Council of Europe Parliamentary Assembly

THE PRESIDENT. – The first order of the day is the examination of credentials of a member of the Assembly from the Irish delegation, which have been submitted to the President in accordance with Rule 6.

The name of the Substitute is in Document 11368, Addendum 3. If the credentials are not contested, they will be ratified.

2. Organisation of debates

THE PRESIDENT. – This afternoon the business is very full, with debates on four reports, on which we have a large number of delegates wishing to speak.

We will have to interrupt the list of speakers in the debate on regionalisation in Europe at about 4.10 p.m. in order to leave sufficient time for the replies on behalf of the committees and the votes.

The OECD debate will start at about 4.20 p.m. and the speakers list will be interrupted at 5.40 p.m. for replies and a vote.

At 5.50 p.m., we shall start the third debate, on the political dimensions of the Council of Europe budget, and cut off the list of speakers around 6.30 p.m.

Finally, we will start the debate on a European drug convention at 6.40 p.m., and interrupt the list of speakers at 7.20 p.m. in order to finish the sitting at 7.30 p.m.

Are these arrangements agreed?

They are agreed.

I remind the Assembly that it was agreed on Monday to limit speaking time in debates to four minutes.

3. Regionalisation in Europe

THE PRESIDENT. – The first item of business this afternoon is the debate on the report on Regionalisation in Europe presented by Mr de Puig on behalf of the Committee on the Environment, Agriculture and Local and Regional Affairs, Document 11373.

The list of speakers, which has been distributed, closed at noon today. Two amendments have been tabled.

I call Mr de Puig. You have eight minutes.

Mr DE PUIG (Spain) said that within the last fifteen years, 15 new states had emerged in Europe. The Assembly had been in support of this dynamic growth, for example, through its resolutions on Montenegro. The European Union and the Committee of Ministers would at some time have to take a position on Kosovo.

Although it was unlikely that 14 to 16 new states would emerge over the next fifteen years, regionalisation was proceeding apace. Regionalisation was characterised in different forms, whether they be known as provinces, autonomous regions or Länder, for example. Minorities were often vociferous in their separatist calls for new regions to be created. However, it should be remembered that they were just minorities and in democracies it was the view of the majority that prevailed.

Regionalisation was a positive step forward for European Union citizens because it enabled decisions to be taken at a level closest to the individual. Regions should not be created where there is no interest to be represented. European Union regional funds had at times forced the hands of some member states to provide justification for a region in order to seek a share of the distribution. However, it was for the state to decide whether it was appropriate for a region to exist.

The report encouraged the process of regionalisation, but it would be necessary to avoid developments that would be detrimental to Europe as a whole.

THE PRESIDENT. – Thank you, Mr de Puig. I call Mr Dupraz on behalf on the Alliance of Liberals and Democrats for Europe.

Mr DUPRAZ (Switzerland) said that people lived in neighbourhoods first and regions and countries second. Thus, regions provided the important link between where a person lived and the country which they inhabited. It was at the regional level that often the most important legislation to the citizen was enacted.

Three levels of governance operated within Switzerland, and the report gave full descriptions of many other models in existence in the European Union. Each country was sovereign and free to organise its governance system as it saw fit. However, the process of regionalisation was imperative because it empowered people in the decision–making process. Furthermore, regionalisation allowed the hopes and aspirations of ethnic groups to be met.

He congratulated the rapporteur on his report and supported the excellent recommendation that called for the promotion of regionalisation.

THE PRESIDENT. – Thank you. I call Mr Wilshire on behalf of the European Democratic Group.

Mr WILSHIRE (United Kingdom). – As a fellow member of the British delegation, it gives me pleasure to welcome you to the Chair, Mr President. Those who understand British politics will see a rich irony in your presiding over a debate on regions and regionalism.

The European Democratic Group approaches regionalism with caution and I approach it with suspicion. It can too easily become yet another wasteful tier of bureaucracy. It can even become a means of undermining a nation-state. On top of that, the debate about regionalism is often misunderstood.

As I see it, regions are straightforwardly part of a nation-state that has a shared culture, traditions and history. However, that sense of sharing stops short at the desire to set up a nation-state. It is important to understand that any sense of regional identity has to be, and must be allowed to be, less important than the nation-state. I worry that some of the recommendations in the report run the risk of unsettling that established relationship. Over-emphasising regionalism genuinely risks undermining the nation-state. I am convinced that that is why the European Union is so keen on regionalism. It believes that if regionalism is encouraged, the nation-states will be broken up and we will end up with artificial regions belonging to an artificial country called the United States of Europe.

Over-enthusiasm for regionalisation can easily lead to the creation of artificial regions. The rapporteur mentioned that. My country, England – I stress England, not the United Kingdom – is a classic example. Our sense of national identity is more powerful than our sense of regional division. My constituency is being forced into an artificial entity called the south-east region. It means nothing; we do not know where it is and we do not want it. That is a bad move.

Artificial regions can easily become a means of setting up an additional tier of bureaucracy. The justification is that it brings things closer to the people. It does not – it takes things away. It means devolving a little bit of power from the centre and taking away a lot of power from local communities, which is where power belongs. I have seen regionalism become the enemy of local democracy.

We Conservatives believe in the nation-state above all else. We are implacably opposed to a Europe of the regions. We Conservatives rejoice in regional culture – we want to protect and encourage it. However, we are against creating remote regional bureaucracies. If some countries in the Council of Europe feel comfortable with their regional structure, so be it. They are sovereign nations that can choose their structures for themselves, but please do not force an artificial regionalism on the rest of us.

THE PRESIDENT. – Thank you. I call Ms Konečná on behalf of the Group of the Unified European Left.

Ms KONEČNÁ (Czech Republic). – I wish to express my opinion of regionalisation in Europe. I think that we all agree that regionalisation and improved self-government are essential and advantageous for all of us. However, we must be careful about the way in which we implement that.

Regionalisation must go hand in hand with the process of unification in Europe. How can we guarantee that? National governments may not be able to ensure permanent and effective state action throughout the entire territory. Self-government could be a solution.

How can we guarantee that regional government will fully respect national and European policy? Spain is a good example, where the Basque part prefers its own policy. Do we have local politicians who are sufficiently skilled? Some European states can experience problems with training regional politicians for their new functions. We do not know how to ensure that they all receive quality information.

We do not need to divide each country into more or less artificial administrative units to allocate European funds. That can easily be done but we must remember that in some cases changes can lead to separatist movements, and nations can develop problems internally and perhaps with international policy and relations.

I agree that there is less nationalism in states with a high level of self-government. Regionalism can positively change the whole of society. It was a characteristic of the Europe of former times and we can take advantage of that. Despite that, I am afraid that we must find the correct instruments for our future processes, which are still missing. We must watch out for possible separatist processes and an unbalancing of regions. I believe that we can achieve that goal, but we must remember that diversity, plurality and unification are the most important features of today’s Europe.

We must be prudent when we speak about regionalism; it is suitable when the citizens can benefit from regional policy, but dangerous when the aim of one region is to change living standards at the expense of its own citizens. In the light of the conflict in Kosovo, we must be careful about our modern policy of regionalism.

Regionalism should assist in the integration of Europe, protect the rights of nations and serve its citizens. Modern regionalism must be the instrument of humanism, not a source of conflict.

THE PRESIDENT. – Thank you. I call Mr Mendes Bota on behalf of the Group of the European People’s Party.

Mr MENDES BOTA (Portugal) said that most European states were regionalised. However, Europe was travelling at three speeds towards regionalisation; some states were centralised, some part-regionalised and some federal. The regional and federal states were moving towards a decentralisation of power. It was important that power should move closer towards the citizens of each state. Some states were concerned that regionalisation would invite the creation of many new states. He did not believe this was the case. There were a minority of nationalists in Europe seeking to create their own states.

He thanked the rapporteur for an excellent report and noted that many European Union directives had local or regional obligations. It was important to consider both the positive and negative impacts of regionalisation. He believed there were many positive impacts. He said regionalism, regionalisation, devolved regions and federalism were all types of decentralisation. There was no single model used; each state had created its own regionalisation. He said the debate on regionalisation was important and the parliamentarians of the Assembly had an obligation to promote that debate.

THE PRESIDENT. – Thank you. I call Mr Kallio.

Mr KALLIO (Finland). – Mr President, dear colleagues, first of all I want to thank Mr de Puig for his excellent report, which is a valuable and important contribution to the European regionalisation process. It is easy to agree with the recommendations of the report and it is also good to find that Mr de Puig is well aware of the situation of the regions in Finland, where the regionalisation process is under way. The main question in our process is how to increase the power of our regions.

Regionalisation in Europe is very much about identity and interests. As individuals and as nations, we assume several identities – local, national, European and even global. We need all of them and we have to make them interact inclusively, not exclusively.

In many member states of the Council of Europe, globalisation of economies and deepening integration are perceived as threats. In that situation, some people seek to strengthen their national identity by shunning the European project and turning inwards. Regrettably, that often leads to nationalism, protectionism and popularism.

I think that in Europe we have to seek a solution that favours both social security and a prosperous economy. In that regard, regional self-government is a good option because it can give an impetus to the economy and be a guarantee for social peace. The whole point of regionalisation is to increase regional autonomy and allow each region to go for the policies its inhabitants want.

Today, the growing importance of spatial factors in development is recognised. The new importance of the spatial dimension of economic development means that regions must have the capacity for independent action so that they can become motors of development.

When we consider Europe’s competitiveness, we see that the regions play a key role. In reality, it is regions in Europe that provide the environment for productive and innovation-friendly investment. They can speed up job creation and help to raise the level of education and training. They facilitate partnership between research centres and universities, and see to it that living conditions improve. Local and regional authorities have the practical tools necessary for stimulating growth and employment. For us, competitiveness is not measured by comparing European and American growth and wealth figures. Instead, it needs to be measured by its ability to strengthen social and territorial cohesion by affirming knowledge, innovation and human capital.

Finally, I want to emphasise the fact that, at this time of globalisation, the application of the principle of subsidiarity creates counterweights and should therefore be a main target for our societies. That is why the trend towards regionalisation is important. Moreover, it is a guarantee of democracy in Europe, which is why the report is very significant.

THE PRESIDENT. – Thank you. I call Mr Van den Brande.

Mr VAN DEN BRANDE (Belgium). – Thank you, Mr President and dear colleagues. First, I want to congratulate my good colleague, Mr de Puig. As a professor, he could simply have gone for a description of the phenomenon, but he did not. He has described the phenomenon of regionalisation, but at the same time he has given some guidelines and some approaches, and this is the right moment to discuss such things in our Council of Europe Assembly.

There are differences in regionalism as a concept; it can be a way of considering how good governance can be put in place. Regionalisation can help to implement good governance in different ways. I agree with some of my colleagues that we should not go for one single model all over Europe. We have to take into account tradition and cultural heritage.

On the other hand, and here I wholly disagree with Mr Wilshire, regionalism and regionalisation are questions of good governance and are not just an issue for the 21st century. Even in the 14th century, buon governo described not only good citizenship but also good governance.

One of the most important challenges these days is how to deal with public responsibility as a Christian Democrat, although it is not just a problem for that ideology. We need to go beyond the fiction that there is only one level of decision making; we need to find answers for all the questions. That is why regionalism and regionalisation are the right way to implement and give content to what we might call multi-level governance. We should not opt for pyramidical or hierarchical government but we should share responsibility, and even sovereignty. That is why I am not in favour of a Europe of the regions. I say that we need a Europe with regions, with local communities, with states and with union here in the Council of Europe with our community of 800 million people.

That is the right way to give content to the idea of shared responsibility. However, we also need to ask why. When I look around me – I think that this is the case for all member countries – I think the reason we have to give a real place to regional decision making is that the regions are often the first to be confronted with the problems of migration and unemployment and other economic problems. We have to face those problems at the right level – not by confrontation with other decision-making levels but in co-operation with them. Of course, there are nations without states and manifold diversity, but we can agree completely with what is in the draft resolution and the report and recommendation.

In conclusion, regionalism and regionalisation matters are not part of the problem; they are part of the solution.

THE PRESIDENT. – Thank you. I call Mrs Hadžiahmetović.

Mrs HADŽIAHMETOVIĆ (Bosnia and Herzegovina). – I want to express my pleasure at being able to discuss this subject. The document illustrates the important aspects of regionalisation in Europe and it is an inspiration for many people who deal with regional organisation and development. In that sense, we should praise the committee and the rapporteur, Mr de Puig, who have enabled us to draw attention to the importance of regionalism in new developments and circumstances. However, I ask the rapporteur to explain the final correction in relation to the situation in Bosnia and Herzegovina.

In particular, I want to draw attention to the fact that regions are key subjects in democratisation and human rights processes. They are also key subjects of economic relations and economic developments. In that sense, it is important to emphasise that a regional approach to development is a way of achieving the effects brought about by development. The globalisation process gives special significance to the new nature of regional systems. That process, through various forms of regionalisation, recognises identity and compensates for the effect of a region’s size, as well as allowing integration when regions take a new form and have a different role, which is of particular interest to Europe.

We are aware that there are different approaches to defining regions. Those depend on the nature of the model involved. The document demonstrates the different approaches and experiences of European countries in that process. However, I remind the Assembly of one of the most important European policies – cohesion and redistribution, which represents the synthesis of two groups of values, solidarity and cohesion. The key to realising those goals is to profile regions by paying special attention to their economy, geography, history, urban environment, communication systems, culture and other factors. In that context, regions appear as complete economic territories and include areas that have an interest in jointly directing their development from the perspective of sharing common problems. In that regard, regions form a dynamic category, and two significant elements contribute to that: that they follow the market logic and that they gain the characteristics of social subjects in the process of development.

Existing regional physiognomy in Europe, depending on the initial identification factor, indicates the existence of natural geographical regions, socio-political regions or economic regions. Each of those has its own sense and significance. However, there are clear distinctions in the approaches taken and the foundations on which regionalisation is based. If we take regionalisation to be a way of achieving development, there must be a new regional physiognomy of Europe and respect for universal principles and criteria of regionalisation. In support of those ideas, I bring to the Assembly’s attention some of the economic aspects concerning regionalisation: specialisation of regions in order to increase economic effects; complex developments that determine each region’s physiognomy; economic relations among regions which are aimed at producing harmonic and balanced development; a region as an area that can make the best use of development resources; and a region as an area that makes the optimum combination of development factors.

A new regional physiognomy of Europe based on those regionalisation principles could respond to the requirements of both internal development and global change dynamics. In that sense, the Council of Europe and its debate on this subject have a special role to play.

THE PRESIDENT. – Thank you. I call Mrs Durrieu.

Mrs DURRIEU (France) said that she did not agree with Mr de Puig. Regions should not be the backbone of Europe and she did not agree with the trend towards regionalisation, although some measure of decentralisation was a good idea. There was a variety of different regions and there was not one single system in Europe. In France, another level of regional administration had recently been created. Some regions were entities with strong cultural and ethnic identities, for example, Catalonia. Others, such as Midi-Pyrenées, were artificially created. Midi-Pyrenées had been created as a counterpoint to Paris and was the size of Belgium, yet it had no soul and had never really taken off.

Not all sub–state entities could become states and not all wanted to. Others, such as Montenegro had been successful, and this was legitimate. The example of Catalonia was particularly interesting and one had to ask what the people wanted from the creation of a state. It might be economic clout or autonomy or sovereignty. It was not possible for all regions to establish direct contact with the European Union.

As a former history teacher, she knew that a state was the legal entity that a people conferred upon itself. Some said that the state was declining or even that it was obsolete. She did not agree and thought that the state was still vigorous, not only in France but in a federal country like Spain. There were increasing supranational alliances in a globalised world, such as the European Union and NATO. She was a committed European and wanted a European state and European citizens irrespective of the form of nation states within that. The state was the organ which redistributed wealth among the people and promoted cohesion and solidarity. She had some problems with the report and called upon the spirits of Schuman, Adenauer, Mitterand and Kohl to awaken.

THE PRESIDENT. – Thank you. I call Mrs Jazłowiecka.

Mrs JAZŁOWIECKA (Poland). – The subject of the debate is crucial for the future of our continent. Regionalisation is not an unequivocal notion and we can distinguish certain different trends depending on the given context. I shall concentrate on two of them, which in my opinion are the most important.

The first trend is regionalisation as the self-organisation of society and the decentralisation of authority. That is a very positive phenomenon because it leads to the growth of the effective functioning of public administration and fosters civil society. More and more countries in Europe appreciate the significance of this phenomenon and hand over more and more competences to levels that are closer to the citizens.

The subsidiarity principle, which is the characteristic feature of regionalisation, is the basis for the functioning of the European Union, to which many Council of Europe countries belong. The principle forces states to reorganise their administrative structure to bring them closer to the citizens. Self-government must be transparent and comprehensible for ordinary citizens, with the aim of showing them that the state functions efficiently and is cost-effective.

The second type of regionalisation concerns national and ethnic minorities, which provide both an opportunity as well as a threat to European stability. Many ethnic groups do not have their own state or broad autonomy. If they try to gain autonomy peacefully there is no danger of an outbreak of conflict or destabilisation. A good example mentioned in the report is Montenegro or, even earlier, the partition of Czechoslovakia. A problem arises when such aspirations meet strong opposition, especially when that opposition is based on strong arguments.

We have dealt several times in our Assembly with the problem of Kosovo, which is the best example of the ambiguous nature of the problem. Whatever decision is made on Kosovo, it appears that it will hurt one side in the conflict and will not contribute to the stabilisation of the region. The examples that I have just mentioned show that meeting the state-building aspirations of national or ethnic groups can contribute just as much to regional stabilisation and the disappearance of trouble spots as to the aggravation of animosities and conflicts between neighbours. The effect of all those factors make it hard to elaborate transparent principles of conduct.

In that context, it is worth deliberating on the process taking place in the framework of the European Union. Opinions suggesting that federal states need not exist because their significance in the EU is fading away are heard more and more frequently. Different ethnic groups have begun to speak more bravely about independence or the partition of the state. Belgium, where votes for the partition of the state are very popular, is a good example. It is a state which, not very long ago, provided an example of the successful co-existence of different ethnic groups.

The examples I have mentioned show that it is highly probable in the near future that people will identify themselves as Europeans and members of local communities, disregarding their state identity. I do not want to judge that process, but it is worth noting and considering its impact on the future of our continent. Thank you for your attention, and thank you, Mr de Puig, for the great job you did in the report.

THE PRESIDENT. – Thank you. I call Mr Sudarenkov.

Mr SUDARENKOV (Russian Federation) said that he had known Mr de Puig for many years and recognised him as a multi-faceted politician and a committed regionalist. He supported regional democracy and held very similar views to the rapporteur. Russia had taken an interesting path towards federalism. It was a large country, with many time zones, peoples and languages. It was difficult to organise such a complex state. In 1993, the new Russian constitution had created a federal state. This was an asymmetrical form of federalism, with different levels of sub-states although all had economic and financial powers. There were 89 “subjects of federation” although some were now being merged and this was to be welcomed. Amongst them were republics with full constitutions and others with charters. All had legislative power, their own symbols and parliaments. Their populations ranged from thousands to millions. Some were named after peoples, for example, Tatarstan or Dagastan. Others were named after places. There was now a whole textbook on the constitutional law of subjects of federation.

When the USSR had broken up, there had been a possibility that Russia might also disintegrate. That crisis had been overcome, although some problems remained in the North Caucasus. It was important to note that living in a federal state was not worse than living in isolation. The Council of Europe had not always taken into account the autonomy of the North Caucasus. Delegated authorities could also be effective in supporting human rights. The report stated that regions bound people together. He agreed with this and endorsed the draft resolution with amendments.

THE PRESIDENT. – Thank you. I call Mr Ékes.

Mr ÉKES (Hungary) congratulated Mr de Puig and said that he was delighted by the debate. There had been a recent conference of national regional parliaments on regionalism in Europe. Regionalism was an important movement in Europe. Autonomous regions were emerging with strong traditions and cultures, but regions varied widely. Some had legislative capacity, others had very limited powers. Some had emerged from national minorities. Some regions enjoyed powers and prerogatives without ever formally being called regions.

THE PRESIDENT. – Thank you. I call Mr Mota Amaral.

Mr MOTA AMARAL (Portugal) said that regionalisation added quality to democracy by enabling decisions to be taken closer to the citizens. This promoted better and more efficient governments, but it was important that regionalisation was introduced as a bottom-up concept and not enforced from on high.

Portugal had two autonomous regions in the form of Madeira and the Azores, which operated as credible partners with the state level of governance. The Council of Europe had been instrumental, particularly within its Congress of Local and Regional Authorities of the Council of Europe, in enabling such regionalisation.

It was vital that regions had real representatives democratically elected into the Chamber of Regions of the Congress and that the chamber was equipped with a strong mandate. It was suggested that a reference framework for regionalisation should be adopted which states could opt into.

THE PRESIDENT. – Thank you. I apologise for missing out Mr Dorić from the list. I call Mr Dorić.

Mr DORIĆ (Croatia). – Regions were rediscovered in Europe after the Second World War. In the divided Europe of the 1940s, it was not the national authorities which came together first to solve the problems of Europe – it was the regions on the French-German border, the Swiss-German border and the Dutch-German border. Their main aims were to raise the standard of living; to contribute to lasting peace and to overcome border restrictions, and they succeeded in fulfilling those aims.

Fifty years later, the same was seen in south-east Europe after the conflicts in the 1990s, and that showed the strength, capacity and importance of local and regional self-government. After the fall of the Berlin Wall, the decentralisation of previously centralised states contributed more to the democratic process in central and eastern Europe than any other event – I am deeply convinced of that.

Such great achievements of regionalisation and decentralisation brought the decision-making process closer to the citizens and did not, as one colleague has asserted, take it further away from them. That process enabled the direct election of representatives in regional assemblies and satisfied the cultural, historical, traditional and political demands and special needs of those regions.

I support the report and hope that the Committee of Ministers will finally adopt the Draft European Charter on Regional Democracy, which will be on its agenda next year. A second document on good governance will be presented next week at the conference of ministers who are responsible for local and regional government, in Valencia. While the European Charter of Local Self-Government presses national governments to decentralise and implement the principle of subsidiarity, the Valencia document will press local and regional self-government to do more to improve.

Once again, I thank Mr de Puig. I hope that those Council of Europe projects will be successful new steps in the field of democracy, human rights and the rule of law.

THE PRESIDENT. – Thank you. I call Mr Simms.

Mr SIMMS (Observer from Canada). – I appreciate being given the time to make this speech. It is an honour to be here, although I am from an observer nation.

I congratulate the rapporteur on his report, which I read with great interest. He has obviously spent a great deal of time on it, and it goes into great detail.

I am from the second largest country in the world. Since 1867, we have gone through many trials and tribulations about how to deal with confederations. Today, I want to provide an example from my home country, which is based more on socio-economic factors than anything else. We have sub-states in Canada, which are called provinces. One province is called Alberta. It has many hydro-carbon resources – oil and gas. The harvesting of those resources and the collection of royalties has recently been extremely successful. Economic development has occurred to the point at which not only has the province reduced its deficit to zero, but it has absolutely eliminated its debt, which is an amazing example of how a province has used its own resources for its own people to allow its society to progress.

I also want to give you the flipside of that situation. I am from a small island on the east coast of Canada called Newfoundland and Labrador. We, too, have a vast amount of oil and gas, and we have five major developments, which are bringing in incredible amounts of profit. The problem is that Newfoundland and Labrador has no jurisdiction over what it obtains in benefits, because the oil is not extracted from the land – it is extracted offshore. The oil is owned, harvested, controlled and determined by the Federal Government in Ottawa. The problem is that although Newfoundland and Labrador has those resources, we have high unemployment and one of the highest rates of emigration the country has ever seen. That is where regionalism goes wrong.

Recently, the Government of Canada set up a board, whereby both Newfoundland and Labrador and the Federal Government would manage the resources. Since then, we have managed to reverse the trends on emigration and on unemployment. Now we are part of the game, we are involved in not only the development of resources, but the development of our young people through skills training. As my colleague from Finland, Mr Kallio, has said, it is important that local governance is involved with human capital. The people have been empowered to take over a resource that is so valuable to us, because it allows us to supply our young – it gives our young people the option to stay. To me, that is the ultimate example of regionalism.

In the past, we have seen across Canada a move to regionalism by empowering the base degrees. I congratulate the rapporteur on the report, because it discusses that sense of empowerment. The problem is that if you focus too much on the symbols and the layers of bureaucracy that merely symbolise regionalism, you lose the concept altogether. In Newfoundland and Labrador, and in the rest of Canada, we believe in empowering the people at the base degrees to make decisions about the future. Your symbols will mean nothing if you do not grasp the concept of empowering the base degrees in an economic sense. That is a small message about the economy, and I humbly present it to you today.

THE PRESIDENT. – Thank you. I call Mr Pozzo di Borgo.

Mr POZZO DI BORGO (France) reminded the Assembly that, prior to the French Revolution and the successes of Mirabeau, France had been a country of disunited people with different interests and even different currencies living in the same area. The French Republic and its natural son, Napoleon, had brought legal and commercial unity to the situation, thus bringing France into the modern era. This event had guaranteed the future enjoyment of universal rights for all. Later devolution of powers to regions had been brought into force by Gaston Defferre, the Mayor of Marseille.

Although he himself was in favour of regionalisation, he expressed reservation at the transfer of power to entities on the basis of cultural groupings, such as might be experienced with Corsica. This would raise difficulties with regard to the identification of the authority which would define a cultural grouping. He considered that, first and foremost, citizens should be considered as European citizens and their rights protected as set out within the European Convention on Human Rights.

THE PRESIDENT. – The Assembly can see that we are now past the time that I allowed so as to protect the other debate. I must now interrupt the list of speakers and apologise to those who have not been called. The speeches of members on the speakers list who have been present during the debate but have not been able to speak may be given to the Table Office for publication in the official report.

I call Mr de Puig, rapporteur, to reply. You have four minutes.

Mr DE PUIG (Spain) thanked all the speakers who had supported him and his report. He wished to respond to their enriching comments, but considered some of the negative comments unjustified, and noted the absence from the Chamber of two of the critics. He questioned the comments regarding the imposition of regionalisation on states. He was against regional and national bureaucracy and considered that some speakers had misread his report. He did not wish to promote a new policy as regionalisation already existed and could be seen in the United Kingdom, Germany, Switzerland and many other countries. The worth of such regions had already been proven, and he failed to understand why some speakers had such strong objections to the concept of regionalisation.

Regionalisation was needed to complement state governance rather than to undermine it. He noted the suggested technical corrections to the explanatory memoranda and confirmed to the Assembly that these would be made.

THE PRESIDENT. – Thank you, Mr de Puig. I thoroughly agree with you that if colleagues are critical of a report, it would be useful if they remained to listen to the debate. That is a parliamentary obligation on those who participate in debates. Does the chairperson of the committee, Mr Schmied, wish to speak? You have two minutes.

Mr SCHMIED (Switzerland) said that the committee had unanimously adopted the report. He thanked the rapporteur and all those who had spoken in the debate, and said that regionalisation should be seen as an opportunity for people to better themselves. It should not be enforced where it was unwanted or unnecessary. Those who had criticised the report had a duty to read it. It was an important issue. He noted that only two amendments had been tabled. He believed that this showed how relevant and accurate the report was, and he invited the Assembly to put its trust in the people. He said democracy was a partnership between people and the state. Regionalisation brought the people back into this partnership. He asked the chamber to vote for the report.

THE PRESIDENT. – The debate is closed.

The Committee on Environment, Agriculture and Local and Regional Affairs has presented a draft recommendation to which two amendments have been tabled.

They will be taken in the following order: 2 and 1.

I remind you that speeches on amendments are limited to one minute.

We come to Amendment No. 2, tabled by Mr Miloš Aligrudić, Ms Donka Banović, Mr Željko Ivanji, Mr Tomislav Nikolić, Mr Dario Rivolta, Mr Walter Schmied, Mr Christopher Chope, Mr Jean-Charles Gardetto and Mr Dragan Šoć, which is, in the draft recommendation, paragraph 13, after the words “accepted by”, insert the following words: “a part of”.

I call Ms Banović to support Amendment No. 2.

Ms BANOVIĆ (Serbia). – I am Mr Aligrudić’s substitute. The amendment deals with paragraph 13 and Mr de Puig has agreed to it. The change is important to the Serbian delegation. “A part of the international community” would appear after the words, “accepted by”.

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

What is the opinion of the committee?

Mr SCHMIED (Switzerland). – In favour.

THE PRESIDENT. – The vote is open.

Amendment No. 2 is adopted.

We come to Amendment No. 1, tabled by Mr John Dupraz, Mr João Bosco Mota Amaral, Mr Paul Flynn, Mrs Eva García Pastor, Mr Wolfgang Wodarg, Mr Miljenko Dorić, Mr Walter Schmied and Mr Alan Meale, which is, in the draft recommendation, at the end of paragraph 23, add the following words:

“and, in due course, that of the Committee of Ministers, with a view to a legal instrument being drawn up offering an institutional framework in line with the developments in most European countries”.

I call Mr Dupraz to support Amendment No. 1.

Mr DUPRAZ (Switzerland) said that the amendment would add a legal framework to the report and ensure that the legal support of the Committee of Ministers was given to the resolution.

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

What is the opinion of the committee?

Mr SCHMIED (Switzerland). – In favour.

THE PRESIDENT. – The vote is open.

Amendment No. 1 is adopted.

We will now proceed to vote on the whole of the draft recommendation contained in Document 11373, as amended. A two-thirds majority is required.

The vote is open.

The draft recommendation in Document 11373, as amended, is adopted, with 68 votes for, 2 against and 4 abstentions.

4. Organisation of debates

THE PRESIDENT. – Tomorrow morning for the debates on defamation and the concept of preventive war, only one amendment has been tabled. Accordingly, I propose that we should allow five minutes’ speaking time in those debates.

Are these arrangements agreed to?

They are agreed to.

5. The OECD and the world economy 2007 (enlarged debate)

THE PRESIDENT. – The next item of business at this afternoon’s sitting is the enlarged debate on the OECD and world economy. I welcome our friends and visitors from the OECD who are here today.

We begin with a presentation by Mrs Papadopoulos, on behalf of Committee on Economic Affairs and Development, of its report on the OECD and the world economy, Document 11357.

We shall then hear contributions from the committees, which will be followed by a statement by Mr Angel Gurría, Secretary-General of the OECD. In the general debate, we welcome the participation of delegations from parliaments of non-European members states of the OECD, including Canada, Japan and Mexico. The list of speakers, which has been distributed, closed at 7 p.m. yesterday.

The rapporteur has eight minutes, committee contributors have three minutes, and participants in the general debate have four minutes.

I remind you that we have already agreed that we shall interrupt the list of speakers at about 5.40 p.m. to allow time for the reply and the vote.

I now call on Mrs Papadopoulos to present the report of the Committee on Economic Affairs and Development. You have eight minutes.

Mrs PAPADOPOULOS (Cyprus). – I welcome the Secretary-General of the OECD, Mr Gurría, and thank all foreign delegates from Canada, Japan and Mexico for being with us again in this enlarged Parliamentary Assembly to examine the recent activities of the OECD as they relate to the world economy. I express many thanks and much gratitude to the OECD specialists and experts for their valuable contribution, as well as to the experienced Secretariat of the Committee on Economic Affairs and Development for its support in drafting this report.

On behalf of the Committee on Economic Affairs and Development, I congratulate the OECD on inviting Chile, Estonia, Israel, Russia and Slovenia to open discussions for membership and on engaging on discussions about future membership with Brazil, China, India, Indonesia and South Africa, and I express our certainty that the OECD’s new role as a sound policy adviser and a platform of dialogue between the G8 and Brazil, China, India, Mexico and South Africa will prove a success for the world economy.

Dear colleagues, the report gives a broad overview of the world economy as analysed by OECD experts and discussed by the enlarged Economic Affairs Committee. It outlines strengths, weaknesses, opportunities and threats. It describes in brief several OECD projects and initiatives – against corruption and bribery and on the promotion of good governance and multi-country benchmarking for performance against structural and policy indicators.

Before the recent turmoil in financial markets, the OECD’s central forecast, published in May 2007, showed that the world economy was undergoing a smooth rebalancing. There was a soft landing in the United States, sustained recovery in Europe, a solid trajectory in Japan and buoyant activity in China and India. Sustained growth in OECD economies was underpinned by strong job creation and falling unemployment. Strong growth for the whole OECD was expected to continue throughout 2007 and 2008. World trade was also expected to maintain momentum.

Recent realisation of some of the risks highlighted in the OECD assessment, notably the weakness of the United States housing market and problems in the sub-prime mortgage markets, necessitated reassessment of the outlook . The OECD’s interim economic assessment of September 2007 noted that “prospects were less buoyant and more uncertain and that downside risks were evident”.

Although the consequences of the recent turmoil in financial markets are unclear at present, they suggest that risks to growth are biased on the downside, especially should turbulence in financial markets continue or deepen. That is a serious concern for the whole globalised world and for Europe. In addition, some longstanding global imbalances remain a risk. They are mainly the current budget and trade deficit in the United States; a surplus in the balance of payments in China and Japan; housing market imbalances; a possible protraction of the downturn in the United States and large public deficits and protectionism.

There are, moreover, other challenges to be taken into consideration. They include, first, household indebtedness and unanticipated increases in prices; secondly, energy security and prices; and, thirdly, connected to the energy problem, environmental pollution, climate change and global warming. The dilemma raised by the OECD is our obligation to choose between “A future underinvested, vulnerable and dirty, or one that is clean, clever and competitive”.

The fourth challenge is free trade and free finance. Despite strong performance, markets are vulnerable to geopolitical and energy concerns. Fifthly, economic imbalances persist between developed and developing countries and urban and rural areas, and there are generation splits between young and old.

To bridge all the gaps and to meet the challenges I have mentioned, we need collaborative effort and we certainly need different solutions, which may be reforms, restructured policies, the introduction of new information technologies in education systems, viable rural infrastructures and better use of development aid to ensure the spread of the benefits of globalisation in all parts of the world.

Actions are needed. A trade deal during the current World Trade Organization negotiating round will certainly benefit the world, whereas failure will jeopardise the progress that has been made and waste opportunities to rebalance the multilateral trading system. Political will and parliamentary pressure are needed for compromises. The US Congress must facilitate the negotiation process.

Wide trade deficits necessitate corrections, especially in the United States. The decline of net official development assistance and delay in meeting G8 and Millennium Plus 5 Summit commitments in 2007 and 2008 necessitate the effective use of funding, planned and manageable increases in other forms of aid and the political will to honour funding commitments.

Combating corruption is vital because corruption is already a severe contemporary threat to good governance, sustainable development and fair democratic activity. We congratulate the OECD on becoming a leading institutional campaigner against international corruption, working closely with the Council of Europe in the framework of the Greco – Group of States against Corruption – initiative.

We stress the necessity of enforcing OECD anti-corruption strategies worldwide, extending co-operation among European states in addressing the problem of counterfeiting and piracy and encouraging governments to proceed with innovative policy-making both for OECD and non-OECD economies and draw up innovative and efficient strategies for action so as to achieve competitiveness, national economic progress and cohesion.

We call on the OECD to intensify its work on reforming the political economy and in supporting governments in their reform efforts. Moreover, we welcome all OECD’s renewed priorities for work on migration, water and health. In addressing the rapid changes and speed of economic globalisation, we must bear in mind the fact that we should always target policies and measures that maintain balance between economic growth, social cohesion and human rights protection for the work force, because, at the end of the day, our mission as parliamentarians is to have not only a strong worldwide economy in numbers, but to make globalisation a real challenge and an opportunity for all – for all countries and people, for men and women worldwide.

I congratulate the OECD on its enlargement, hoping that my country, Cyprus, which will join the eurozone in January, will have the opportunity to participate in comparative educational projects such as PISA – the Programme of International Student Assessment – a move on which, unfortunately, Turkey currently imposes a veto.

THE PRESIDENT. – Thank you. I call Mrs Roseira to present the contribution of the Social, Health and Family Affairs Committee. You have three minutes.

Mrs ROSEIRA (Portugal) said that she did not have time to comment on the social or health implications of the report. Therefore, she would direct her remarks to the globalisation paradox. Globalisation had caused investment within the European Union and had driven down the price of goods. It had increased opportunities in the labour market. However, public perception of globalisation was negative. The process of globalisation moved quickly and it was difficult for the average person to evaluate its impact. It was important to reconcile the need to provide social protection for workers with the need to have a dynamic labour market. It was the responsibility of parliamentarians to fight for a fairer world.

THE PRESIDENT. – Thank you. I call Mr Keskin to present the contribution of the Committee on Migration, Refugees and Population. You have three minutes.

Mr KESKIN (Germany) said that international migration was the most important challenge of this century. Over 200 million people were, or had been, migrants, and this number was rising. Migration was caused by a number of factors, including climate change and war. A significant number of migrants and asylum seekers who were searching for a better life lost their lives in the process. Recently, 8 800 people had died trying to get into the European Union. Those figures were provided by United Against Racism.

Globalisation did not respect individual dignity or human rights and there was no social cushioning. In 2006, the Council of Europe had debated the rights of clandestine migrants and concluded that a series of urgent measures was necessary. Countries needed to sign and ratify the United Nations Convention on the Rights of Migrants and their Families as soon as possible. He welcomed the fact that this topic was being debated by the Organization for Economic Co-operation and Development. There were more than 15 million migrants in Europe who had the status of foreigners, but who made a major contribution to the countries in which they lived despite having no social or political rights. Dual nationality encouraged integration and the equal treatment of migrants. Migration needed to be factored into the debate on globalisation, and human rights needed to be the focus.

THE PRESIDENT. – Thank you. I call Baroness Hooper to present the contribution of the Committee on Culture, Science and Education. You have three minutes.

Baroness HOOPER (United Kingdom). – As the report and debate on the OECD is an annual event, it enables us not only to look forward but to review what has been done to act on resolutions agreed in the last and in previous reports. As the presenter of the contribution from the Committee on Culture, Science and Education, I am therefore pleased to acknowledge the progress that has been made, which was recorded in the document published last month, on 20 September, as the OECD’s response to last year’s report. In particular, I welcome the OECD’s global project on measuring the progress of societies which was launched at the Istanbul Conference in June. As it affects education in particular, I also welcome PISA, which is an internationally standardised assessment. It was jointly developed by participating countries, and I understand that almost 60 are involved in it. That of course includes many non-OECD Council of Europe members. The rapporteur referred to that. I understand that the survey results will be published in December, and we look forward to that.

I congratulate Mrs Papadopoulos on an excellent report and on the way in which she focused on globalisation. In that context, the proposed further enlargement of the OECD is to be supported. I look forward to hearing from some of those proposed new members, just as we look forward to hearing from our Japanese, Canadian and Mexican contributors today. That will add further to the significance and impact of the OECD’s work.

Given the vital role of education and training for the world economy, the Committee on Culture, Science and Education deemed it important not only to draw attention to the need for improved standards in education from primary school to lifelong learning, but to underline the value of the quality of education. Our suggestions were accepted by the rapporteur and are reflected in paragraphs 16 and 17 of the draft resolution, which I trust the Assembly will accept.

Mrs Papadopoulos’s report also raises the issues of intellectual property rights, biotechnology and skills. Each of those skills is the subject of separate reports that are being prepared by my committee. It will certainly be interesting to involve the OECD in discussions on them at a later stage. I also want to mention e-learning. My committee held a teleconference on that on Monday and it included contributions from the United Nations university in Tokyo and a number of countries. The report, which will be published in due course, will be of considerable interest and will have a global impact.

I look forward to the debate and in particular to the statement by Mr Gurria.

THE PRESIDENT. – Thank you. I call Mrs García Pastor to present the contribution of the Committee on the Environment, Agriculture and Local and Regional Affairs. You have three minutes.

Mrs GARCÍA PASTOR (Andorra) congratulated Mrs Papadopoulos on her report and said that her committee supported it. The most important factor was that of the environment and energy. The greatest challenge was what some called climate change, or what those with a wider vision termed anthropogenic action on the environment. The future of energy sources was vital. Europe was extremely vulnerable and needed to reduce its dependence on fossil fuels and develop alternative technologies such as solar power and geo-thermal energy. These had to be used in industry, and environmental costs needed to be factored into energy bills.

Countries such as Brazil, India and China were developing rapidly, and their impact on the environment needed to be limited. This was why she had tabled an amendment and she was grateful for the committee’s support. The amendment aimed to help countries develop in the most appropriate way in environmental terms and to avoid uncontrolled pollution.

Since the Industrial Revolution, developed countries had evolved better technologies, and their experience had helped them to rethink their impact on the environment. The Organization for Economic Co-operation and Development had to help countries avoid repeating these errors. Biofuels were of particular importance although they had an influence on the environment and on crops, which could lead to hunger and increased demand on water resources. It was necessary to educate people about the environment so that everyone could shoulder their responsibility. Politicians needed to develop global policies and allocate resources appropriately.

(Mr van der Linden, President of the Assembly took the Chair in place of Mr Prescott)

THE PRESIDENT. – We come now to the statement by Mr Angel Gurría. Mr Secretary-General, on behalf of the Parliamentary Assembly, may I say what a great honour and pleasure it is to welcome you back to the Enlarged Assembly for this important debate? Your first year in office has given us ample evidence of your dynamic and innovative leadership. You have taken the organisation forward into new territory, as demonstrated by the OECD Council’s landmark decision last May to invite Chile, Estonia, Israel, Russia and Slovenia to open discussions for membership of the organisation, and to offer a closer relationship, leading to possible membership in the future, to Brazil, China, India, Indonesia and South Africa.

These prospects for OECD enlargement take account of global economic realities and can only strengthen the organisation’s capacity to offer all its member states sound policy advice.

I would also like to welcome among us the new Deputy Secretary-General of OECD responsible for the political economy of reform and for relations with parliaments, my friend, Mr Aart de Geus, a former Minister of Social Affairs and Employment in the Netherlands. Congratulations and good luck with your new job!

Our Assembly has always appreciated the opportunity offered by the holding of this annual debate to gain a better understanding of the economic forces shaping our greater European region. The context is increasingly one of globalisation, as we saw this morning in a fascinating debate on its implications for growth, social policies and employment, drawing not least on the findings of the OECD. This closer economic integration of the world is one reason why we value so highly the presence here today of parliamentary delegations from such distant countries as Canada, Japan, and Mexico. I thank them for making the effort to travel long distances to take part in this debate. I hope also that we can continue this close co-operation and relationship. Yesterday, I met one of the delegations.

Mr Secretary-General, I invite you to take the floor.

Mr GURRÍA (Secretary-General of the Organisation for Economic Co-operation and Development). – I listened to the debate with great interest.

(The speaker continued in French)

Mr President, ladies and gentleman, it is an honour for me to address this Parliamentary Assembly. First of all, I should like to congratulate Mrs Papadopoulos on her report, “The OECD and the world economy in 2007”. It is a far-reaching report, covering a broad range of themes. In my comments today, I shall mention only a few of them, specifically economic prospects and the contribution which the OECD can make to improving the functioning of the world economy. Mrs Papadopoulos, if you will allow me, I will use your report to explain a little more about what the OECD does. Since you have done such an excellent piece of work, I shall cut my comments short so we can concentrate on other things.

(The speaker continued in English)

As you know, the economic prospects for the world have become a little more complicated. A year ago, when we were here, and it looked good: one more year of economic growth at a good speed. It looked like 2007 was going to be good, and 2008 looked good, too. Now there is more uncertainty. In the sub-prime market, it is no longer a problem about mortgages – it is a question of confidence in the financial system, where everyone is running for cover. Everyone becomes suspect, as a good observer told me. Consequently, people will hold on to credit until the air clears. Everyone is ceasing to lend to everyone else, so what started as a problem of too many savings chasing too few mortgages and too few projects has become a great problem of confidence in the financial system. It will take a while.

It will add to the clear signals of deceleration in the world economy. We were at the tail end of an expansion cycle, then this thing happened. It will add to the deceleration. Yes, we have to keep an eye on monetary policy, but central banks cannot do everything. Regulatory issues have come up: who controls what? Half the mortgages that created the problem did not originate with banks covered by the Federal Reserve Bank in the United States.

Moving on to another part of the world, the OECD has just published its first-ever economic survey of the common policies of the European Union. It includes recommendations to help EU countries pursue sustainable growth in this evolving economic environment, characterised today by sustained high oil prices and record highs of the euro currency. That poses a particular question of competitiveness. Overall, we made five policy recommendations. First, the EU should strengthen the internal market. Clearly that offers a big reward, and that is what we should move towards – it is the El Dorado. The main weak spot is the services sector, which needs to continue its reforms in Europe. Secondly, network industries such as electricity and gas should be open to more competition. Thirdly, the EU should continue the progress made in reforming the common agricultural policy. Severing the link between farm production and subsidies, as well as better targeting of farm support to benefit lower-income farm households and the poorer farming regions would make the CAP even more effective.

Fourthly, barriers to the free movement of people should be lowered, since a mobile work force can strengthen the union by acting as a shock absorber for economies that are out of sync with their neighbours, as well as economies that are suffering the effect of ageing or a drop in absolute terms in the population. Fifthly, the European Union could achieve better value for spending in the area of regional policies. You were discussing regional policies only a few minutes ago. All those reforms would help improve economic performance and stimulate innovation, which is a key priority for your governments. Mr Barroso sent out a press release only yesterday in which he expressed his appreciation for our work, and agreed with our main conclusions.

Let me take a look at the broader world economy – not just the European Union – and what we can contribute to it. I am pleased to report that, since I addressed this group last year, a number of landmark developments have occurred within the OECD. First, our member governments made an unprecedented decision, which has been alluded to, to begin accession discussions with five countries: Chile, Estonia, Israel, the Russian Federation and Slovenia. I hope that by 15 October next the council of the OECD will approve the so-called road map, which contains the terms and conditions for accession for those countries so that we can get the process going. It will be the start of the process, not the end. I am happy to say that our member governments decided “to strengthen co-operation with Brazil, China, India, Indonesia and South Africa…with a view to possible membership.” If we get those countries in, we will again have 75% to 80% of the world’s economy within the OECD.

We do not want to be universal; we want to be global and more relevant.

Opening-up is an historic goal to our changing world. The goal is improved national and international policies, and fewer tensions and closer co-operation for a more vibrant and equitable global economy. Those goals are within reach, and the OECD, by becoming the hub of globalisation, which it was mandated to do by our council, can play a critical role in achieving them.

I have heard that Baroness Hooper has been considering education. We have just put out “Education at a Glance”.

Mr Keskin has said that education is important, which is true. This is our latest work on migration, “International Migration Outlook”.

Mrs Eva García Pastor has said that it is very important to work on the environment. We will put out our report on the environmental outlook in March 2008 in Oslo, where the Prime Minister of Norway will be the host. The review of the environmental policies of China, which is a global public good, was delivered to the Chinese Government with their co-operation.

Last but not least, I want to give Mrs Maria de Belém Roseira “Economic Policy Reforms: Going for Growth”, which discusses some very interesting development-related issues and flex security. Flex security is a very interesting concept, and we should pay the Danes and the Nordics a fee for using it. However, I do not think it easy to charge 63% taxes in order to replicate the situation of the Danish, so I suppose that we should use it with care.

In 2007, we saw the strengthening of the links between the OECD and the G8. I was invited to attend the summit for the first time, where the OECD obtained important mandates, including one to provide a platform for dialogue between the G8, which includes the most industrialised countries in the world and Russia, and the outreach five – the so-called O5 – Brazil, China, India, Mexico and South Africa. Such developments are consistent with our mandate of getting closer to such countries with a view to membership.

Today, everyone agrees that the impact of innovation is critically important. We got a mandate from our latest ministerial meeting in order to work on innovation for the next two or three years and, with our collective experience, to find out what works and what does not, and to share our findings with everybody. Hopefully, we will report to you next year on our progress.

While countries such as India and China are adding pressure to the world’s competitive situation, the question of innovation becomes critical. On the day before yesterday, we met Secretary Rice and Secretary-General Ban Ki-moon in New York to launch the Partnership for Democratic Governance. It is about providing services to the weakest countries in the world to support their democratic processes. We are working with the poorest countries in the world through the development assistance committee and the development centre.

(The speaker continued in French)

However, it was not acceptable to simply list the reforms required. There were many obstacles to innovation and economic reform. It was important to mobilise support within the international community for reform and learn not only from the successes but the failures experienced in countries and to implement lessons learned. The OECD was committed to going above and beyond its duties to assist the Council of Europe and others in the international community in order to bring about the changes required.

To symbolise developments within the OECD and the sharing of information with the Council of Europe, the Secretary–General presented the President with the annual report of the OECD and its latest report on the Turkish economy.

THE PRESIDENT thanked the Secretary–General for his contribution and his kind gifts. He agreed that closer co–operation between the OECD and the Council of Europe, particularly its Parliamentary Assembly, should be promoted. The Council of Europe needed to contribute more to the reporting undertaken by the OECD and there would be benefit in the OECD having further regard for the core business of the Council of Europe.

THE PRESIDENT (Summary)

We now come to the list of speakers: in the general debate I call first Mr Greenway on behalf of the European Democrat Group.

(Mr Schmied, Vice-President of the Assembly, took the Chair in place Mr van der Linden)

Mr GREENWAY (United Kingdom). – I begin by agreeing with you, Mr President, that this is one of the most important debates that we hold in this Assembly, not least because economic development and performance, particularly in poorer, less-developed countries, is critical to the overall aims of the Council of Europe, which are improving human rights, the human condition and democratic stability.

I thought that the Secretary-General’s speech was absolutely first class – I agreed with absolutely everything that you said, and we enjoyed the fact that you brought us some presents. On behalf of the Committee on Migration, Refugees and Population, I want to tell you that my colleague Mr Keskin and the rest of the committee will carefully study what you have said about migration.

We must take account of unexpected developments that may have unexpected impacts on economic performance and the lots of our people. In this regard, I agree with the Secretary-General that the crisis in the banking, credit and sub-prime mortgage market is a matter of real concern. On balance, I agree with the Secretary-General’s analysis that much of what is likely to happen in terms of the shock is over, but the effects on confidence and performance in the financial services sector is a real concern.

In the United Kingdom yesterday, Britain’s biggest mortgage lender, the Halifax, scaled down its predictions for the year ahead, and I believe that similarly worrying signs are occurring in other countries.

As someone who has interests in the insurance industry in the United Kingdom, and as author of the report, “Conflict of interest”, which was introduced at the beginning of this week’s session, I declare that interest purely to say that I agree entirely with the Secretary General’s analysis that regulation of the system requires further attention.

I want to finish my remarks by referring to something that your predecessor, sir, said two years ago. Shortly after the appalling tragedy of Hurricane Katrina in New Orleans and in that part of the United States, he referred to the serious economic damage and loss of economic opportunity that natural disasters cause. I do not believe that governments have yet learned the lesson of that. This year, in Britain and in other member states of this Assembly, there have been the most appalling floods. In Britain alone, the cost of the floods is probably in the order of £5 billion to £6 billion, yet government spends a few hundred million pounds at most on dealing with the problems of adaptation and flood defences – the measures that are needed to counter the effects of the climate change which is already happening. I am all in favour of taking measures that will save the world for future generations, but I think we need to wake up, not just in this Assembly but in parliaments across Europe and the world, to the fact that change is already happening and unless we make progress on how we are going to deal with these changes now, there will be major economic shocks to the system that we can ill afford.

So my message to you, Mr Secretary-General, is this: please use your office to warn governments of this fact to ensure that more is done, that more sensible investment is made, and that we bring to an end the false economy of spending too little on dealing with the problem. The cost in terms of the economy and the damage it does is there for all to see. I wish you luck, sir, with all that you do.

THE PRESIDENT (Translation). – Thank you. I call Mrs Siniscalchi on behalf of the Group of the Unified European Left.

Mrs SINISCALCHI (Italy) thanked the rapporteur for the report, and said that she wanted to draw attention to the economic disparity that was being experienced at both international and national level across the globe. Although wealth was growing, its distribution was unequal and it was accompanied by the flouting of the rights of small producers, workers and women. The OECD needed to take account of this imperfect equity.

The draft resolution drew attention to the cost of maintaining a welfare system, but this should be considered an investment as much as an expense. She also wished to comment upon the inactivity within the current round of World Trade Organization talks. The Doha agenda had been stalled by the protectionism of developed countries, which sought to undermine the same protectionist philosophy in developing countries. Two issues of particular importance were the global fight against corruption and the provision of development aid in the areas of poverty reduction, food security and primary health care provision.

The Assembly was reminded that many people in the world survived on less than US$ two per day and a child died every three seconds because of poverty. Much more needed to be done to distribute wealth fairly and to achieve the Millennium Development Goals.

THE PRESIDENT (Translation). – Thank you. I call Mr Mićunović on behalf of the Socialist Group. He is not here. I call Mr Braun on behalf of the Group of the European People’s Party.

Mr BRAUN (Hungary). – The Assembly has the opportunity to form an opinion or change opinions about the state of the world economy every year. That opportunity is the debate on the annual report of the OECD. Generally, the report gives an account of the common state of the world economy. It examines the performance of the main economic areas separately. The most exciting part of the report is always the additional remarks. In that section, Mrs Papadopoulos – to whom, on behalf of the EPP group, I want to express my gratitude and thanks for her work – has chosen some very interesting topics. From among those topics, I want to make a comment on household indebtedness. The title of the chapter is, “Has household indebtedness reached dangerous proportions?” That interrogative sentence was drawn up in April. Today, we have to change it – we have to put an exclamation mark at the end. Today, the question has been answered.

The crisis of the American sub-prime market has swept beyond the borders of the USA. The low basic interest rate made credit extremely cheap and this encouraged indebtedness for those who have been unable to repay earlier. The increasing borrowing capacity boosted the demand for properties and pushed up prices. A new American speciality took shape – the sub-prime market. Loans were taken out not only by people wishing to buy their own home. Moreover, the continuously rising house prices made further mortgages possible on the same property. When the basic interest rate increased, the burden of the loan payment increased significantly, so some debtors became unable to pay them. Moreover, any escape from the loan became impossible because of falling property prices. At the same time, the falling property prices meant a fall in the collateral value, increased risk and possible failure of banks.

Household indebtedness is not only an American phenomenon. The OECD survey shows that the share of household indebtedness as a proportion of GDP has risen twofold in 20 years. Without doubt, the increase in household indebtedness has had positive effects on the economy because loans mean additional consumption and demand. However, the new loans must be paid off from future income, accompanied by a decrease in consumption in the future. Another negative aspect of indebtedness is a decrease in the net saving capacity of the population. As a result, financing of the budget deficit and of enterprises becomes increasingly difficult.

Many people think that the reason for the increase in indebtedness is advertising that encourages consumption – buy now, pay later; go on holiday on credit; buy a new car with no resources of your own. Consuming is beyond people’s means and they overload their properties and future incomes.

The effects of indebtedness on families are not only economic. People are exposed to indebtedness particularly as a result of contracting non-investment type loans for current spending. Loss of one’s job poses a greater threat in such situations. People will accept the extra burden and possible abuse of rights by employers without complaint. They will not go on strike or fight for their rights. Health is also endangered by continuous stress and ever present threats.

Our responsibility is to keep ill-considered indebtedness and people’s defencelessness within limits.

THE PRESIDENT (Translation). – Thank you. I call Mr Dupraz on behalf of the Alliance of Liberals and Democrats in Europe.

Mr DUPRAZ (Switzerland) on behalf of his group, thanked the rapporteur and the co-rapporteurs for an excellent report. He said that the world economy had improved since the last report, but that the ALDE still had some concerns. The economy was strong in places, but overall it was patchy. China had a strong economy. However, some of the Third World countries had an almost non-existent economy. The gap between rich and poor was widening. This had a direct impact on migration. While poor countries failed to improve their economy, there would always be a case for migrants to move to other countries.

It was in everyone’s interest to balance the world economy. He highlighted the explosion in cost of raw materials. Many countries had increased their standard of living, and therefore required more fuel in their day to day lives. The use of biofuels had increased the price of crops in many places including South America. The people of Mexico were affected by increasing food costs as the maize from their diet was sold to produce biofuel. In order to face such challenges, the Organization for Economic Co-operation and Development, the International Monetary Fund and the Council of Europe should co-operate more fully to exert influence on the world stage. He congratulated the Council of Europe on taking the lead on this matter. He hoped it succeeded.

THE PRESIDENT (Translation). – Thank you, Mr Dupraz. I call Mr Kallio.

Mr KALLIO (Finland). – I thank Mrs Papadopoulos for an excellent report, the contributors to the committee, and Mr Gurría, for his interesting contribution to the debate.

The global imbalance continues, seemingly for the foreseeable future. The United States invests more than it saves and the rest of the world saves far more than it invests. That is the big imbalance in the global economy. It involves a massive flow of capital to the United States from the rest of the world. Have we entered a new era in which massive one-way capital flows can take place for long periods without serious consequences?

Perhaps the best explanation of the current situation is that the United States and Asia enjoy a comfortable symbiosis. That is to say that the central banks of Asia, led by the People’s Bank of China, have funded a large share of the United States’ current account deficit to prevent their currencies from rising in value. In addition, the global rise in commodity prices has led to big surpluses in other countries, for example in the Middle East and in Russia, but has also been channelled into funding the United States’ deficit.

Without such intervention, the imbalance would not have reached its current level. Instead, the dollar would have fallen, United States interest rates would have risen, and the imbalance would have declined due to slower United States growth and more expensive United States imports.

What happens next? The worst thing would be for an unsustainable imbalance to lead to big swings in exchange rates, interest rates and asset values. Asset values could move rapidly because financial market participants became anxious about the sustainability of the current situation. Perhaps this has already begun. We can see the rise of long-term interest rates and the weakness of the dollar.

What about Europe? I think that Europe is at a difficult crossroads. Individual countries are finding it politically challenging to implement the kind of reform that might stimulate faster growth. In addition, the European Central Bank faces conflicting demands. Higher inflation countries are experiencing real currency appreciation compared with other countries, resulting in loss of export competitiveness. On the other hand, low inflation countries are experiencing excessively high interest rates, resulting in slow growth. The ECB has compromised with a policy of relatively high interest rates.

Today, the outlook for Europe’s economy is good, at least in the short term. Many member states of the Council of Europe have improved their welfare and pension policies as well as their employment policies. That has helped to increase participation in the labour market and cut joblessness.

THE PRESIDENT (Translation). – Thank you. I call Mr Murata, an observer from Japan.

Mr MURATA (Observer from Japan). – Mr President, distinguished colleagues, I am most pleased to be able to attend this meeting again and meet you all as I did last year.

As the chairperson of the international conference for disaster management of the United Nations, which was held three years ago, I agree with Mr Greenway’s proposal for strengthening each country against the natural disaster that we are discussing.

In the United States, there was concern that the economy would falter due to problems in the financial sector caused by uncollectible sub-prime loans and other issues relating to non-performing loans. However, I was pleased that the quick response of the Federal Reserve Board has avoided problems for now although the influence on the real economy in the future remains cloudy.

Following the collapse of the economic bubble, Japanese corporations and government underwent restructuring and there were advances in structural reform. Supported by a favourable global economy, the Japanese economy is overcoming its long recession. Lately, both corporate earnings and the employment situation have improved, personal consumption has rallied and exports are slowly increasing. It is expected that strength in the corporate sector will spread to the household sector as well, leading to ongoing recovery supported domestic private demand.

On the other hand, during Japan’s economic recovery, corporations increased irregular employment, which has resulted in income gaps among employed people becoming a serious social problem. Furthermore, a reduction in formerly generous public works distribution in regional areas and a decrease in the allocation of tax revenues and subsidies to local government have generated large inequalities between national and local government, causing great dissatisfaction in local areas.

Next July, Japan will host the G8 summit in Toyako, Hokkaido, in northern Japan near Russia. The most important topic for the summit will be environmental issues such as global climate change. As chair of the summit, Japan hopes to demonstrate its leadership in working to solve such issues.

The year 2008 marks the beginning of the period covered by the Kyoto protocol. Developed countries must make further efforts to meet their commitments. Furthermore, post-Kyoto protocol talks have begun. At the Asia-Pacific Economic Co-operation forum held last month in Australia, Japan lobbied the United States and China which lead to agreement to take action to improve energy efficiency. Since the 1970s oil crises, Japan has sought energy diversification, including nuclear power and efficient energy use. Today, Japan is a world leader in energy efficiency and can apply its technologies and experience in co-operation with other countries in measures against global warming.

The globalisation of the world economy constantly brings about inequalities among nations through harsher competition. The rise of emerging nations means new leaders in the global economy. In the light of that situation, it is my profound hope that the OECD will further expand and deepen its activities to contribute to the healthy development of the global economy.

Thank you, very much.

THE PRESIDENT (Translation). Thank you very much, Mr Murata for your valuable contribution.

I call Mr Kelemen.

Mr KELEMEN (Hungary). – I want to deal with the special case of Hungary, giving some background to the report and perhaps offering some thoughts about the new countries report of the OECD.

Those who follow the news will remember that last autumn in Budapest there was a series of demonstrations ending in police brutality. The demonstrations were a reaction to the election campaign of the current coalition, which in its manifesto envisioned a rapidly progressing and prosperous country and promised substantially higher living standards. The coalition was consequently re-elected. However, immediately afterwards the shocking information surfaced that the country was actually near financial bankruptcy. The people held the government responsible – namely, the Socialist-Liberal coalition that has now governed for five years – and demanded that the Prime Minister resign. However, he resorted to assaulting and intimidating people instead, sweeping aside human rights. At the same time, the Government hurriedly implemented corrections to the public finances, although by that time the real problem was distortion of the whole structure of the national economy.

Above all, I must point out that, compared to other countries, Hungary is over-privatised. As a consequence, international capital with its special privileges has managed to avoid proportional taxation, thus maximising its profits – an understandable goal; but it has also managed to bring down wages and make the state accept that situation. The majority of people live on very low wages in comparison to output. According to a survey by the Swiss bank, UBS, living expenses in Budapest are 67% of those in Zurich, while average wages are only between 6% and 7% – a tenfold difference on a parity basis.

The public sphere does not receive revenue compatible with the stage the country has reached or its development either in terms of capital or human labour. The accumulating deficit has led to increasing amounts of debt and increased influence from international financial markets. For a while, that could be counterbalanced by selling assets and borrowing, but it was clear that the process would not be sustainable for long.

Four decades of state-run economy have made it impossible for private capital to develop. In Hungary, the state’s privatisation policies and monetary restrictions – limited and excessive credits – have deprived people of existing working capital as well as the possibility of new capital formation.

The local population continues to become impoverished. Concurrent with the worsening of the global situation, tax evasion continues and increases. It is thus advisable to draw up recommendations that put the emphasis not on further restrictions, reductions and cutbacks, but on the successful build-up of the economy, conforming to the rules of the European Union based on true competition, solidarity, efficiency and integrity.

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

Mr BALČYTIS (Lithuania). – I thank Mrs Papadopoulos for her report and share the welcome, expressed in the draft resolution, for the achievements of the OECD and the opening of negotiations on membership of the organisation with the newly invited group of states.

Many other speakers have spoken about the figures and economic forecasts on economic development and I do not want to reiterate comments on the financial perspective, the rapid growth of some markets, especially in Asia, the sustainable growth of the eurozone, the slowdown of the United States’ economic bubble and other matters. I congratulate the OECD on what was done in respect of those issues.

I want to touch on another question. We all agree on the importance of all countries. Unfortunately, it is regrettable that some countries that fulfil all the membership criteria, including Lithuania, have not been invited to join the accession countries, although there was no doubt as to their compliance with the criteria.

At the same time, it is hard to explain the inclusion of other countries that failed to reach the necessary level of reform and investment environment. That may point to the absence of a coherent strategy for the development of the organisation based on objective requirements and goals.

I believe that those issues will be solved in the future and that we shall avoid negative feelings in some countries.

Thank you.

THE PRESIDENT (Translation). – Thank you. I call Mr Tilson, observer from Canada.

Mr TILSON (Observer from Canada). – I join others in congratulating Mrs Papadopoulos on producing a very good report, which touches on several issues of great importance to Canadians, including the need to reach a new global trade agreement in the Doha round of trade negotiations, the importance of domestic fiscal and policy reform in responding to the challenges, the opportunities provided by globalisation, and the fight against international corruption.

I want to take a few moments to provide some perspective on how Canada is taking steps to align itself with the economic opportunities that are being created in the world economy by globalisation. Canadians understand that we cannot maintain our quality of life without a strong, prosperous and competitive economy. We will not be able to build a solid economy without engaging in global markets and in the international institutions that are playing an increasingly important role, including the OECD.

It is, of course, not enough for political leaders, experts and business people to support this global engagement. There must also be broad-based public support for the policies of our governments and for the principles on which they are based. Domestically, we have taken several measures to make Canada more competitive globally, including fiscal consolidation, tax reform, infrastructure investments and regulatory streamlining. Internationally, we are pursuing simultaneous efforts in our Americas strategy and elsewhere to strengthen human rights and democracy, to build strong sustainable economies through increased trade and investment linkages, and to meet new security challenges, including natural disasters and health pandemics. In our view, those are closely connected objectives, and we want to work with our European partners towards achieving them.

One area where we must work together is regulatory reform, so that we allow all sides to take advantage of the opportunities created by globalisation. This is not a call for deregulation. What we are seeking are reforms that would eliminate unnecessary obstacles to economic growth and development, while ensuring that important social objectives can be served more efficiently by regulation. The OECD is already doing important work on that. In addition, Canada and the European Union agreed in June to “intensify work on regulatory co-operation, which makes a crucial contribution to the strengthening of trade and investment relations.”

Another area, and one on which we must all do more to achieve urgently needed results, is the reform of international trade rules. As the draft resolution rightly states: “failure to conclude the Doha Development Round would jeopardise the considerable progress already made and waste the opportunity to rebalance the multilateral trading system.” Canadians are very concerned about the lack of real progress in the Doha negotiations, especially on the agriculture negotiations. We have an open economy, and our goal is to create a more level playing field by eliminating export subsidies, substantially reducing trade-distorting domestic support, and making real and significant improvements in market access.

We strongly support trade liberalisation in agriculture, both because it would benefit our agriculture producers and processors and because it is urgently needed to improve the prospects for developing countries. Let us not forget that our governments committed themselves to “Develop further an open trading and financial system that is rules-based, predictable and non-discriminatory, includes a commitment to good governance, poverty reduction – nationally and internationally” when they signed up to the historic United Nations Millennium Development Goals in 2000.

THE PRESIDENT (Translation). – Thank you, Mr Tilson. I call Mr Sasi.

Mr SASI (Finland). – I, too, want to thank Mrs Papadopoulos for her good report, which forms a strong basis for this debate. The OECD is an excellent organisation. Its surveys provide good material for every political decision maker. We should use them even more in our preparation of policy. Its policy recommendations are often put to finance ministries in different countries and have resulted in structural changes in many countries, to the benefit of their citizens. The OECD also makes good treaties, such as tax treaties. The Assembly has been worried about tax evasion, and those treaties help in that respect.

The OECD is in the process of accepting new members. I am a little worried about that because I believe that developed countries are entitled to their own organisation. It is important that there is an organisation that can deal with the problems in developed countries and consider how those problems can be solved. It is important that the OECD never becomes a discussion club in which declarations are followed by political compromise and there is no real advice. Its work is based on science, and that must be preserved.

Mrs Papadopoulos’s report shows that globalisation has been good and useful for us. There has been pretty good growth over the past 20 years, and it is good that we urge that the World Trade Organization development round is concluded as soon as possible. Trade integration with Asia is very useful. It can be a long-term partner because it has a little-used labour force and there is huge demand for all kinds of products there. That will certainly lead to good growth for Europe in the future.

The US trade deficit has been raised as a problem, but I think that the market economy will drive development in the right direction. However, there is, of course, a problem with currency exchange rates. Those should be left up to the market so that every country’s currency is as strong as it should be. It is also important to have stability on the global scene. It would be useful if the OECD could give advice on legislation to poor countries. There must be predictable stability in all countries if we are to have economic growth. Protection of investment is also important. The OECD could continue the work that abruptly ended a decade ago and establish treaties that allow investments to be protected all over the world.

Pensions have been mentioned. It is very important that every generation pays for its own pension costs. We should not benefit from good pensions and say that the next generation will pay for them. We cannot accept that. It would be morally wrong.

On development aid, crisis management costs should be included as part of the official development assistance criteria. It is most important, even for this Assembly, that human life is protected. We sometimes need crisis management to protect human life. Economic growth in any country requires peace. If there is a crisis, we need crisis management.

THE PRESIDENT (Translation). – Thank you. The last observer country is Mexico. I call Jiménez Rumbo.

Mr JIMÉNEZ RUMBO (Observer from Mexico) congratulated the committee, particularly Mrs Papadopoulos, on an outstanding report, as well as Mr Gurría who was the Mexican President of the OECD. The Mexican delegation hoped that this work would bear fruit, that it would benefit OECD countries and strengthen the links between national parliaments. Mexico had adopted fiscal policies that had not always borne fruit. Over the last decade, it had averaged 2.2% GDP growth. Measures against unemployment had resulted in the concentration of wealth in the pockets of the few rather than a reduction in poverty. The same problems had occurred in Asia and Africa. There was a widening gulf between rich and poor countries.

The USA dominated global markets and its economic policies reached into other countries. The U.S. hegemony was represented in international bodies like the World Trade Organization, the World Bank and the International Monetary Fund. Those bodies managed international currencies and trade. There had to be an equitable distribution of wealth and fair policies to improve the standards of living of the poorest people. International trade agreements needed to work towards that end and help the most disadvantaged.

Labour and social policies needed to be fair to migrants and to respect the environment. The reforms under discussion had to reflect those issues. He had come to the Council of Europe to explain the situation in Mexico and put forward fair and equitable proposals for world trade and commerce. Supremacist ambitions helped no-one and nor did warfare. He congratulated the OECD on its work against corruption.

THE PRESIDENT (Translation). – Thank you. Our best thanks to you too, Mr Jiménez Rumbo, for your excellent contribution.

I must now interrupt the list of speakers. I remind you that Members who are on the list and present in the Chamber but who have not been called may submit their speeches in typescript to the Table Office in Room 1083 within 24 hours of the end of the debate for publication in the official report.

Mr Gurría, would you like to respond briefly to the debate?

Mr GURRÍA (Secretary-General of the Organisation for Economic Co-operation and Development). – Thank you, Mr President. Ladies and gentleman I shall make just a few comments in response to the questions that were asked. Mr Greenway, of course, we will continue to work on migration, which is one of the most important issues for us. When I came to OECD, I said, “Water, health, migration”. That has continued to be the case and we are conducting a very large project – what we call a “horizontal” project – on migration. The question of confidence that we are now facing will be solved with good macro policies as well as enlightened monetary policies and a lot of hard knocks on the regulatory side. As I said, regulations today cover only a limited universe. The more the market is differentiated and sophisticated, and the more it deepens, the more difficult it is to regulate, because we lose track of where the risk lies. That is what happened in this crisis, as we found that the risk emerged in China, in a bank in Germany going under, and in the loss of a few billion dollars for UBS. Now, we see problems at Citibank, Northern Rock, the Halifax and so on – the problem is cropping up all over the place. We will muddle through, and the authorities will do whatever they have to do. However, it is a stark reminder that our regulations leave much to be desired.

I agree with Mrs García Pastor that climate change is one of our priorities. In February, as I said, we will produce the environment outlook, then we will hold a meeting at ministerial level in March or April of the environmental policy committee. Then, hopefully, we will have our main theme – the economics and finance of climate change. May I deal with Mrs Sinicalchi’s contribution?

(The speaker continued in Italian)

The fight against corruption was one of the major areas of study and work for the OECD, as was international aid. There was an imbalance in the distribution of wealth and this difference was greater than in the past.

(The speaker continued in English)

May I tell Mr Braun that, yes, unfortunately, household indebtedness is the reality? We are already over-indebted. It is no longer merely a question. There is too much liquidity, as I said, chasing too few mortgages and too few projects. Interest rates have been too low for too long, and sales policy is too aggressive. There is too little economic literacy among the public. Teaser credits are offered – everybody gets credit today. This is a credit problem, and every single department store in every mall gives credit. People buy their cars and televisions on credit. Everyone is giving out credit. As long as the risk applies to the store or the O2 sales person, the consumer does not pay – it is others who go under. The problem arises when there is a systemic risk and depositors are at risk. The authorities must then come in and act.

Mr Dupraz spoke about growth, jobs and protection, and I agree that everything together is important. Mr Kallio spoke about imbalances. That is where most of today’s problems come from. China has $1.3 trillion of reserves, of which $300 billion will be invested through a sovereign wealth fund. There is a huge change in savings and investment decisions. If only one country changes policies on, for example, the currency in which deposits are held and the companies in which they are lodged, a different kind of problem arises. Size changes the nature of the problem.

I agree with Mr Murata that the problem in Japan is not about inflation – it is about moving away from deflation permanently and being able to achieve sustainable development. He put it very well when he talked about climate change: our aim is to give the post-Kyoto architecture a sound economic and financial footing. That is what OECD will do about the climate change issue. May I tell Mr Kelemen that I will be in Budapest next November, so I will check on the things that he mentioned? We will go to Budapest to present the survey on Hungary. Mr Tilson spoke about regulatory reform. We look at the regulatory reforms undertaken by all our members, and accumulated learning is important. May I tell Mr Sasi that enlargement will make OECD more global but not universal? We do not want every single country to become a member of OECD. We just want to get back to 75% to 80% of the world’s economy. Last but not least, may I focus on Mr Jiménez Rumbo’s last words and our work to fight corruption?

We are, of course, the depository of the convention on anti-corruption policies, which means that trans-border policies are not obtained by corrupting buyers.

We now have a UN convention. It mostly deals with the demand side; we mostly deal with the supply side, because we deal with the countries that normally promote corruption. Increasingly, countries such as Mexico – I will start with my own country – Brazil, Israel, China and India are not only buyers but huge suppliers, even of aircraft. In that case, maintaining the same behaviour on both sides becomes critical.

Thank you all for allowing me the privilege of addressing you. I look forward to continuing to work on the issues that you have raised.

THE PRESIDENT (Translation). – Thank you, Mr Gurría.

I call Mrs Papadopoulos, the Rapporteur of the Committee on Economic Affairs and Development. You have four minutes.

Mrs PAPADOPOULOS (Cyprus). – I thank Mr Angel Gurría for his contribution to the debate. I thank him for the first economic survey of the common economic policies of the European Union, which has already been written. It will help European countries to pursue sustainable growth in the evolving global economic environment, which is characterised by high oil prices and so many concerns and challenges.

I thank everyone who spoke for their contributions. I am especially grateful for the contributions from the four committees – the Committee on Migration, Refugees and Population, the Social, Health and Family Affairs Committee, the Committee on the Environment, Agriculture and Local and Regional Affairs and the Committee on Culture, Science and Education. Without them, the report would not be so complete.

I want to mention the contributions by some of my colleagues. Mr Greenway said that we should take measures to save the world for future generations and to help governments avoid major economic shocks. Mrs Siniscalchi mentioned that we need better public policies to transform globalisation into an opportunity for all. I agree that globalisation should be an opportunity not only for Europe, but for all the countries of the world. As has been said, there are many imbalances and changes, which are happening very fast. We should do everything possible in the initiatives that we take in the OECD, international institutions and this Parliamentary Assembly to ensure that globalisation is an opportunity for the poor and the rich, men and women, and developed countries and developing countries.

Finally, I appreciate the assistance provided by the Mexican delegation, the Canadian delegation and the delegation from Japan. The dialogue shows that this world is too small. If we want to face the challenge of globalisation, we should co-operate. I hope that the report will be the benchmark by which we find out next year how we have improved on our way to putting the theories into practice.

THE PRESIDENT (Translation). – I call the Chairperson of the Committee on Economic Affairs and Development.

You do not have to speak – he does not want to speak.

The debate is closed.

The Committee on Economic Affairs and Development has presented a draft resolution contained in Document 11357 and no amendments have been tabled. We will therefore go straight to the vote on the draft resolution.

Voting will be by show of hands to allow delegates from non-European members of the OECD, who do not have voting cards, to participate in the votes. When voting, please ensure that your hand remains in the air until all votes have counted.

We will now proceed to vote on the whole of the draft resolution contained in Document 11357. I remind the Assembly that a relative majority is required.

The vote is open.

The draft resolution in Document 11357 is adopted unanimously.

I thank you for your participation.

(Mr Holovaty, Vice-President of the Assembly, took the Chair in place of Mr Schmied)

6. Political Dimension of the Council Of Europe Budget

THE PRESIDENT. – The next item of business this afternoon is the debate on the report on political dimension of the Council of Europe budget presented by Mr Wille on behalf of the Committee on Economic Affairs and Development (Document 11371).

The list of speakers, which has been distributed, closed at noon today and no amendments have been tabled.

I remind you that we have already agreed that we shall interrupt the list of speakers at about 6.30 p.m. to allow time for the reply and the vote.

I call Mr Wille, the rapporteur. You have eight minutes.

Mr WILLE (Belgium). – Mr President, Secretary-General and dear colleagues, there is nothing like a free lunch. If, at the end of the day, justice is to be done and the Council of Europe is to be revived, we will have worked hard. However, we have not got that far yet. Colleagues, you must be saying, “Here he is again.” It is obvious that it is a duty of our committee to provide advice. Provided that those who receive the advice are open to advice and discussion, we have had no problems in the past.

Until 2005, most problems were solved. When the cost of the Court of Human Rights, the creation of which was probably the best decision that the Council of Europe has ever made, increased, the increase was paid for. After 2005, it was suddenly decided that the increase in the cost of the Court would be paid for by other elements of the institution, which is where the problem started.

That means that this institution – this Assembly – must see the Court as a very positive thing, but it should not of course accept that its own death is caused by the ultimate welfare of that institution. More and more people tell me that the institution of the Court is almost at a standstill, with 80 000 files there and hardly 8 000 files having come to judgment, and people waiting five years to get justice.

So we have two basic problems – with the institution of the Council of Europe and with the Court. It is time to act. The Secretary General knows how much I respect him but the policy followed up until now, with the efficiency savings, has been a policy we followed with your advice. We did our best. We have not been blind to the demands by the Committee of Ministers, as it has said, and as you have. In my opinion, with all due respect, this policy has failed. In some countries, not in all, euthanasia is permitted – it is legal when the patient is in a desperate situation and when the suffering is unbearable. I am not saying that we have reached euthanasia point, but the situation is becoming unbearable. That is why, Mr Secretary General, we have in the committee, and also in the standing committee in Belgrade, unanimously said that the policy of efficiency saving should be changed. I hope that you will have a change in attitude and back us. When talking to the Committee of Ministers, we must speak with one voice.

I see, especially when I go to the joint committees, that the only way is to take this to the table as a political problem and work in the national parliaments. That is why we have produced two documents. One is a draft resolution that is meant for the Assembly and says what we should do. We ask the Secretary General, who is manager of the Council of Europe funds and elected by all of us, to distinguish between issues that are political in nature and issues of purely administrative expenditure that affect the programme of activities.

The second document is meant for the national parliaments and for our members here so that they know very well how they will have to try to convince those who are, depending on whether they are in the majority or in the opposition, taking the real decisions. I cannot accept that human rights will in future be the problem only of diplomats and judges – I want it also to be the problem of politicians. You, dear colleagues, could be sitting here at a moment when this institution was slowly brought to death. I cannot live with that.

I am delighted to have been unanimously followed by our commission and also by the standing committee in Belgrade. When in the procedure we decided at a certain moment to have a debate and then changed our minds it was because we wanted to prepare everybody for a good debate in his national parliament. I want to see the Foreign Affairs Minister, who, after a good debate with a good document, says, “Okay, I will not give you a penny more.” Given the list of what is required, if we change the policy from zero growth in real terms into a slightly corrected approach which would solve our problems, that would not only allow us to survive but allow us to keep living the personnel of this house – currently Mr Secretary General.

The future of this house is now in doubt. Let us keep people at all levels. For God’s sake let them not go away to any other institution. For God’s sake let us not leave the people of the NGOs who are claiming our political activity by all means and in all fields. We can do nothing else but to send a strong message that that is what is meant in this text. Nobody can say that we have been too general. For example, in the explanatory memorandum, which I have the honour to propose to you, paragraph 16 contains a number of proposals that we make in order to make the role of the Council of Europe better tomorrow. That is the message that we want to submit to all of you.

THE PRESIDENT. – Thank you, Mr Wille. I call Mr Kox on behalf of the Group of the Unified European Left.

Mr KOX (The Netherlands). – Our rapporteur is a native Dutch speaker and a liberal. Normally, those who speak Dutch and think liberal do not like to spend money on political bureaucracy. Nevertheless, this rapporteur asked for money and other means and measures to support the Assembly as well as the organs of the Council of Europe. Did something happen to Mr Wille? If not, something is happening to this Assembly and this Council of Europe.

As the rapporteur states, we are in danger. We could become the victim of a slow death because our governments run the risk of jeopardising the Council, the Court and the Human Rights Commissioner, as well as the Assembly. Governments that depend on our parliamentary support do not want to spend one more dime on the only genuine pan-European political organisation that concentrates on the vital matters of democracy, the rule of law and human rights.

I have addressed this topic many times on behalf of the Group of the Unified European Left, but Cato did likewise. Sometimes that is necessary, so we will continue to raise the subject. Our group fully endorses Mr Wille’s worthwhile proposals to make requests to national parliaments and to urge national governments to act. Either national governments decide to get rid of the Council of Europe because they believe it is of no use and that the European Union is enough, or they decide that it is a vital pan-European institution. When meeting presidents of political groups in the European Parliament recently with other colleagues, I raised the matter again and it appeared that we could gain the support of European parliamentarians. I agree with Mr Wille that that is not enough, and that we have to do more. We must do our work at home.

It is easy to be speak here, but we must deliver at home. I agree fully with the rapporteur that we must be bad politicians if we take the opportunity to have a national debate with Foreign Affairs Ministers, deploy all the arguments that Mr Wille included in his report, but lose the battle. If that happened, there would be something very wrong with us or with our Foreign Affairs Ministers. However, I could not envisage a Foreign Affairs Minister who was that bad.

On behalf of the members of my group, I promise to promote a national debate on the budget for the Council, the Court, the Commissioner and the Assembly. I urge my other colleagues to do the same. Of course, we are not that important, but to lose this battle would be rather silly. When liberals and socialists agree, there must be something rotten in the financial state of this Council and we must do something to remedy that.

THE PRESIDENT. – Thank you. I call Mrs Barnett on behalf of the Socialist Group.

Mrs BARNETT (Germany) complained about the uncomfortable seats in the Chamber which were symptomatic of the fact that for over 50 years the Assembly had raised questions regarding the Council of Europe budget. If members faced such conditions in their national parliaments, they would be more vocal in their questioning as to why those circumstances prevailed. The Assembly adopted resolutions and reports that were meant to improve the lives of citizens, but in reality the wings of the members of the Assembly were clipped. The Assembly sung the praises of the European Court of Human Rights but the Court was not adequately financed.

Many member states of the Council of Europe were also members of the European Union. However, nobody seemed in control of the Assembly’s budgetary destiny. She wondered when parliamentarians in the Council of Europe had last gone back to their government and argued for an increase in the Assembly’s budget. Parliamentarians should seek to find a way of increasing the budget. It was important that the Council of Europe had good interpretation facilities. The Council also needed well-qualified staff. She pointed out that the Western European Union had the resources to enable the governing committees to meet whenever they chose. They had access to huge resources. The Council of Europe deserved the same. It was up to the Assembly to take control of its fate. The baton was in its hands.

THE PRESIDENT. – Thank you. I call Mr Van den Brande on behalf of the Group of the European People’s Party.

Mr VAN DEN BRANDE (Belgium) said that his party agreed with the rapporteur’s views. The budget of the Council of Europe had become a political problem. He said that, while the Assembly should engage in cost cutting activities, it had now almost begun to save paperclips and this exercise had reached the useful limit of making such economies. He said the Council of Europe was living in a period overshadowed by budget cuts. The requests for resources had raised questions about the use and values of the Council of Europe. It was essential that the Council of Europe was funded. Something needed to be done about the shadow-boxing that was currently taking place. Debates within the Chamber bemoaned the lack of resources, but parliamentarians were not accepting any personal responsibility. The Assembly needed to find a position where an increase in budget could be agreed. The European Court of Human Rights’ budget should not affect the budget of the rest of the Assembly. At the 3rd Warsaw Summit much lip service had been paid to what should be done about the situation. Nobody had done anything. Parliamentarians all had personal responsibility to change the situation.

THE PRESIDENT (Translation). – Thank you. I call Mr Eörsi on behalf of the Alliance of Liberals and Democrats in Europe.

Mr EÖRSI (Hungary). – Paul Wille and his colleagues who spoke harshly about the budget were right. The problem is no longer financial constraints or savings. We are facing a struggle for life, albeit perhaps not this year or next year. If I were to put the prospect for our budget in romantic terms, I would describe it as a matter of life or death. We all agree in this Chamber that it is up to our governments to help finance us.

I pay tribute to Italy, Belgium, Monaco, Switzerland, Slovakia, Portugal, France, and Poland, and the countries that are observing our debates. I will not give a list of the member states that are not represented – they may not be interested in our discussion. On the other hand, I have some sympathy with those who ask how they can put pressure on their governments when they represent those governments and not this Assembly. That is a problem. Again, Paul Wille is right when he says that the budget has a political dimension.

I apologise to the representative from Monaco for using his country as an example. However, if we consider countries’ contributions, we see that Monaco’s is €75 000. Several members have visited Monaco, where one can see that every second car on the streets of Monte Carlo is worth twice as much as Monaco’s contribution to this Organisation. I simply wanted to give members an insight and show them that we are talking about peanuts. Why is it difficult for member states to explain to their taxpayers that their country gives us money? They explain that they have to put money into their national judicial systems. Why cannot they explain that they should contribute money to a European judicial system?

Governments build highways, not traffic jams. If we do not put money into the European Court of Human Rights, there will be a huge traffic jam of citizens waiting for redress. Is that what we want? Is that what our governments want? I can hardly believe that it is.

What can we do? All my colleagues have asked that question. The idea is that we should all go home and put pressure on our national governments. I was somewhat critical about governments that are not listening, but let us look around the Chamber. Not many members are present, so even if Paul Wille managed to persuade each one of us to go home and fight for our national budgets it would not be enough.

The proposal was that we should merely try; we should try to make decisions and put questions to our Foreign Ministers. That will not really work because if we are in government, we are soft, and if we are in opposition, no one listens to us. That is not really the right way forward.

I have another proposal. In politics I have learned that applying political pressure means not just asking questions, but being obvious and unavoidable. The work that we do in Strasbourg cannot be ignored by our domestic press and media. We are on the front pages every day, and not just because some people in this Chamber call homosexuality a sin and compare it to kleptomania; we come out with wonderful messages and put political pressure on our governments.

My conclusion is that we should do a better job here and then turn to our national governments for more finance.

Thank you, very much.

THE PRESIDENT. – Thank you, Mr Eörsi. I call Mr Chope on behalf of the European Democratic Group.

Mr CHOPE (United Kingdom). – Mr President, like many other members, I was present in the Chamber on Monday morning, when we heard the President of this Assembly, who is not exactly a hater of the European Union or indeed anything other than a mild-mannered person, speak out about our budget problems. He said: “The foremost problem facing this Organisation is its members states’ attitude towards the budget. Of course, the Council of Europe must be run properly and responsibly, with an eye to avoiding waste”.

However, it is absurd that the European Union, whose members now constitute a majority in the Council of Europe, saw fit to establish the completely unnecessary Agency for Fundamental Rights. From the start, it has been obvious that the agency’s potential to duplicate Council of Europe activities is far greater than its potential to provide any real added value. The President went on to say that if the EU believes in fundamental human rights it should fund this Organisation in priority over that other body, which, as Mrs Barnett has said, already employs 100 staff.

Subsequently, at lunch on Monday, I raised the issue with the new British ambassador to the Council of Europe and asked whether she had heard about it. My impression, unfortunately, was that she had not been listening, or perhaps had not been present, when our President was speaking. However, she referred me to the fact that a quadripartite meeting will take place later this month and that the Council of Europe has appointed somebody to help to monitor the Agency for Fundamental Rights. But that is no good, is it? The quadripartite committee talks to the Council of Europe, but as more than half the members of the Council of Europe are in the European Union, that is simply the European Union talking to itself.

As individual members from countries in the European Union, we have now been completely eclipsed, because the European Union – 27 – operates on a block vote system when deciding what is to happen about our budget. It would be no good my going along to the British Parliament and saying, “Do something about it,” because they would say, “We are part of a block.” What has happened was predicted by many of us who campaigned strongly against the Agency for Fundamental Rights: the Trojan horse is now inside.

We should not delude ourselves: we are facing a serious crisis. What shall we do about it? We should campaign much more strongly against the Agency for Fundamental Rights and make the man who represents us on that agency come here to answer to us. He should give us a report about how much money the agency is wasting. That will give us extra ammunition to fire at our governments.

I should like one thing to come out of this debate: that the representative, whose name I think is Mr Guy de Vel – I do not know who appointed him or how he was elected – should come along to our next Assembly and give us an account of his work in monitoring the agency. As the President of our Assembly said, this is a serious crisis and at present I do not think that we have the equipment to tackle it effectively.

THE PRESIDENT. – Thank you, Mr Chope. I call Mr Mignon.

Mr MIGNON (France). (said that the report made by his Belgium colleague had caused alarm bells to ring throughout the Assembly. The Council of Europe’s budget was insufficient due to the pressure of funding the European Court of Human Rights. It was important that Protocol 14 was ratified by all member states to reduce the costs of the court. He believed an effort had been made to increase the Council of Europe’s budget by 2.74%. However, in reality, the Council of Europe faced budget cuts and its staff faced restricted salaries. Human rights were of vital importance and the Council of Europe was essential in defending those rights. There needed to be some global thinking about achieving a balanced budget and funding the organisations that defended human rights.

THE PRESIDENT. – Thank you. I call Mr Marquet.

Mr MARQUET (Monaco). said that he would give some figures. The budget for the European Court of Human Rights was 16% of the total budget in 2000 and 25% in 2007. The budget for inter-governmental co-operation was 37% of the total in 2000 and 33% in 2007. The figures for the Parliamentary Assembly were 9% and 7% respectively. Current policy was to give the Court what it needed and therefore provide less for other functions. This was unacceptable. The Council of Europe was being dismantled under cover of reforms. It was unable to do its job properly, particularly after the Warsaw Declaration.

Chapter 1 of the Council of Europe Charter stated that it must respond to members’ needs. Reducing its budget reduced the number of meetings it could hold and the capacity of its Secretariat. The Assembly could agree resolutions, but these would not be implemented if there were cuts to the budget for inter-governmental co-operation. He supported the European Court of Human Rights, but providing resources to the court should not mean the slow death and administrative strangulation of the Council of Europe. For example, Resolution 1794 on pharmaceuticals in Europe had recently received a response from the Council of Ministers who had carried out a feasibility study. This would not have been possible if they had not had a sufficient budget for human resources and administrative support.

THE PRESIDENT. – Thank you. I call Mr Negele.

Mr NEGELE (Liechtenstein) said that, looking at the report, he was reminded of the expression “short but sweet”. The Council of Europe needed to discuss this matter openly. It had been a concern for some time. The Council of Europe was the oldest international organisation and a rescue package for it was overdue. The rapporteur had done an excellent job, and he fully supported the report. As a new member, he thought that the Council of Europe was at a crossroads and had to fight for its flagship of democracy, the rule of law and human rights. It had to steer this flagship back on course. To do this, it required sufficient resources. For many years, the Council of Europe had undergone budget cuts and those were responsible for the current situation.

There were not many figures in the report, but this was acceptable since it was principles that mattered. The basic constitution of the Council of Europe did not require all its resources to be spent on the European Court of Human Rights to the neglect of its other functions. It was neither practical nor responsible for the Parliamentary Assembly not to have powers over the budget. It had to be clear to national governments that the Council of Europe needed to remain the symbol of humanity.

He was pleased that President van der Linden had remarked in his opening speech upon the matter of the budget and the danger of losing quality if cuts continued. There was also the problem of the twin-track approach with the establishment of the European Agency for Fundamental Rights, which mirrored the work of the Assembly. It was time to give a clear signal to the European Union Council of Ministers and to national governments that the Council of Europe needed resources in order to be credible and to continue its work on human rights and democracy.

THE PRESIDENT. – Thank you, Mr Negele. I call Mrs Pirozhnikova. She is not here. I call Mrs Papadopoulos.

Mrs PAPADOPOULOS (Cyprus). – The Council of Europe faces a big dilemma. On the one hand, it needs to modernise and improve its functions. On the other, it has to cope with the growth of the European Court of Human Rights. From a financial angle, the decision is not easy because the Council faces budgetary constraints and cuts in the funds allocated to its activities. At the same time, it has to contribute towards the budget of the European Court of Human Rights by submitting more than 53% of its ordinary budget, compared with its contribution of 20% in 1999. That dramatic increase is explained by the fact that the Court is swamped by an ever-increasing number of applications submitted by European citizens, and its current resources are insufficient to meet its obligations.

Budgetary restrictions and a lack of necessary funds prevent the Council of Europe from translating into action the tasks and priorities identified by the Warsaw Summit on major issues that affect European society in broad spheres of activity, including human rights, legal co-operation, democracy, good governance, social cohesion, health, education, youth, sport, culture and intercultural dialogue. Unless recovery measures are taken urgently, the Council of Europe’s international credibility will be seriously affected. It will no longer be in a position to attract high-calibre candidates with the brain power that is essential for its functions. Most importantly, the Council of Europe will collapse economically and will not be able to play a political role in the European unification process. Moreover, the absence of adequate financial and human resources is a concern for various steering committees of the intergovernmental co-operation sector, such as the steering committees on crime, on higher education and on research.

As parliamentarians, we know and appreciate the Council of Europe’s unique role as a guarantor of democratic values throughout the continent. We are aware, too, of the importance and exceptional role of the European Court of Human Rights. Now is the time for decisions. I fully endorse the rapporteur’s recommendations including, first, the need to distinguish political and administrative issues in any approach to reform; secondly, the need to conduct consultation on expenditure with all political and judicial organs and bodies; and thirdly, the need annually to inform the Assembly in the report by the Secretary General, about the political and budgetary situation. I agree, too, that national parliamentary assemblies of the member states of the Council of Europe should pay more attention during their budgetary discussions to the political dimension of the Council’s budget and re-evaluate their expectations, obligations and commitments. I congratulate the rapporteur, Mr Wille, on his valuable report, which has provided the basis for a sound debate.

THE PRESIDENT. – Thank you. I call Mr Rigoni.

Mr RIGONI (Italy) said that the debate on the political dimension of the Council of Europe’s budget was of the utmost urgency. There was a serious and deep-seated crisis. The Council of Europe was the guardian of the values of the continent and the Parliamentary Assembly had to act as the democratic conscience of Europe. This decline had to be prevented, otherwise it would be the chronicle of a death foretold. He was surprised that not many delegates had spoken during the debate and he noted in particular the position of the French delegation. He supported Mr Wille’s report and thought that the budget was woefully inadequate for the amount of work involved.

The Council of Europe had been in strict compliance with the rule on zero growth in real terms. If this continued, there would be further cuts and it would be unable to fulfil its functions. Up to 2005, the zero growth rule applied to all sectors except the European Court of Human Rights, which attracted additional support from member countries. Now budgets were being cut because of “efficiency gains”. There were no efficiency gains in the death of the Organisation. In any case, efficiency gains at the Council of Europe had not helped the Court as it was snowed under with applications and its work was being duplicated by the Agency for Fundamental Rights in Vienna, which had considerable funding.

He was concerned that the intellectual capital of the Council of Europe, namely its civil servants, would drain away. The Council of Europe had been proud of its intellectual pre-eminence since 1949 and those who worked here needed appropriate rewards. The role of the Parliamentary Assembly in setting the budget needed to be strengthened. The Council of Europe would not have political autonomy unless it had the right to set its own budget. National governments needed to demonstrate their commitment. There was a contradiction between the Warsaw Declaration and the current funding situation. Parliamentarians had a duty to raise awareness in national governments. Human beings had been able to conquer the earth and space yet this frontier remained.

THE PRESIDENT. – Thank you, Mr Rigoni. That concludes the list of speakers.

I call Mr Wille, rapporteur, to reply. You have four minutes.

Mr WILLE (Belgium) said that he was an optimist and this was because all the delegates were singing from the same hymn sheet. The European Union was obliged to have the same opinions as the Council of Europe. It was simply their duty. In addition, the Warsaw Declaration had supported the institution, unless it was a question of “do as I say not as I do”. In any case, any politician following that line would have to face the judgment of the people. He was optimistic that there would be no further excuses for a budget freeze. The Council of Europe had itself proposed a €170 000 cut, but this had been changed to €300 000 by the ambassadors with no consultation. If this happened again, there would be a revolt and it would lead to a divorce with the Council of Ministers, which would be very costly.

THE PRESIDENT. – Thank you.

Does the Chairperson of the Committee, Mr Vrettos, wish to speak? You have two minutes.

Mr VRETTOS (Greece) said that the Council of Europe was faced with a situation that was no longer tenable. National governments were indifferent, irresponsible or poorly informed. He thought it was the latter. Delegates had to inform their governments of the situation. He wondered why the hemicycle was not full. Colleagues needed to be informed about this matter. For the second year in a row, Mr Wille had done the best possible job as rapporteur. He was not only a representative of his committee but of the Council of Europe Parliamentary Assembly.

THE PRESIDENT. – Thank you.

The debate is closed.

We will now proceed to vote on the whole of the draft resolution contained in Document 11371.

The vote is open.

The draft resolution in Document 11371, is adopted, with 41 votes for, 0 against and 0 abstentions.

We will now proceed to vote on the whole of the draft recommendation contained in Document 11371.

The vote is open.

The draft recommendation in Document 11371 is adopted, with 44 votes for, 0 against and 1 abstention.

(Mrs Lavtižar-Bebler took the Chair in place of Mr Holovaty)

7. For a European Convention on Promoting Public Health Policy in Drug Control

THE PRESIDENT. – The next item of business this afternoon is the debate on the report for a European convention on promoting public health policy in drug control presented by Mr Flynn on behalf of the Social, Health and Family Affairs Committee (Document 11344).

The list of speakers, which has been distributed, closed at noon, and no amendments have been tabled.

I remind you that we have already agreed that we shall interrupt the list of speakers at about 7.20 p.m. to allow time for the reply and the vote.

I call Mr Flynn, rapporteur. You have eight minutes.

Mr FLYNN (United Kingdom). – In 1968, the world thought that it had the answer to the problem of drugs. The United Nations formed a policy based on the elimination of drugs supply and harsh penalties in order to use the criminal justice system to eliminate all drug use within a decade. It was an utter disaster. In 1971, we had fewer than 1 000 drug addicts in my country; we now have 280 000.

It is hard to believe that now, all these years later, the policy to which we have all signed up in the United Nations, which was agreed in 1998, involves total elimination – this is the fantasy world in which we are living – or a very substantial reduction in all illegal drug cultivation and use. That is an utterly unattainable policy goal, but billions of dollars, euros and pounds have been spent on it. The result has been the unimaginable tragedies that we see in cities and towns throughout the world.

When the iron curtain came down and the former communist countries were exposed for the first time to an influx of drug use, they turned to us, as western states which had had that problem for many years, to find out about our solutions. They had the right to ask us how to deal with that situation, because we had experience. They heard a babble of voices and different explanations. In the past few years, in this Council and elsewhere on our continent, we have had a self-indulgent dispute about the right policies – pragmatic policies or prohibition – and the result has not been productive and has not helped at all.

We must consider joining forces to decide the way forward. The point of the document is to introduce a convention. The document does not contain all the answers, but we want to ask the questions in a systematic and scientific way. In the past decade, methods other than prohibition or stifling drug supply have been tried. Such methods have mainly been successful, but they have been used in a fragmented way throughout our continent. The successful methods have been independently assessed by the European Monitoring Centre for Drugs and Drug Addiction, which has said that for every euro that is spent on health outcomes, such methods bring back between €4 and €7 in benefits by reducing drug crime and cutting cases in the courts. If you add to that the health benefits of using such alternative methods, you get 12 times the sum spent.

On top of that, such methods produce a vast increase in human well-being. I have pictures in my mind of constituents of mine. In the past two years, two young people in my constituency who had gone to jail died – one of them died a week after their jail sentence ended, and the other died after a day. In one former communist country, there is a whole hospital, which we were due to visit, entirely filled with children who were born with AIDS, 80% of whom are the children of drug users. The great scourge of drug use and abuse is felt across our continent and across our world. As Europeans, we need to make our voices felt. We need a clear line when a decision is taken in six months’ time to consider the United Nations 10-year strategy. We can do that as the Council of Europe. It is one of our core duties – it is part of our main acquis – to say to people that they should have the right to health.

The basis of the report has been developed by the Pompidou Group, which fully supports this approach, although there have been differences over the years. The main people who are pushing this approach and presenting it as the practical way forward are the International Federation of Red Cross and Red Crescent Societies and a number of other bodies. The Council of Europe has a great task to perform. We need to consider the future of drugs in terms other than the traditional methods, many of which have failed.

We are not saying that there should be a lack of subsidiarity or an end to preventive work, which should continue. We want to see an organic process that will assess itself. We need to see what works and to examine the evidence base, which should be independently assessed.

I hope that the Council of Europe will approve the report today. The report includes a policy that could be hugely beneficial for our citizens – we are a huge part of the world stretching from Lisbon to Vladivostok. The policy can be productive, and it can be creative.

THE PRESIDENT. – Thank you. I call Mr Waalkens on behalf of the Socialist Group.

Mr WAALKENS (Netherlands). – Our rapporteur, Mr Flynn, has made an excellent contribution with his report on a European draft convention on promoting public health policy in drugs control.

Drug use can cause serious health problems. The rapporteur focused on public health-oriented responses, which are important. The aim of the convention is to promote health as a fundamental right in the context of problem drug use. This is not a moral issue, and it is unfair to criminalise drug users. The answer in many situations is accessible, efficient and adequate public health care to enable targeted treatment, re-education and social reintegration. We should not criminalise such people and take only repressive measures.

The report is based on scientific research and practical experience. In the Netherlands, we have the three-way approach, and the figures show that it is very successful. There are, of course, drug-related criminal activities, and drug dealers must be caught and punished and networks must be dismantled. As part of the European drugs strategy 2005-12, the EU aims to achieve a high level of health protection. Prevention and reducing drug use should be the aims. It is, of course, also true that drugs cause social problems.

I compliment the rapporteur. I hope that the recommendations will be implemented in member states, which I hope can establish a convention in order to co-operate. Colleague Flynn and his staff have done an excellent job.

THE PRESIDENT. – Thank you. I call Mike Hancock on behalf of the Alliance of Liberals and Democrats for Europe.

Mr HANCOCK (United Kingdom). – I would first like to echo the comments made in the previous contribution about the credit that should go to Paul Flynn for the efforts that he has put in, not only on this report but on this issue in this Assembly, and also for the work that he does back in the UK in our own parliament on this very important issue and his attempts to get this issue on the agenda in such a way that people are prepared to actually start to talk about it.

He referred to issues in his own constituency. I was born in the 1940s, grew up through the 1950s and enjoyed the 1960s. My closest friend in the 1960s went to prison for possessing cannabis. Three months later, he came out of prison and he was a heroin user. Six months later, he was dead. Six months further on, his younger brother died of a similar overdose. I had the misfortune of finding my friend dead of a drug overdose on the floor of the squat that he was living in. That taught me an awful lot of lessons. It taught me that punishing the user by imprisoning them was not a way of solving this problem.

Paul Flynn has tried in his previous attempt here to get this issue raised and brought to our attention and has spelled out that it is a public health issue. It is about “better alive than dead.” It is about it being better in some instances to prescribe drugs for some people if that keeps them alive. I have listened with great admiration to doctors in the UK who have fought the system for two decades in an attempt to keep alive addicts who came to them by prescribing drugs only to have their careers ruined because the British Medical Association and others in the UK took a very hard line and suggested that they were prescribing when they should not have been doing so. Yet their only ambition was to keep young addicts alive and give them an opportunity to get off drugs.

This document is particularly important because of paragraph 8 and the three points there. It suggests that the whole convention should be predicated on three objectives. The first is “to promote, as a fundamental human right, the right to health in the context of problem drug use” – exactly what Paul Flynn and our Dutch colleagues said. The second is “to clarify the scope of the right to health as it applies to problem drug use” and the third is “to help identify good practices for the operation of the right to health as it applies to problem drug use, at the community, national and international levels.” That is what has been lacking. Many people talk about a magic bullet solution to drugs. There has been the drugs czar in the United Kingdom, the enormous clampdown and expense in the United States – all to no avail.

We need to share experiences where we know that they have been tried and tested and actually work – that they do the three things that we crave. First, they must give people the opportunity of staying alive long enough to get off drugs. Secondly, they must ensure that when people get off drugs it must be in such a way that they have a future in front of them. Thirdly, they must help us learn from the terrible mistakes that have been made. This convention is long overdue. I am delighted that we are discussing it and that there are so many members still around to do so at this late time. However, we could and should have done this when the report was first brought to the Assembly three or four years ago. It is balanced, it understands and defines the problem perfectly, and I hope that it will be unanimously endorsed this evening.

THE PRESIDENT. – Thank you. I call Mr Boswell on behalf of the European Democrat Group.

Mr BOSWELL (United Kingdom). – I, too, congratulate the expert rapporteur on his excellent and well balanced report. This is a subject that often generates more emotion and political heat than it creates light and understanding.

I begin my comments with the simple observation that, whatever may have been the situation in the 1950s or 1960s we now face the use of illegal drugs as an extremely prevalent practice – almost a universal practice – with a very high proportion of young people in nearly all our countries experimenting at least with cannabis and some, though not all of them, going on to suffer problems in consequence. There is no time tonight to analyse the chain of causation from first use of a controlled drug to problem use of any of a range of various substances, but the report is absolutely right, in its principles related to the work of this Council, to define the public health problem in the context of problem drug use, to clarify its scope, and to identify good practices to deal with it.

I would like to stress two points in particular. First, the report is respectful of the right to subsidiarity of decision making in member states. All it recommends is the creation of a drug policy framework convention within which each member is encouraged to work out local solutions based on the local culture, respecting the needs of individuals and of course trying to learn from the experience of others. Secondly, the report is in no sense a soft document or soft option. It does not advocate the legalisation of drugs, it does not seek to challenge existing national or international regimes of legal penalty, for example in dealing with importation or trading in drugs, and it does not even mitigate or suggest mitigation of penal regimes for those duly convicted of an offence. What I feel that it is seeking to achieve is an entirely desirable parallel approach to any penal regimes that we have.

We know that the drug abuse problem is very widespread. That is not just a tragedy for individuals but has alarming and often rather directly targeted social consequences – for example, in people stealing to feed their habit and in the concentration of problem drug users in prisons. We simply cannot rely on the at least questionable resources of either penalties or supply control. We must offer proper rehabilitation services, which can be demonstrated to be very cost effective. This is, we recognise, a public health problem, and if good practice is shared among us we can help to tackle it by reducing demand at that end of the problem.

I believe very strongly that this is today a universal issue. Prevention is better than cure, and cure is far better than an unsupported penal regime that seeks to coerce large sections of the population, unless that regime is supported by strong public health policies. The report is a wake-up call for the proper evaluation, development and monitoring of national drug policies, and I warmly welcome it.

THE PRESIDENT. – Thank you. I call Mr Van Herven on behalf of the Group of the Unified European Left.

Mr VAN HERVEN (The Netherlands). – Throughout history, people have used drugs or displayed addictive behaviour. It is a facet of mankind with which we must deal. More than 2 000 years ago, a tribe called the Batavians lived in the Netherlands. It seems that they drank a lot of beer and were gamblers who played dice, with their wives as a stake.

Times have changed, but addictive behaviour is always present. We shall never eliminate it completely, but the question is how to prevent it as far as possible. The Group of the Unified European Left considers the report on the European drug convention to be a good piece of work and is very pleased with it. It deserves to be widely disseminated.

I have been a general practitioner for more than 15 years and I emphasise the importance of the proposed measures on prevention and education, treatment methods, rehabilitation, social reintegration, and monitoring.

On behalf of the Group of the Unified European Left, I want to highlight a few aspects of the report that struck us and that cannot be emphasised enough. First, it is clear that preventive action and treatment for problem drug use can be effective. For example, in the Netherlands we have a programme of harm reduction that works well. It is better for the people involved and also when one considers the matter financially. Every euro or dollar invested in opioid dependence treatment programmes yields a return of between four to 12 in reduced drug-related crime, criminal justice costs, and health care costs. One seldom sees such a dividend in business. Those data must be widely spread to stimulate countries to invest in preventive action on problem drug use. Let us not be penny wise and pound foolish in this matter.

Secondly, neo-liberal policy in different countries is leading to a hardening of attitude. Daily, one hears the sentiment that if people get addicted it is their own choice and responsibility. The answer is often the repression and punishment of addicts instead of help and compassion. Those marginalised and vulnerable people have a fundamental right to health care in the context of problem drug use. Furthermore, one may say it is people’s fault, but people’s actions are influenced by their circumstances.

Why do people use drugs? There is a relationship between addiction and poverty and people’s perspectives. People without a job, homeless people and those without money are more vulnerable to using drugs to forget their misery. Let me provide some Dutch data. People who are poorly educated smoke twice as much as highly educated people. In the Netherlands, 50% of addicts are unemployed, and one third to two thirds of the prison population are drug addicts.

We must invest in improving the social circumstances of addicts. There must be rehabilitation programmes for them when they leave prison. If they do not have a home and do not get a job or receive education, their chances of relapsing into addiction and criminality are high.

More generally, education, development, employment and adequate housing are the main instruments of reducing the number of problem drug users. We are convinced that, in a more healthy and stimulating environment, people will be healthier. A better society creates better people.

THE PRESIDENT. – Thank you. I call Mr Marquet.

Mr MARQUET (Monaco) thanked Mr Flynn for the report, which had set out the problem facing Europe exceedingly clearly. Drug abuse affected everyone. It was important for this to be made as a public statement. It was a public health issue. This was a good position for the European states to take as all states were facing rising public health care costs. European citizens had a right to expect to be healthy and not just free from disease. Health education was essential and should cover all drugs including legalised toxic substances such as tobacco and alcohol. Drugs had implications on health, family and social issues. The children of Europe were vulnerable and were failing to receive adequate education on this issue. He also noted that the quality of product had changed dramatically in the last few years. One in 10 cannabis joints had high levels of tetrahydrocannabinol. It was also unfortunate that cannabis had become more socially acceptable. Efforts needed to be made to dispel the myth that cannabis was harmless. It was a psychotic inducing drug.

THE PRESIDENT. – Thank you. I call Mr Rafael Huseynov.

Mr Rafael HUSEYNOV (Azerbaijan). – I stress the importance of the report to a topical and important problem. Today, several problems are creating anxiety throughout the world: terrorism, illegal arms trafficking and separatism, which is one of the major causes of military conflicts. Undoubtedly, drugs, which are one of the most terrible sources of danger for humanity, are high on that list. Indeed, drugs are linked with all the dangers that I mentioned and, to some extent, are a basis for their development. Every year, the profits gained from drugs trafficking amount to more than $400 billion. That is 8% of world trade.

The most suitable places for the cultivation and transmission of drugs are uncontrolled zones. Azerbaijan, 20% of whose territories have for 15 years been under occupation by Armenia – another Council of Europe member state – is experiencing the problem with all its horrors. Drugs are cultivated in 141 hectares of the territory of the occupied Azerbaijani district of Zangilan, 210 hectares of the occupied district of Gubadli and 176 hectares of the occupied district of Fuzuli. The facts regarding that massive cultivation of drugs appear not only in the publications of the special services but in books and research, with maps accurately indicating the sites of the cultivation. Those publications are based on concrete facts presented by several researchers from various countries.

There are facts about the massive fires that regularly occur in the occupied Azerbaijani territories. Although Armenia has denied these occurrences for a long time, both satellite pictures and investigations by several international missions in the region have confirmed them. To what do these fires relate? The occupying regime cultivates drugs in those territories and, after the harvest, starts the fires to liquidate the evidence. The drugs cultivated in the occupied and internationally uncontrolled territories of Azerbaijan are transported all over the world through Afghanistan, Iran and middle Asia. There are many terrorist camps in those territories.

The large amounts of dirty money gained from drugs are directed at developing other sorts of crime such as maintaining terrorist camps and illegal arms and drugs trafficking. Those crimes occur continually and threaten not only the region but the entire world. Those territories are under Armenian control and that state bears responsibility. To solve the problem, the uncontrolled zones should be subject to international control and Armenian aggression should be stopped. There is no doubt that the Council of Europe can take effective steps in that regard. It is vital to carry out a separate investigation of the problems of drugs and terrorism in the south Caucasus territories that are outside international control. We have issued several documents in the Parliamentary Assembly that are based on undeniable facts. Nevertheless, there is a need for a special report that takes a more systematic approach to the matter. Given that big disasters affect everybody, it is not possible to yield genuine results without combating them jointly.

THE PRESIDENT. – Thank you. I call Mr Goldstein.

Mr GOLDSTEIN (Observer from Canada). – Thank you, Madam President and colleagues.

I congratulate Mr Flynn and his staff on the splendid report that they have produced. The recommendations point clearly to three principal and inter-related objectives and suggest the incorporation of four elements: prevention and education, treatment, rehabilitation and social reintegration and, finally, monitoring and evaluation aimed at identifying best practice.

I shall be brief, but I want to reflect on the Canadian experience with respect to drug control and share with the Assembly the steps that Canada has taken and the areas where Canada has not yet succeeded in finding, and is trying to find, a viable policy to solve this complex debate.

The predominant interest in proper drug control strategy is precisely and solely to minimise individual and societal harmful effects. Attempts to limit the supply of illegal drugs through law enforcement and legal sanctions have failed, not only in Canada but throughout the world.

The impact of illicit drug use falls first and foremost on drug users, their families and their communities. The human cost is not equally distributed. Substance abuse is especially prevalent among the young and young adults, and among marginalised groups, such as street-involved youth, aboriginal peoples, sex trade workers and people who have been in contact with the criminal justice system.

Canada’s drug strategy is not dissimilar to that proposed in the report. It is based on four main pillars, but the dominant pillar has to be harm reduction where we must adopt a value-neutral approach to substance use and abuse. Instead of treating substance abuse strictly as an illness requiring a medical solution, and instead of seeking to punish drug users with legal sanctions, harm reduction programmes must focus on trying to mitigate the harmful effects of drug use by providing addicts with materials and knowledge that allow them to use drugs as safely as possible. That is an approach that finds its echo in your report, Mr Flynn.

Harm reduction initiatives in Canada often take the form of needle syringe programmes that distribute sterile syringes to injection drug users. They may also involve distribution, free of charge, of safe crack-pipe kits. Such types of harm reduction limit the spread of diseases such as HIV, hepatitis and other blood-borne diseases while giving social workers the opportunity to provide drug users with information about detoxification treatment, should they want it. There are more than 200 of those programmes, located throughout Canada’s provinces and in two of Canada’s territories.

Two other more developed harm reduction programmes should be noted. The first is in Vancouver, which is the home of North America’s first legal medically supervised injection site. Users inject pre-obtained illicit drugs under the supervision of medical staff who provide them with sterile syringes and information about safe injection practices, and care for them in the event of an overdose. Staff also provide clients with referrals to detoxification centres should they want it.

Two other cities are involved in NAOMI – the North American Opiate Medication Initiative. The project runs controlled clinical trials to assess whether the prescription of pharmaceutical grade heroin to chronic injection users might help those who have a proven resistance to other detoxification methods.

Substance abuse carries a horrendous cost. The financial burden is high but the burden on users and the emotional burden on their families and those who interact with them is intolerable. The emphasis on rehabilitation and the de-emphasis on criminality envisaged in the report is a highly valuable addition to international thinking and strategising on this horrible problem. We are grateful to you, Mr Flynn, for your report.

THE PRESIDENT. – Thank you, Mr Goldstein.

That concludes the list of speakers.

I call Mr Flynn, rapporteur, to reply. You have four minutes.

Mr FLYNN (United Kingdom). – This has been an immensely stimulating debate and I was especially struck by the contribution from North America. We are aware of the great strides made in Canada on harm reduction.

A change is coming over us. There is realisation throughout the planet that we have been on the wrong track and that the war on drugs has been a war against our children and grandchildren. They end up being treated as outcasts when they should be treated as patients. They are thrown into jail. There is no jail in the United Kingdom where illegal drug use does not occur. We cannot keep drugs out of jails so how on earth can we pretend that we can keep drugs out of society – out of schools and clubs?

There has been a monumental failure and we as politicians and parliamentarians should hang our heads in shame. We have stayed in our national stockades; we have been comfortable with our own solutions and deluded ourselves that they were working effectively while all the time the statistics were rising. The number of families destroyed is rising. The amount of corruption in our police and prison services is increasing. Over the past five years, Britain has had responsibility for reducing drug production in Afghanistan. We have spent £250 million and lost 70 of our troops, yet the amount of drugs produced in the country is at a record high and increased by 60% last year.

We know what works. We know that needle exchanges work. We know that drug substitution works; it is very effective. We know that the psycho-social systems that have been applied are effective. Our job as Europeans and members of the Council of Europe is to pool our good experience and share it. We should assess it and examine it constantly.

I believe our document can be of great importance. We need the convention. The best job that the Council of Europe can do would be to pass it unanimously and I hope that it will be the first step towards changing our whole attitude towards drug use. We have had counterproductive policies that increased harm year after year, but we have systems that are already showing a reduction, albeit to a small extent, in drug crime and drug use. The path for the Assembly is through the convention.

THE PRESIDENT. – Thank you, Mr Flynn.

Does the chairperson of the committee, Mrs Pernaska, wish to speak? You have two minutes.

Mrs PERNASKA (Albania). – I know that we are at the end of a very busy day and that most of us are tired, but I expected more members to be present in the Hemicycle to debate this important subject. That is why I want to pay special thanks to Mr Flynn for doing a wonderful job. I also thank all the support staff of the Social, Health and Family Affairs Committee for their help in producing this useful report. It is professional, well written and well presented. In addition, we will have a convention on the subject, which will be a very important tool for us not just as politicians and parliamentarians, but as people who are concerned about the subject as citizens, parents and, when relevant, specialists. We have a good chance of using this report in all our countries. It will be useful to have the convention so that we can improve our national strategies and policies on drug use and drug control. I am sure that it will help us all to address the common challenge of drug control.

THE PRESIDENT. – Thank you. The debate is closed.

We will now proceed to vote on the whole of the draft resolution contained in Document 11344. A simple majority is required.

The vote is open.

The draft resolution in Document 11344 is adopted, with 24 votes for, 0 against and 0 abstentions.

We will now proceed to vote on the whole of the draft recommendation contained in Document 11344. A two-thirds majority is required.

The vote is open.

The draft recommendation in Document 11344 is adopted, with 26 votes for, 0 against and 0 abstentions.

8. Date, time and orders of the day of the next sitting

The PRESIDENT. – I propose that the Assembly holds its next public sitting tomorrow at 10. a.m. with the orders of the day which were approved on Monday 1 October.

Are there any objections? That is not the case.

The orders of the day of the next sitting are therefore agreed.

The sitting is closed.

(The sitting was closed at 7.40 p.m.)

Contents

1. Examination of credentials

2. Organisation of debates

3. Regionalisation in Europe

Presentation by Mr de Puig of report of the Committee on the Environment, Agriculture and Local and Regional Affairs (Doc. 11373)

Speakers:

Mr Dupraz (Switzerland)

Mr Wilshire (United Kingdom)

Ms Konečná (Czech Republic)

Me Mendex Bota (Portugal)

Mr Kallio (Finland)

Mr Van den Brande (Belgium)

Mrs Hadžiahmetović (Bosnia and Herzegovina)

Mrs Durrieu (France)

Mrs Jazłowiecka (Poland)

Mr Sudarenkov (Russian Federation)

Mr Ékes (Hungary)

Mr Dorić (Croatia)

Mr Mota Amaral (Portugal)

Mr Simms (Canada)

Mr Pozzo di Borgo (France)

Replies:

Mr de Puig (Spain)

Mr Schmeid (Switzerland)

Amendments Nos. 2 and 1 adopted.

Draft recommendation, as amended, adopted.

4. Organisation of debates

5. The OECD and the world economy 2007 (enlarged debate)

Presentation by Mrs Papadopoulos of report of the Committee on Economic Affairs and Development (Doc. 11357)

Contribution from Mrs Roseira of the Social, Health and Family Affairs Committee (Doc. 11395)

Contribution from Mr Keskin of the Committee on Migration, Refugees and Population

Contribution from Baroness Hooper of the Committee on Culture, Science and Education (Doc. 11396)

Contribution from Mrs García Pastor of the Committee on the Environment, Agriculture and Local and Regional Affairs

Statement by Mr Gurría, Secretary-General of the OECD

Speakers:

Mr Greenway (United Kingdom)

Mrs Siniscalchi (Italy)

Mr Braun (Hungary)

Mr Dupraz (Switzerland)

Mr Kallio (Finland)

Mr Murata (Japan)

Mr Kelemen (Hungary)

Mr Balčytis (Lithuania)

Mr Tilson (Canada)

Mr Sasi (Finland)

Mr Jiménez Rumbo (Mexico)

Replies:

Mr Gurría (Secretary-General of the OECD)

Mrs Papadopoulos (Cyprus)

Draft resolution adopted unanimously

6. Political dimension of the Council of Europe budget

Presentation by Mr Wille of report of the Committee on Economic Affairs and Development (Doc. 11371)

Speakers:

Mr Kox (Netherlands)

Mrs Barnett (Germany)

Mr Van den Brande (Belgium)

Mr Eörsi (Hungary)

Mr Chope (United Kingdom)

Mr Mignon (France)

Mr Marquet (Monaco)

Mr Negele (Liechtenstein)

Mrs Papadopoulos (Cyprus)

Mr Rigoni (Italy)

Replies:

Mr Wille (Belgium)

Mr Vrettos (Greece)

Draft resolution adopted.

Draft recommendation adopted.

7. For a European convention on promoting public health policy in drug control

Presentation by Mr Flynn of the Report of the Social, Health and Family Affairs Committee (Doc. 11344)

Speakers:

Mr Waalkens (Netherlands)

Mr Hancock (United Kingdom)

Mr Boswell (United Kingdom)

Mr Van Herven (Netherlands)

Mr Marquet (Monaco)

Mr R Huseynov (Azerbaijan)

Mr Goldstein (Canada)

Replies:

Mr Flynn (United Kingdom)

Mrs Pernaska (Albania)

Draft resolution adopted.

Draft recommendation adopted.

8. Date, time and orders of the day of the next sitting