Schneider-Schneiter, Mr Heer, Ms Manzone-Saquet, Ms Mutsch, Mr Haupert and Mr Machavariani, which is, in the draft resolution, paragraph 12, to replace the words “maximising tax receipts in countries where multinationals carry out a substantial part of their activities” with the following words: “guaranteeing the right repartition of multinationals’ tax receipts according their activities in different countries.”

I understand that Mr Marquet has withdrawn Amendment 16. Is that correct?

Mr MARQUET (Monaco) (Translation) – Yes.

THE PRESIDENT – Does anyone wish to move Amendment 16?

The amendment is not moved.

We will now proceed to vote on the whole of the draft resolution contained in Document 12894, as amended.

The vote is open.

The draft resolution in Doc. 12894, as amended, is adopted, with 51 votes for, 11 against and 1 abstention.

3. Decent pensions for all

THE PRESIDENT – The next item of business this morning is the debate on the report entitled “Decent pensions for all”, Document 12896, to be presented by Mr Denis Jacquat on behalf of the Committee on Social Affairs, Health and Sustainable Development.

In order to finish by 1 p.m., we may interrupt the list of speakers at about 12.45 p.m. to allow time for the reply and the vote.

I call Mr Jacquat, rapporteur. You have 13 minutes in total, which you may divide between presentation of the report and reply to the debate.

Mr JACQUAT (France) thanked the President. Over the last few years pension systems had been reformed in many member states. Ageing populations, increased life expectancy and an increasing imbalance between the number of pensioners and the number of contributors were leading to a crisis in pension provision.

Not all countries could guarantee that they could meet their ongoing pension obligations, either in the medium or longer term.

The Council of Europe should encourage the principle of intergenerational solidarity. In addition, special support would be required for some categories which were unable to prepare appropriately for their retirement, such as women who interrupted their professional lives, people with disabilities and migrants.

It was essential that inequalities in the economy were reduced, so that some sections of society were not disadvantaged when it came to saving for their retirement. The sustainability of pension systems had to be improved, with states taking into account factors such as life expectancy when setting the level of contributions.

Effective economic policies were essential if pension schemes were to remain viable in the long-term, and states should consider the impact that policies on employment, etc, would have on pension systems.

Finally, states should consider how to encourage older people on pensions to continue working part-time while they still claimed their pensions. Such individuals should be able to combine their pensions with part-time salaries.

THE PRESIDENT – Thank you, Mr Jacquat. You have nine minutes remaining. I remind members that speaking time in this debate is limited to three minutes.

In the debate I call first Ms Bakir, who will speak on behalf of the European Democrat Group.

Ms BAKIR (Turkey) – I thank the rapporteur for this excellent report, which has the best intentions, and aims to provide a road map for maintaining a sustainable pension system and to guarantee adequate pensions for all, with special emphasis on groups that require special protection.

I strongly believe that, if our aim is to be a united Council of Europe and to achieve greater unity between our members, one of the first steps that we should take is securing a common and harmonised social security system that includes all less-advantaged groups, such as dependent elderly parents, people with disabilities, migrants or women, who are almost always underpaid and seldom have managerial positions throughout their careers. Common European legislation should be worked on in order to facilitate these risk groups’ social progress. It is therefore imperative to look at pension and social security systems in a broader context.

My country, Turkey, is one of the eight countries in Europe that have signed and ratified the treaty of the European Convention on Social Security along with Spain, Portugal, the Netherlands, Luxembourg, Italy, Belgium and Austria. Since 1977, the treaty has not been signed and ratified by many European countries, including those with a gross domestic product per capita four times higher than that of Turkey. It is essential that the European Convention on Social Security and the associated treaty are updated to reflect today’s work situations and lifestyles. A revision that degrades people’s social and human rights to a level below that of bilateral agreements is by no means acceptable. The revised convention should include all risk groups in relation to social security and the Parliamentary Assembly of the Council of Europe should call on all member states to sign and ratify the updated treaty of the European Convention on Social Security. Unless that is done, we cannot really talk about having a united Europe with adequate human rights.

Many countries in Europe have not signed bilateral social security agreements, either. That is another example of the violation of basic human rights. Multilateral co-ordination of social security legislation is one way of achieving greater unity between Council of Europe member states.

I also strongly believe that the Parliamentary Assembly of the Council of Europe should call on all member states to guarantee and provide all social rights without any reductions for immigrant workers. Many immigrant workers in Europe work in risky or difficult work conditions such as in coal mines or construction jobs. There are many reported cases of permanent disabilities arising from injuries sustained at work. Member states of the Council of Europe should guarantee to immigrant workers who are citizens of another Council of Europe member state and who are disabled and entitled to the invalidity pension the same pension rights as native citizens.

THE PRESIDENT – Thank you. I call Ms Guţu, who will speak on behalf of the Alliance of Liberals and Democrats for Europe. You have the floor.

Ms GUŢU (Republic of Moldova) thanked the rapporteur for taking up an important subject. The report was highly topical. Decent pensions were a matter of survival for the elderly. Their financing was complex at a time when youth unemployment was growing, which had resulted in fewer in work being required to fund the incomes of those out of work. At a time of financial crisis, many countries, including Greece, Spain and Romania, sought to reduce their social security liabilities. This was giving rise to social unrest as people took to the street in protest.

The report highlighted the wide variety of pension schemes across Europe and the existence of many inequalities. For example, in France life expectancy for women was 88, whilst that for men was 77. Yet this was not reflected in the respective pension ages. In Moldova, by contrast, life expectancies were much lower.

Another factor was the trend for young people of working age in poor countries to travel to wealthier nations to find work. Often they did not pay into the social security systems of their host country, and they deprived their home countries of tax revenues.

The recommendations contained in the report were welcome, but they did not represent a panacea. Rather, they suggested ways of improving the current situation. For example, some concerned the balance between the capitalisation of pension funds and their funding through pay as you go. Paragraph 5 made an important reference to the role of intergenerational solidarity. Elsewhere, the report highlighted the need for international co-operation and communication. It also referred to the challenges faced in the post-totalitarian states of eastern Europe. In Moldova, for example, the pension system was seen as parasitic and many of its rules were unjust. Police officers were able to receive pensions at an early age after relatively few years of work, and similar systems were in place for the judiciary. However it was not for the Assembly to impose its recommendations on national governments. Rather, members should return to their respective parliaments to encourage reform. This was vital to ensure a good standard of living for all those in old age.

THE PRESIDENT – Thank you. That was a very long three minutes, but we have time, so it is not really a problem.

I call Ms Backman, who will speak on behalf of the Group of the Unified European Left. You have the floor.

Ms BACKMAN (Iceland) – I support most aspects of the report, which raises significant questions regarding the challenges faced by member states’ pension systems in relation to ageing populations, unemployment, individuals’ economic problems and austerity measures. When pensions are paid solely on a pay-as-you-go basis it can have severe consequences for pensioners, who receive less than they need to live a decent life, as is stated in Article 23 of the European Social Charter. I would also like to warn against the strong marketing of pension systems because private pension funds are vulnerable in financial crises and should not be seen as the main choice for the future.

In recent years, there have been examples of people, especially bankers and business people, making deals for and receiving super-pensions. Those payments disrupt the harmony in the economy and in society as a whole.

In Iceland, we have dealt successfully with many of the challenges mentioned in the report. The Icelandic pension system has three pillars: a social security part, which is funded by taxes, a system funded by employers and employees, and private pension funds. Generally, the Icelandic pension system reflects quite effectively the complexity of today’s work situations and lifestyles, as well as demographic developments. We have also been able to protect the elderly quite well in spite of the financial crisis. The pension system is to a large extent the reason for that.

It is important that we do not think of the social security part of pensions as some sort of charity, and it is of the utmost importance that pensioners who rely solely on a social security pension have a decent standard of living well above the national poverty threshold.

Pension systems should take into account the needs of women. The days of women being punished for taking family responsibilities should be over. It is extremely important that the pension system is constructed in such a way that it does not punish in later years those who commit to important family responsibilities, and that men and women enjoy equal rights to study, to work and to take parental leave.

I extend my thanks to the rapporteur for the report.

THE PRESIDENT – Thank you, Ms Backman. The next speaker is Mr Wach, who will speak on behalf of the Group of the European People’s Party.

Mr WACH (Poland) – The report deals with the very important and difficult problem of pension systems that have recently been changed or are currently being changed in many countries. The title of the report may be too generous, as it says “for all,” but the intention is clear: the level of pensions for retired people is threatened by a number of negative factors, which are very well identified and presented in the first five paragraphs of the resolution. How can we counteract and improve the grave situation that is approaching?

Extended paragraph 6 sets out guidelines for what governments need to do, and we should agree to them. Some are of special importance. The first, in sub-paragraph 6.2.1, demands a proper retirement age and an adequate contribution period to meet increasing life expectancy. The second, in paragraph 6.2.4, relates to restrictions to early retirement schemes and the early withdrawal from the labour market for some groups. The third, in paragraph 6.2.2, suggests the design of “national pension systems based on several pillars and a ‘mix’ of sources of pension income.”

The resolution addresses the problem of pension adequacy, recommending a minimum income via a pay-as-you-go public pension system. It is with satisfaction that we read the proposals for pro-family solutions for women and families with children. They are necessary to improve the deteriorating demographic situation in several member states, and are socially just.

The report does not point out the time aspect in retirement system reforms. Adequate lead-in time is required for legislation and the gradual introduction of changes, because in most countries constitutions guarantee the stability of legal provisions in the social sphere. In Poland, my country, we are in the middle of these changes, in particular raising the retirement age for both sexes to 67, and we have seen clearly that it is vital to have early and good explanation and well prepared educational campaigns.

Finally, I express the support of the group for the resolution and recommendations, and I congratulate the rapporteur on his work and its results.

THE PRESIDENT – Thank you, Mr Wach. The next speaker is Ms Barnett, who will speak on behalf of the Socialist Group.

Ms BARNETT (Germany) thanked the rapporteur on behalf of the Socialist Group. The report was informative and useful. Population changes required governments to reconsider pension funding if they were still to benefit the younger generation. There was a balance to be struck between demographic change, and the response to the financial crisis and the need to cut budgets. It was well known that populations in the west were in decline, while life expectancy was increasing. This would lead to an imbalance between those paying into the system and those in receipt of payments. This was why it was necessary to consider reform of government pension schemes by, for example, looking at mixing and matching private and public skills.

In Germany, there was an increasing trend towards the hiring of staff on temporary contracts. They might be made permanent only after a couple of years. This did not create a climate for settling down, buying a home and paying into a pension scheme. Elsewhere, many academic appointments were on a temporary basis, and there was an increased tenancy towards the use of part-time working. Furthermore, in Germany there was no minimum wage and this put downward pressure on wages generally. All of these issues posed massive financial risks for the future. The government should not be paying the pension bill for companies’ decisions. Rather, human beings needed to be at the centre of the process.

Overall, the subject was very appropriate for debate given the proximity of the international day of labour.

THE PRESIDENT – Thank you, Ms Barnett. The rapporteur will reply at the end of the debate, but does Mr Jacquat also wish to reply at this stage? If so, you have a maximum of four minutes.

Mr JACQUAT (France) thanked colleagues for their contributions on an important issue. The report contained a number of good ideas and represented the exchange of good practice. Although it was not possible to impose its recommendations on countries, it could provide advice. It took time to implement pension reform, as Germany had recently experienced.

THE PRESIDENT – Thank you, Mr Jacquat. You have time enough and to spare.

In the debate, I call next Ms Marland-Militello.

Ms MARLAND-MILITELLO (France) congratulated the rapporteurs on their report. Europe’s ageing population posed a fundamental challenge for intergenerational solidarity. The traditional assumption had been that one would work and pay for the pensions of the elderly in the expectation that the next generation would do the same in return. Increasingly however, the younger generation believed this quid pro quo was breaking down. By 2050 it was estimated that 10% of the population would be over the age of 80. Pension reform was, therefore, vital to reflect this extension of life span. The social security system also needed to provide greater opportunity for the elderly to remain in their homes when they became sick.

The state had to invest in support for the elderly and the draft resolution recognised the need to adopt a variety of approaches. She noted two particular initiatives currently under way. The first was in Estonia, where workshops were being organised between elderly and young people, and the second in Belfast where young people were being encouraged to volunteer with elderly people. Such initiatives increased communication and understanding between generations, which would ultimately assist with the necessary reforms. To conclude, the draft resolution was fantastic, and she wholeheartedly supported it.

THE PRESIDENT – Thank you, Ms Marland-Militello. I call Mr Sudarenkov.

Mr SUDARENKOV (Russian Federation) was himself a working pensioner. Normal working life for most people was around 30 to 40 years, before failing health and strength prevented further occupation. He had been lucky, so far, to have been able to work 12 years past Russia’s official retirement age of 60. However, not everyone was so lucky, and there were many cases of people in fact needing to retire as much as 10 years earlier than that age. The question of whether there were simply too many pensioners was immoral: countries had a duty to support those who had contributed to their society.

Russia was undergoing its fifth pension reform since 2002. This was a great challenge in a country the size and complexity of Russia. It was essential to ensure the viability of the schemes as well as the dignity of the elderly. A combination of approaches, including voluntary savings, employer contributions and private savings was being considered, as well as changing the pension age, although that was a politically sensitive topic. The hope was that the system would be fair, but not undermine the contribution that pensioners could make to society and the economy.

THE PRESIDENT – Thank you. I call Mr Schennach.

Mr SCHENNACH (Austria) thanked the rapporteur for a report that succeeded in getting to grips with an important issue. Everyone was entitled to dignity in old age, and achieving a sustainable system would be a key issue both now and in the future. Pension schemes represented a social pact between generations. At present there was a danger that young people would decide that this pact was likely to be broken. If young people lost faith, the pay-as-you-go systems that many countries relied upon would become vulnerable. All countries were experiencing declining populations and increasing life expectancy, which presented a huge challenge to the security of pension provision.

He welcomed the report’s conclusion that there should be a minimum retirement pension. An issue had also been raised regarding immigrants. However, it was necessary to look at the issue from another point of view, as immigrants contributed to the economy and played an important role in ensuring that the social safety net functioned properly.

A large proportion of the current generation of young people were engaged in internships and casual jobs, often with poor employment conditions, and sometimes staying for more than 15 years. This presented a potential time bomb. How could it be ensured that today’s young people would enjoy decent pensions in the future?

THE PRESIDENT – Thank you. I call Ms Borzova.

Ms BORZOVA (Russian Federation) thanked the President and the rapporteur for an excellent report on a subject that was topical and necessary, given the current financial crisis. Russia supported the points made in the draft recommendation. Russia was working hard to introduce pension reforms and hoped to improve viability and potentially increase pension rates. In 2010, Russia had introduced a 40 % increase in the state pension. This had been absolutely necessary to address the very low pension rates that had existed previously. There were significant demographic challenges to address; an ageing population could lead to an imbalance between pension receivers and those working and contributing to schemes. Both national and political will existed to address these problems and the Russian Government was committed to fulfilling its obligations.

The indexation of pensions had helped to protect people against inflation, and social welfare top-ups ensured the security of those who needed it. Russia had one of the lowest life expectancies in Europe, at only 64 years for men. However, it also had a high proportion of disabled people. There was a risk that increasing the pension age could result in higher unemployment.

The recommendations and principles of the draft resolution would contribute to improving pension provisions and should be supported.

THE PRESIDENT – Thank you, Ms Borzova. I call Mr Ghiletchi.

Mr GHILETCHI (Republic of Moldova) – I thank Mr Denis Jacquat for presenting a very good report about pensions. Unfortunately, the economic and demographic crisis, which affects most member states, is having a very negative impact on pension systems. As a result, many old people across the continent are becoming vulnerable and exposed to serious challenges.

When I read the title of the report, “Decent pensions for all”, I thought that someone had finally found the magic formula that would make all pensioners across Europe happy. However, after I read the report, I realised that the pensions miracle has to be postponed. The truth of the matter is that it is not possible to have a magic solution for this issue. There is no state in Europe or anywhere else in the world that has a pensions haven in the same way as there are tax havens, which we discussed this morning.

I am glad that the rapporteur underlined the fact that the aim of the report is not to give specific recommendations but to shed light on a difficult problem and provide guidelines for guaranteeing decent pensions for all. Another benefit of the report is the sharing of good practice, which helps member states to learn from each other – learn not only from successes, but from mistakes.

The report emphasises two big challenges – a negative demographic trend and a global economic and financial crisis – and I would like to make several comments about those issues.

First, I believe that one of the causes of the demographic winter in Europe is the family policy that has been promoted in past decades. A hedonistic and selfish lifestyle has pushed the altruistic and family lifestyle into a corner. That needs to change. It is encouraging to see that some member states are now moving towards a family-friendly policy, but there is still a lot to be done to change the negative demographic trend into a positive one.

Secondly, it is obvious that the global economic and financial crisis will have a serious impact on pensions and pension systems. For that reason, it is imperative that we adopt measures that will minimise that negative impact. At the same time, we need urgent measures to relaunch the economy and increase employment. That will not be easy, because governments must reduce public debt to avoid such serious crises in the future.

Finally, I underline the necessity for international co-operation on pensions, given that pensions are increasingly becoming a transnational matter. Unfortunately, my country of Moldova is getting close to what the rapporteur calls a time bomb, when there will be only one worker for every pensioner. The main reason for that is not demography, although the trend is negative, but the fact that almost 1 million Moldovans – approximately half the adult population of Moldova – are working abroad.

The Parliamentary Assembly of the Council of Europe should call on all member states to sign and ratify bilateral agreements on social security. In that way, our citizens would be protected, regardless of the country where they used to work. It is important to have social cohesion on a national level, but it is also important to achieve that cohesion at a European level. On that, I agree wholeheartedly with Ms Guţu from Moldova and Ms Bakir from Turkey. Even if it looks as if only those MPs getting close to pension age are in the Assembly, let us support the resolution and recommendation, aware that decent pensions for all should remain our long-term perspective.

THE PRESIDENT – Thank you very much, Mr Ghiletchi. The last speaker in the debate is Mr Fritz.

Mr FRITZ (Germany) thanked the rapporteur. The general thrust of the report, considering the need to ensure decent pensions for all and avoid poverty in old age, was one that everyone could support. Members needed to ensure that they were prepared for the demographic changes that were taking place and that future generations could be protected. Levels of benefits needed to be financed sustainably; pay-as-you-go systems needed to be balanced with other schemes. In Germany a mixture of pension schemes was available, and citizens were encouraged to take out private pensions and companies to provide contributions to workers. Both needed to be encouraged. The draft recommendation was too narrowly focused on pay-as-you-go systems and the call for pay-as-you-go systems to correspond to national income could be too high an expectation. It was down to individual member states to decide the best approach, but it was vital that nobody should be afraid of old age.

THE PRESIDENT – Thank you, Mr Fritz. That concludes the list of speakers. I call Mr Jacquat, rapporteur, to reply. You have nine minutes.

Mr JACQUAT (France) thanked all who had contributed to the debate. There had been clear unanimity to the proposals contained in the report. It was clear that the committee had spoken to the right people about the concerns and issues around pensions in Europe. A key concern was to ensure parity of European pension systems, possibly through a mix of private schemes and state contributions. Regardless of the system, all should be allowed access.

Pensioners came in two categories. There were those who could pay and those who could not. The latter group often found themselves in difficulty. Pensions had to be available to all. It was a question of solidarity. States should ensure that those who had had trouble building up a pension throughout their life were not disadvantaged in old age. In addition, inequality in the world of employment could extend beyond working careers and disadvantage people later in life. That should be tackled by addressing inequalities in the workplace.

It was important that countries shared information about positive elements in their pension policies so that best practice could be shared. Pension policies could not be changed frequently, as they were medium to long-term policies and could benefit from prolonged and on-going exchange of information.

Early retirement should be discouraged as it affected the overall integrity of the pension system. The elderly should be encouraged to take part-time jobs, supplementing their pension with a salary, to ensure that their working experience continued to be transmitted to the next generation.

A key problem was that the younger generation no longer believed in pensions. They were uncertain whether they would actually receive one when they reached pension age. The solution was to ensure that people made appropriate pension contributions now, so that the pension systems were viable later.

The EU’s pension systems were generally excellent, but more work could be done.

Comments made in the debate had been constructive and positive. Such attitudes were necessary if effective changes to the pensions systems were to be made.

THE PRESIDENT – Thank you. Does Ms Maury Pasquier, Chairperson of the Committee on Social Affairs, Health and Sustainable Development, wish to speak?

Ms MAURY PASQUIER (Switzerland) thanked the rapporteur. The report had set out the major demographic challenges faced by member states, and made worse by the recent financial crisis. Nevertheless, the rights of pensioners had to be respected. Members of the Assembly had to make sure that their governments guaranteed the viability of their pension systems.

THE PRESIDENT – Thank you.

The debate is closed.

The Committee on Social Affairs, Health and Sustainable Development has presented a draft resolution and a draft recommendation to which no amendments have been tabled.

We will now proceed to vote on the whole of the draft resolution contained in Document 12896.

The vote is open.

The draft resolution in Doc. 12896 is adopted unanimously, with 39 votes for, none against and no abstentions.

We will now proceed to vote on the whole of the draft recommendation contained in Doc. 12896.

The vote is open.

The draft recommendation in Doc. 12896 is adopted unanimously, with 41 votes for, none against and no abstentions.

I congratulate Mr Jacquat on the recommendation and the resolution.

4. Explosions in Ukraine

THE PRESIDENT – Dear colleagues, I have to tell you that four explosions have happened in the east Ukrainian city of Dnepropetrovsk. As far as we know, they have injured 12 people. On your behalf, I would like to convey our sympathy for the victims to Mr Popescu of the Ukrainian delegation and underline again that this Assembly condemns any act of terrorism. Let us hope that those who are injured will survive. We wish them all the best.

5. Reference to committees

THE PRESIDENT – The Bureau has proposed a number of references to committees for ratification by the Assembly. They are set out in document AS/Inf (2012) 06.

Is there any objection to the proposed references to committees?

There is no objection, so the references are approved.

6. General rapporteurs: terms of reference

THE PRESIDENT – The Bureau has proposed for ratification the terms of reference for two general rapporteurs: the first on the abolition of the death penalty, and the second on the budget and intergovernmental programme.

They are set out in document AS/Bur (2012) 29.

Is there any objection to the proposed terms of reference?

There is no objection, so the terms of reference are approved.

7. Voting records

THE PRESIDENT – Before I close the part-session, I have to give you the traditional list of best voters in the April part-session. The competition becomes more difficult every time, because we now have eight winners, which ensures that Andy Gross is not the only winner. In alphabetical order the winners, who participated in all the votes, are: Ms Karin Andersen from Norway, Mr Joseph Falzon from Malta, Mr Andreas Gross from Switzerland, Mr Ertuğrul Kürkçü from Turkey, Ms Carina Ohlsson from Sweden, Mr René Rouquet from France, Mr Valeriy Sudarenkov from the Russian Federation and, last but not least, Lord Tomlinson of the United Kingdom. I congratulate you all – you are exemplary colleagues. Of course, the precious gifts that we offer you will be presented now.

8. End of the part-session

THE PRESIDENT – Dear colleagues, we have now come to the end of our business.

I would like to thank all members of the Assembly, particularly rapporteurs of committees, for their hard work during this part-session. I would also like to thank the staff, both permanent and temporary, who have worked hard to make the part-session a success.

The third part of the 2012 session will be held from Monday 25 June to Friday 29 June 2012.

I declare the second part of the 2012 session of the Parliamentary Assembly of the Council of Europe closed.

(The sitting was closed at 12.55 p.m.)

CONTENTS

1.       Written declaration

2.       Promoting an appropriate policy on tax havens

Presentation by Mr Van der Maelen of report of the Committee on Social Affairs, Health and Sustainable Development (Doc. 12894)

Speakers:

Mr Gross (Switzerland)

Ms Bakir (Turkey)

Mr Hancock (United Kingdom)

Ms Andersen (Norway)

Mr Volontè (Italy)

Mr Toshev (Bulgaria)

Mr. Marquet (Monaco)

Mr. Pfister ((Switzerland)

Mr. Recordon (Switzerland)

Mr Schwaller (Switzerland)

Mr. Reimann (Switzerland)

Mr. Boden (Luxembourg)

Mr Sudarenkov (Russian Federation)

Mr Árnason (Iceland)

Mr. Bockel (France)

Mr. Rouquet (France)

Mr Negele (Liechtenstein)

Mr Heer (Switzerland)

Ms Ottaviani (San Marino)

Mr. Stolfi (San Marino)

Mr. Gardetto (Monaco)

Mr. Moriau (Belgium)

Replies:

Mr Van der Maelen (Belgium)

Ms Maury Pasquier (Switzerland)

Amendments 19 and 20 adopted

Draft resolution in Doc. 12894, as amended, adopted.

3.       Decent pensions for all

Presentation by Mr Jacquat of report of the Committee on Social Affairs, Health and Sustainable Development (Doc. 12896)

Speakers:

Ms Bakir (Turkey)

Ms Guţu (Republic of Moldova)

Ms Backman (Iceland)

Mr Wach (Poland)

Ms Barnett (Germany)

Ms Marland-Militello (France)

Mr Sudarenkov (Russian Federation)

Mr Schennach (Austria)

Ms Borzova (Russian Federation)

Mr Ghiletchi (Republic of Moldova)

Mr Fritz (Germany)

Replies:

Ms Maury Pasquier (Switzerland)

Draft resolution in Doc. 12896 adopted unanimously

Draft recommendation in Doc. 12896 adopted unanimously

4.        Explosions in Ukraine

5.       Reference to committees

6.       General rapporteurs: terms of reference

7.       Voting records

8.       Closure of the part-session

Appendix

Representatives or Substitutes who signed the Attendance Register in accordance with Rule 11.2 of the Rules of Procedure. The names of Substitutes who replaced absent Representatives are printed in small letters. The names of those who were absent or apologised for absence are followed by an asterisk.

Francis AGIUS*

Pedro AGRAMUNT

Arben AHMETAJ*

Alexey Ivanovich ALEKSANDROV/Yury Solonin

Miloš ALIGRUDIĆ*

José Antonio ALONSO/Delia Blanco

Karin ANDERSEN

Donald ANDERSON*

Florin Serghei ANGHEL*

Khadija ARIB*

Mörður ÁRNASON

Francisco ASSIS*

Þuriður BACKMAN

Daniel BACQUELAINE*

Viorel Riceard BADEA*

Gagik BAGHDASARYAN*

Pelin Gündeş BAKIR

Gerard BARCIA DUEDRA*

Doris BARNETT

José Manuel BARREIRO*

Deniz BAYKAL

Marieluise BECK*

Alexander van der BELLEN*

Anna BELOUSOVOVÁ*

José María BENEYTO*

Deborah BERGAMINI*

Robert BIEDROŃ*

Grzegorz BIERECK*

Gülsün BİLGEHAN*

Oksana BILOZIR*

Brian BINLEY*

Roland BLUM*

Jean-Marie BOCKEL

Eric BOCQUET*

Olena BONDARENKO*

Olga BORZOVA

Mladen BOSIĆ*

António BRAGA*

Anne BRASSEUR

Márton BRAUN*

Federico BRICOLO*

Ankie BROEKERS-KNOL*

Piet DE BRUYN*

Patrizia BUGNANO*

André BUGNON/Maximilian Reimann

Natalia BURYKINA*

Sylvia CANEL*

Mevlüt ÇAVUŞOĞLU*

Mikael CEDERBRATT*

Otto CHALOUPKA*

Vannino CHITI*

Christopher CHOPE

Lise CHRISTOFFERSEN

Desislav CHUKOLOV*

Lolita ČIGĀNE*

Boriss CILEVIČS

James CLAPPISON*

Ms Deirdre CLUNE*

M. Georges COLOMBIER/André Schneider

Agustín CONDE*

Titus CORLĂŢEAN*

Igor CORMAN*

Telmo CORREIA*

Carlos COSTA NEVES*

Cristian DAVID*

Joseph DEBONO GRECH*

Giovanna DEBONO/ Joseph Falzon

Armand De DECKER/Dirk Van Der Maelen

Arcadio DÍAZ TEJERA*

Peter van DIJK*

Klaas DIJKHOFF*

Şaban DİŞLİ

Karl DONABAUER*

Daphné DUMERY*

Alexander (The Earl of) DUNDEE*

Josette DURRIEU*

Baroness Diana ECCLES*

József ÉKES

Tülin ERKAL KARA

Gianni FARINA*

Nikolay FEDOROV*

Relu FENECHIU*

Vyacheslav FETISOV*

Doris FIALA/Gerhard Pfister

Daniela FILIPIOVÁ*

Axel E. FISCHER

Jana FISCHEROVÁ*

Gvozden Srećko FLEGO

Paul FLYNN*

Stanislav FOŘT*

Hans FRANKEN*

Jean-Claude FRÉCON/Jean-Pierre Michel

Erich Georg FRITZ

Martin FRONC

György FRUNDA*

Giorgi GABASHVILI*

Alena GAJDŮŠKOVÁ*

Sir Roger GALE*

Jean-Charles GARDETTO

Tamás GAUDI NAGY*

Valeriu GHILETCHI

Sophia GIANNAKA*

Paolo GIARETTA*

Michael GLOS*

Obrad GOJKOVIĆ*

Jarosław GÓRCZYŃSKI*

Svetlana GORYACHEVA*

Martin GRAF*

Sylvi GRAHAM

Andreas GROSS

Arlette GROSSKOST

Dzhema GROZDANOVA*

Attila GRUBER*

Antonio GUTIÉRREZ*

Ana GUŢU

Carina HÄGG*

Sabir HAJIYEV*

Andrzej HALICKI*

Mike HANCOCK

Margus HANSON

Davit HARUTYUNYAN*

Håkon HAUGLI

Norbert HAUPERT/Fernand Boden

Oliver HEALD*

Alfred HEER

Olha HERASYM'YUK*

Andres HERKEL*

Adam HOFMAN*

Serhiy HOLOVATY*

Jim HOOD/Michael Connarty

Joachim HÖRSTER

Anette HÜBINGER*

Andrej HUNKO*

Susanna HUOVINEN*

Ali HUSEYNLI*

Rafael HUSEYNOV*

Stanisław HUSKOWSKI*

Shpëtim IDRIZI*

Željko IVANJI*

Igor IVANOVSKI*

Tadeusz IWIŃSKI*

Denis JACQUAT

Roman JAKIČ*

Ramón JÁUREGUI*

Michael Aastrup JENSEN*

Mats JOHANSSON*

Birkir Jón JÓNSSON/Gunnar Bragi Sveinsson

Armand JUNG*

Antti KAIKKONEN*

Ferenc KALMÁR*

Božidar KALMETA*

Mariusz KAMIŃSKI*

Michail KATRINIS*

Burhan KAYATÜRK

Bogdan KLICH*

Haluk KOÇ

Igor KOLMAN*

Tiny KOX

Marie KRARUP*

Borjana KRIŠTO*

Václav KUBATA*

Pavol KUBOVIČ*

Jean-Pierre KUCHEIDA*

Dalia KUODYTĖ

Ertuğrul KÜRKÇÜ

Athina KYRIAKIDOU

Henrik Sass LARSEN*

Igor LEBEDEV*

Jean-Paul LECOQ*

Harald LEIBRECHT*

Terry LEYDEN*

Inese LĪBIŅA-EGNERE*

Yuliya LIOVOCHKINA*

Lone LOKLINDT*

François LONCLE*

Jean-Louis LORRAIN*

George LOUKAIDES/Stella Kyriakidou

Younal LOUTFI*

Saša MAGAZINOVIĆ*

Philippe MAHOUX*

Gennaro MALGIERI*

Nicole MANZONE-SAQUET/Bernard Marquet

Pietro MARCENARO*

Milica MARKOVIĆ*

Muriel MARLAND-MILITELLO

Meritxell MATEU PI*

Pirkko MATTILA*

Frano MATUŠIĆ*

Liliane MAURY PASQUIER/Luc Recordon

Michael McNAMARA*

Sir Alan MEALE*

Ermira MEHMETI DEVAJA*

Evangelos MEIMARAKIS*

Ivan MELNIKOV*

Nursuna MEMECAN

José MENDES BOTA*

Dragoljub MIĆUNOVIĆ*

Jean-Claude MIGNON/Christine Marin

Dangutė MIKUTIENĖ/Birutė Vėsaitė

Akaki MINASHVILI*

Krasimir MINCHEV*

Federica MOGHERINI REBESANI*

Andrey MOLCHANOV*

Jerzy MONTAG*

Patrick MORIAU

João Bosco MOTA AMARAL

Arkadiusz MULARCZYK*

Alejandro MUÑOZ-ALONSO

Lydia MUTSCH*

Philippe NACHBAR*

Adrian NĂSTASE*

Mr Gebhard NEGELE

Pasquale NESSA*

Fritz NEUGEBAUER*

Baroness Emma NICHOLSON*

Elena NIKOLAEVA*

Tomislav NIKOLIĆ*

Aleksandar NIKOLOSKI*

Carina OHLSSON

Joseph O'REILLY*

Sandra OSBORNE*

Nadia OTTAVIANI

Liliana PALIHOVICI*

Vassiliki PAPANDREOU*

Eva PARERA

Ganira PASHAYEVA*

Peter PELLEGRINI*

Lajla PERNASKA*

Johannes PFLUG*

Alexander POCHINOK*

Ivan POPESCU

Lisbeth Bech POULSEN*

Marietta de POURBAIX-LUNDIN

Cezar Florin PREDA*

Lord John PRESCOTT*

Jakob PRESEČNIK*

Gabino PUCHE*

Alexey PUSHKOV*

Valeriy PYSARENKO*

Valentina RADULOVIĆ-ŠĆEPANOVIĆ*

Elżbieta RADZISZEWSKA*

Mailis REPS*

Andrea RIGONI*

François ROCHEBLOINE*

Maria de Belém ROSEIRA*

René ROUQUET

Marlene RUPPRECHT

lir RUSMALI*

Armen RUSTAMYAN*

Branko RUŽIĆ*

Volodymyr RYBAK*

Rovshan RZAYEV*

Džavid ŠABOVIĆ*

Giacomo SANTINI*

Giuseppe SARO*

Kimmo SASI*

Stefan SCHENNACH

Marina SCHUSTER*

Urs SCHWALLER

Senad ŠEPIĆ*

Samad SEYIDOV*

Jim SHERIDAN*

Mykola SHERSHUN/Oleksiy Plotnikov

Adalbi SHKHAGOVEV*

Robert SHLEGEL/Anvar Makhmutov

Ladislav SKOPAL*

Leonid SLUTSKY*

Serhiy SOBOLEV

Roberto SORAVILLA*

Maria STAVROSITU*

Arūnė STIRBLYTĖ/Arminas Lydeka

Yanaki STOILOV*

Fiorenzo STOLFI

Christoph STRÄSSER*

Karin STRENZ*

Giacomo STUCCHI*

Valeriy SUDARENKOV

Björn von SYDOW/Jonas Gunnarsson

Petro SYMONENKO*

Vilmos SZABÓ*

Melinda SZÉKYNÉ SZTRÉMI*

Chiora TAKTAKISHVILI*

Giorgi TARGAMADZÉ*

Dragan TODOROVIĆ*

Romana TOMC*

Lord John E. TOMLINSON

Latchezar TOSHEV

Petré TSISKARISHVILI*

Mihai TUDOSE*

Ahmet Kutalmiş TÜRKEŞ

Tuğrul TÜRKEŞ

Konstantinos TZAVARAS*

Tomáš ÚLEHLA*

Ilyas UMAKHANOV*l

Giuseppe VALENTINO/Renato Farina

Miltiadis VARVITSIOTIS*

Stefaan VERCAMER*

Anne-Mari VIROLAINEN*

Luigi VITALI*

Luca VOLONTÈ

Vladimir VORONIN*

Tanja VRBAT*

Konstantinos VRETTOS*

Klaas de VRIES*

Nataša VUČKOVIĆ*

Piotr WACH

Johann WADEPHUL*

Robert WALTER*

Katrin WERNER*

Renate WOHLWEND/Doris Frommelt

Karin S. WOLDSETH/Ingjerd Schou

Gisela WURM*

Karl ZELLER*

Kostiantyn ZHEVAHO*

Emanuelis ZINGERIS

Guennady ZIUGANOV*

Naira ZOHRABYAN*

Vacant Seat, Cyprus*

ALSO PRESENT

Representatives and Substitutes not authorised to vote:

Liliane MAURY PASQUIER

Observers:

Rosario GREEN MACÍAS

Hervé Pierre GUILLOT

Partners for Democracy:

Bernard SABELLA