AA14CR32
AS (2014) CR 32
2014 ORDINARY SESSION
________________________
(Fourth part)
REPORT
Thirty-second sitting
Wednesday 1 October 2014 at 10 a.m.
In this report:
1. Speeches in English are reported in full.
2. Speeches in other languages are reported using the interpretation and are marked with an asterisk.
3. Speeches in German and Italian are reproduced in full in a separate document.
4. Corrections should be handed in at Room 1059A no later than 24 hours after the report has been circulated
The contents page for this sitting is given at the end of the report.
(Ms Brasseur, President of the Assembly, took the Chair at 10.05 a.m.)
THE PRESIDENT* – The sitting is open.
1. Changes in the membership of committees.
THE PRESIDENT* – Our initial business is to consider the changes proposed in the membership of committees. These are set out in document Commissions (2014) 07 Addendum 1.
Are the proposed changes in the membership of the Assembly’s committees agreed to?
They are agreed to.
2. The activities of the Organisation for Economic Co-operation and Development
(OECD) in 2013-14 (enlarged debate)
THE PRESIDENT* – The next item of business at this sitting is the enlarged debate on the activities of the OECD in 2013-14. This debate will take place under special rules which enable delegations from parliaments of OECD countries that are not members of the Council of Europe to participate, and we welcome the participation of our colleagues from Japan, the Republic of Korea and Chile.
May I remind the Assembly that at Monday morning’s sitting it was agreed that the speaking time for today’s debate be limited to three minutes.
In order to finish by 11.20 a.m., we shall interrupt the list of speakers at about 11.15 to allow time for Mr Gurría to comment briefly on the debate.
We begin with the statement by Mr Angel Gurría, Secretary-General of the Organisation for Economic Co-operation and Development.
It is a great pleasure to welcome you, Mr Gurría, to our Assembly once again. You are a faithful supporter of the Council of Europe: this is the ninth time you have visited us, and I thank you very much for doing so. This year, we have a new procedure. We have decided not to have a report but simply to listen to you, hear your views and then to have a free debate.
Of course, we have contacts with the OECD through the Parliamentary Assembly committees, which adds value for our members and for the Assembly as a whole. It is important for us to identify the most appropriate means of co-operating together in future. I was fortunate to have a brief meeting with you this morning in my office, and you handed me a very important set of documents that your organisation has just published. I recommend them to all our members, and that they read all the OECD’s various publications and discuss them in their national parliaments. They are a mine of important information on various subjects, but I shall not go into the details because you will do that and explain the background to your work.
I am more than happy, Mr Gurría, to give you the floor; we are very much looking forward to hearing from you.
Mr GURRÍA (Secretary-General of the Organisation for Economic Co-operation and Development) – I am delighted to be reporting to your Assembly today on the OECD’s latest activities.
Let me start by congratulating you on the 65th anniversary of the Parliamentary Assembly of the Council of Europe. It is an important birthday, and I thank you all for your hospitality today.
As Madam President said, this debate is a regular appointment, and one that I deeply cherish. It is an opportunity to share with you information about not only the state of the OECD itself, but about the many issues in which we are involved, which we help to document, and for which we help to propose public policies.
We have just made our interim economic assessment. It is not a pretty view. In the back are all the differences between our projections from last May and this September. In just four months, a long list of negative numbers has appeared. We downgraded the growth of practically every large economy in the world, with the exception of India, which is looking a little better, and China, which is more or less holding steady. In practically every other large economy in the world, we are looking at a downgrade in growth.
What are the legacies of the crisis? We have slow growth, which we are looking at. We have high unemployment. As we speak, unemployment is growing in some parts of the world, including the euro area. We have growing inequalities. Inequality has never been as high as it is today. We also have a serious destruction of trust and confidence in the institutions that we have built over the past century. I am talking about parliaments, political parties, prime ministers, presidents, ministers, international organisations, banking systems and multinationals—all the institutions that we have built. There has been a great erosion of trust. There is a great cynicism and people have thick skins; they ask all the time whether things will solve their individual problems.
The United States of America is looking a little better than the rest. There are great challenges in Japan after 15 years of deflation, with their so-called “three arrows”, but there are high accumulated levels of debt. There is second quarter negative growth in Germany, negative growth in Italy and flat growth in France. In the euro area, the photo offers quite a sombre view. The movie will get better, but very slowly, for the rest of this year and next year. I thank Ms Bakoyannis and Mr Elzinga, who hosted us for dinner last night.
There are 45 million unemployed in the OECD itself, which is 12 million more than before the crisis, even after some recovery. There are 202 million unemployed people across the world—that figure represents those who can be counted, because in such countries as India, Mexico or Brazil informality is so widespread that it is difficult to count unemployment.
I mentioned inequality. How bad is inequality? It is nine and a half times. Nine and a half times what? The income of the poorest 10% in the OECD can fit nine and a half times into the income of the richest 10%. So what? Is that big or small? Well, a generation ago it could fit six times. That means we are going in the wrong direction fast. Also, nine and a half times is an average. In the United States of America, it is 14 or 15. In countries such as Mexico and Chile, it is 25 or 26. In Brazil, it is 50. In some African countries, it is 100 times. Inequality is growing. There is nothing like a good crisis to increase inequality, and we had a very good crisis indeed—as good as they get. Inequality is a big problem.
On the question of trust in institutions, they say that only 40% of our people believe in the institutions. That number is falling, because we are not able to deliver the things that citizens need.
Let me tell you what we are doing at the OECD. We are trying to address these issues by looking at ourselves in the mirror naked. Of course, we do not like what we see very much, because we think we can do better for our members and for all of you. We are taking a hard look at how we address issues, how we program and plan, how we model and how we take social affairs into account. We have to take social aspects into account more. Social issues affect growth, and the lack of attention given to them will eventually come back to haunt us.
There are too many things to take care of; it is like a juggling act. We have to consolidate the budget, reduce the deficits and be careful that we do not kill growth, while at the same time being careful that we take care of the more vulnerable, the victims of the crisis, the young, women, children and so on. We also have to be careful to continue to promote investment going forward. We have to take care of a lot of things at the same time, and sometimes they are contradictory, and that is why we are in such a difficult situation today. We particularly need to focus on the question of skills, and not just education. That is critical. On the labour market, we need activation policies, but the improvement of skills requires a mix of education, labour market involvement, training and continuous learning and so on. Through that, a work force can be created that is fit for the demands of the market today. We are generating millions of young people with diplomas that do not serve any particular purpose. There are also total and complete misallocations of resources. In some countries of the OECD, some people in universities are less fit for the market than those who finish a secondary degree. It is such a distorted education and vocational training system.
We also have to take a look at what we have done—we are very proud of this—to decode the trade genome. Just like when we decoded the human genome, we have decoded the trade genome. We decoded it and we broke the global value chains equation. Then we produced information about how to express the trade in value-added terms, not in nominal terms any more. We have fascinating results. For example, China’s surplus with the United States of America falls by more than one third if you express it in value-added. Last but not least, we have put out a blueprint about services for all our countries. Services are of course critical; they represent 75% of the economies of the developed world. That is a very important power and we should follow up on it.
We have to get back to the fight for the environment and against climate change. Last week I was in New York, where we had several sessions on that. It is just the beginning of a new push. The crisis made us distracted. It has been used as a excuse to say, “Mr Gurría – come on! Green growth – what are you talking about? Give me growth of any colour – yellow, black, maroon, chequered, striped, whatever it is, any growth. And green jobs are a luxury we cannot afford.” That is the wrong answer. We are on a collision course with nature, and if we do not correct it we are going to suffer enormous economic and financial consequences. We must therefore correct the course and take another look at this, regardless of the triple dip or the recession that there may be in some countries, or the slow growth that there is generally in the world economy today.
Let me tell you a little bit about work we are very proud of that I delivered recently – last week, actually – in Cairns in Australia to the Finance Ministers of the G20: it was the final template on going for automatic exchange of information on tax issues. Starting in 2017, if an individual creates an account in any country – a third country – the bank will report it to the authorities and the authorities will report it to that citizen’s country of origin, so that there will be no place to hide and no way to avoid the taxman. But this is about individuals and companies. How about the multinationals that do not pay taxes at all because they do double-Dutch or double-Irish, or go to the Caribbean, or this or that? We have seen a lot of inversions in the United States United States of America, where Pfizer was going to buy AstraZeneca in order to pay 10% less taxes in the United Kingdom because it has lower taxes than the United States of America. That was a complete engineering of the system in order to avoid tax payments.
We have just delivered the first seven chapters of the report on BEPS – base erosion and profit shifting – and the new campaign to fight that. There are copies over there; I gave one to Mr Jagland. We will deliver the last eight chapters next year and take it from there as we change the structure of how the multinationals pay taxes throughout the whole world. There is one thing that has made China, India, South Africa, Brazil, the United States of America, Germany, Turkey, and so on come together in support of this work: we all need the money; we are all short of it.
There is another question regarding the destruction of trust. If people see that rich individuals do not pay taxes because they go to tax havens, that large multinationals do not pay taxes, and that we are left only with the middle class and small and medium-sized enterprises captive within the confines of a particular country as the only ones who are taxed, then obviously we have a further destruction of trust and a greater frustration on the part of those people – and of course this has political consequences, not just economic and social consequences.
President Brasseur, ladies and gentlemen, I hope that this quick overview of some of our key contributions to a better world has captured your attention. This year, as we heard, there is no rapporteur. Normally the rapporteurs would be sitting over there. I am sorry that I do not see the usual suspects here. I hope that this way of doing the report will not produce a lack of engagement by the Parliamentary Assembly of the Council of Europe. We are willing to do it any way you want. It was your proposal that we do the report this year; next year you will do it again. We will do it in any way you think is most useful. We have already had discussions with the Sub-Committee on relations with the OECD and the EBRD, and we are willing to entertain any kind of dialogue that you may wish to have.
Last but not least, Madam President, you alluded to the fact that I am a regular here. Let me just say that, for us, this is one of the highlights of the year. We are delighted, honoured, very flattered, and ready to take your comments, your questions, or even your violent objections. Thank you very much.
THE PRESIDENT – Thank you very much, Secretary General. You said that this is always a highlight for you; I must tell you that it is also a highlight for us. It is so important that we get not only your information but the way in which you manage to give it to us. I only regret that we do not have more time to listen to you, but now we come to contributions from our Members, so we will see how the debate progresses. In any case, thank you very much, Mr Gurría. The first speaker on the list is Mr Prescott from the United Kingdom.
Mr PRESCOTT (United Kingdom) – Mr Gurría, you gave us an excellent and realistic statement about what is happening to the global economy. We might find the negative aspects hard to digest, but they are realistic. I welcome the fact that you talk about the avoidance of tax bills. Those are the things that we in the Socialist Group are very keen to debate here in this Assembly, and we have tabled a motion to do so.
However, I want to concentrate on another aspect in the limited time that we have – the climate change negotiations that are under way. If anything is going to affect a global economy, it is how we settle on an agreement by the time of the Paris conference next year – in 15 months’ time – as we try to find a global solution to a global problem. I suggest that unless we find a solution to the challenge of global change, next time you will have a far worse report to give us in this Chamber on global growth and its consequences.
I was one of the negotiators at the 1997 Kyoto agreement, where we reached an agreement for only 46 countries – the industrial ones – and placed it within a legal framework. That has now become one of the problems for the agreement, as Ban Ki-Moon pointed out when he said that he needs an agreement in 15 months’ time at the Conference of the Parties in Paris. The next one is in Peru, and I hope to attend it.
We have to find some compromise. The reality is that Russia and China have now got together to reach an international agreement without a legal framework. Why? Because President Obama cannot get any agreement through Congress, so he has to offer presidential powers. The important point is that he cannot agree on an international agreement. Many countries – the 196 that we have in the next agreement – cannot agree a legal framework unless the Americans do. America and China are the two biggest emitters, with a consequential effect on climate change, and they have now come to an agreement. The sticking point is the European Union. It is still sticking to an idea that there has to be an international legal framework, but it will not be possible to get all those nations to agree on that. Even America clearly cannot do so, and nor can others. If we proceed to find a Kyoto framework that insists on a legal framework internationally – I stress “internationally” – then we will fail, and the consequences for the global economy will be enormous. Therefore, we have to do this by Paris.
The Council of Europe passed a resolution in June 2014 called, “Climate Change: a framework for a global agreement in 2015”, suggesting a compromise – that the legal agreements be done domestically and the global carbon targets globally and that an international body be set up to carry this out and review the criteria for successful climate change action. I will send you the document, Mr Gurría, and perhaps you can put it to the OECD members and ask them to start thinking about this agreement.
THE PRESIDENT –Thank you, Mr Prescott. I call Mr Sasi to speak on behalf of the Group of the European People's Party.
Mr SASI (Finland) – I welcome Mr Gurría’s speech and his analysis. The main problem in Europe is growing debt. We read in today’s Figaro that French debt is now about €2 000 billion and growing uncontrollably. We have had this problem since 2008 and we have to do something to stop it. We could do this through higher economic growth or with austerity measures. Higher growth will be difficult to achieve, although you rightly mentioned skills and education, Mr Gurría. However, in coming years, growth in Europe will be slow; our economy is still very shaky. The European Central Bank has put enormous liquidity into the market. Furthermore, interest rates are very low, but they will rise at some point, meaning slower growth when it happens – in fact, there could be a bubble, and if it bursts, we will have big problems. I hope the ECB will be able to control the situation.
The OECD should go through States’ obligations and categorise those core duties that are necessary for every society – health care, for example – and those that are merely useful or joyful. Once we have this categorisation, it will be much easier for politicians to say, “This we keep, but this we can leave, and it can be arranged some other way”. That is how to put an end to uncontrollable debt. In making this categorisation, however, we must consider human rights and other core values. They must be the basis of the categorisation.
On the euro, we can no longer devalue, so we must use other means. The only option is internal devaluation – lower salaries and lower expenditure – carried out in a socially fair way. That is the great task facing Europe, and we need your analysis and knowledge, Mr Gurría, so that next time we have these problems, we have in place an organised system to ensure our competitiveness in world markets.
Finally, Europe has very good social security. In this Organisation, we speak of rights, but we should also speak of obligations. When we guarantee people social security, they should have obligations towards society as well. When someone gets money, they should be obliged to be somehow employed and of benefit to society. With your input, Mr Gurría, that is the way to guarantee the social welfare State.
(Ms Kramar, Vice-President of the Assembly, took the Chair in place of Ms Brasseur.)
THE PRESIDENT – Thank you. I call Mr David Davies to speak on behalf of the European Democrat Group.
Mr David DAVIES (United Kingdom) – Thank you, Madam President.
I am very concerned that the current hysteria about climate change is leading to damaging economic policies made on the basis of a mistaken analysis. The science around climate change is far from settled. The theory is that we have pumped a certain amount of CO2 into the atmosphere since the industrial revolution, which is true; that temperatures have risen by 0.8 degrees, which is true; that CO2 is a greenhouse gas, which is perfectly true; and that, therefore, the CO2 we have put into the atmosphere has caused the 0.8 degrees rise, which is not true or scientifically proven. Not even the Intergovernmental Panel on Climate Change is prepared to make that case.
It is obvious, when one looks at the science, that many other factors are affecting the current climate. For example, there is no correlation between the increase in CO2 and the increase in temperatures. Between 1940 and 1970, temperatures actually fell, despite the fact that vast amounts were being pumped into the atmosphere, and since 1988, there has been a pause – no climate change and no increase in temperatures whatsoever – so clearly something else is affecting temperatures. The IPCC report says it thinks that most of the increase in the second half of the 20th century is down to climate change. Well, that amounts to about 0.2 or 0.25 degrees, which is well within the margin of error anyway. And for this, we are conducting all sorts of economic policies that are damaging to our industries and damaging to households, because they drive up bills.
Your report, sir, says that climate change could lower GDP by between 0.7% and 2.5% by 2060, but that is not what the IPCC says. It says it could have an impact of 0.2% to 2% by the end of this century, but, with the greatest of respect, you do not say, sir – and you are an economist – that this is based on the world being very much richer. The higher figures for temperature increase are based on the fact that the whole world – Africa, China and so on – will have modernised and industrialised and so will be burning much more CO2, but will be very much richer. I do not know whether your figure – I do not know where you get it from – or the IPPC’s is right, but let us take the figure of 2.5%. That would be in a world immeasurably richer. However, today we are conducting policies that are driving our manufacturing industries from western Europe, and it is taking its jobs and potential growth to other parts of the world, so we are not even doing anything to reduce carbon emissions or to stop a problem we might not even have. We are just destroying jobs and driving up prices.
What annoys me most is the hypocrisy of those green groups who call on us to adopt these policies and then dissociate themselves from the rising costs of energy for homeowners and the loss of jobs for people in manufacturing industries. I urge you, sir, to look at what the IPCC says and to think again. This is a damaging mistake.
THE PRESIDENT – Thank you. I call Mr Pasquier to speak on behalf of the Alliance of Liberals and Democrats for Europe.
Mr PASQUIER (Monaco) – I thank Mr Gurría for an excellent speech, which focused on the right issues. As the OECD report acknowledges, the central issue is how to accelerate economic growth in a way that is inclusive and sustainable. It is the inclusive side that worries me the most. Recent economic findings and data show that the benefits of growth are accruing to an ever smaller share of the population. I am not talking about the richest 20%, but about the richest 1%, or even the richest 0.1%. Thomas Piketty, in his book, “Capital in the 21st Century”, argues that we are in a period of unprecedented concentration of wealth. This phenomenon seems to be global – it is true in China, in the United States of America, in Europe. For how long is this sustainable? What is the point of growth if it accrues only to a tiny share of the population?
This matters politically because people are losing faith in the system and moving to populism and a more extreme political position – or even worse – particularly in Europe. The Assembly has been discussing a report called, “Counteraction to the manifestations of neo-Nazism”. Part of the solution is to prevent people from reaching a state of hopelessness in the first place.
I realise fully that there is no easy solution. I respectfully suggest, Mr Gurría, that the OECD should allocate even more resources to trying to understand this phenomenon and develop economic policy recommendations to ensure that all people benefit from economic growth. The problem will not go away, and the consequences of failing to come to grips with it are scary.
THE PRESIDENT – Thank you. I call Mr Elzinga on behalf of the Group of the Unified European Left.
Mr ELZINGA (Netherlands) – As rapporteur on the OECD, I welcome our overseas delegates. I also welcome Mr Gurría and thank him for his introduction to the debate and for the report provided by the OECD to inform it. As rapporteur, I look forward to providing you all with follow-up on this debate next year. I am pleased that we have all witnessed from Mr Gurría’s address that the OECD takes this annual debate very seriously and follows our recommendations closely, especially as the negative social consequences of the financial and economic crisis are still so overwhelmingly present in our own countries.
Economic recovery is feeble; in some of our countries, economists now warn of a triple dip. Where recovery is occurring, it has hardly delivered so far in terms of inclusiveness and fair distribution. Therefore, it is very satisfying indeed that the OECD has put a lot of emphasis on stimulating inclusive growth and green jobs, tackling inequality, combating poverty and developing skills and new sources of growth.
As rapporteur, I will obviously follow closely delivery on the New Approaches to Economic Challenges initiative and on mainstreaming those new approaches within and throughout the OECD. We must ensure that we do not make the same mistakes by following OECD policy advice that is beneficial for one country and in the short run, but proves to be a risk in the long run and contributes to financial and economic imbalances between countries, as we pointed out in this Assembly some years ago when reflecting on the root causes of the financial crisis.
I will also follow closely the delivery on the BEPS initiative, as base erosion and profit shifting by multinationals must be targeted in order for them to contribute their fair share to taxation so as to restore trust in the tax system, raise the means for reinvestment in public infrastructure and strengthen social and economic human rights.
To address an urgent issue, the negotiation of new regional trade agreements is occurring on an entirely new scale, as the OECD puts it. These new agreements move well beyond existing multilateral trade agreements, seeking deep and comprehensive market integration, targeting “behind the border” regulations — or national laws and regulations, as we saw them when we as parliamentarians agreed to them.
I ask Mr Gurría to reflect on three main concerns. The first is the secrecy of the negotiations. For example, we would have known nothing of the trade in services agreement if not for Wikileaks. The negotiations on TTP, TTIP, CETA and RCEP are also far from transparent. How will we avoid corporate capture of the trade agenda and open up a political process to ensure that all stakeholders are heard and social and environmental safeguards and objectives are given the same weight as economic interests? How will we avoid a race to the bottom if we aim for mutual recognition of our sometimes widely diverging standards, for example in TTIP? We know, for example, that United States of America business explicitly mentions European labour law as a non-tariff barrier to trade.
Last but not least, why would we even consider an investor-to-State dispute settlement in CETA and TTIP as a way for multinationals to bypass national judges? Why can we trust each other’s regulations but not each other’s legal systems?
THE PRESIDENT – Thank you. I call Mr Geraint Davies.
He is not here, so I call Mr Beneyto.
Mr BENEYTO (Spain)* – I cordially thank the Secretary-General of the OECD for being here. It is always a pleasure to hear his clear sense of humour and his thoughts on the prospects for the future and the work of the OECD. I also thank the parliamentarians here from OECD observer countries – Mexico, Japan, Korea and Chile – who will intervene later.
The OECD report contains many new aspects. For example, it refers to New Approaches to Economic Challenges, which need to be explained further. What are the instruments for addressing the economic challenges that we face? The OECD’s analysis is very valid. Inequalities are increasing, especially in western countries, and citizens lack interest in what governments are doing and what decisions must be made to improve the economic situation. There is a lack of confidence in institutions; more confidence in government needs to be created to resolve these problems. We are in a serious situation.
However, as the report states, there are opportunities and possibilities. I point out – this is no model, but it is certain – that three years ago my country was on the brink of a precipice, and now Spain will have 2% growth next year. Things are on the rise. Exports are at a historic level and the structural reforms that we undertook are already having positive effects. The labour market is growing by 300 000 people a year. How, given our complicated situation, did we manage tripartite reforms – monetary, fiscal policy and structural reforms?
Reforms should be pursued in Europe. It is not enough just to have fiscal consolidation or necessary conditions. What is missing is an ensemble of measures. The report indicates many other possibilities, including a better use of global value-added in trade and other aspects, such as education. Here I ask the Secretary-General about the OECD indexes. They are very useful, but they over-emphasise research. Research is not the only job that universities do. My second question would have related to the aspects that I just mentioned.
THE PRESIDENT – Thank you. I call Mr Miyazawa, Member of Parliament of an OECD member State.
Mr MIYAZAWA (Japan)* – My uncle, Kiichi Miyazawa, represented Japan in 1962 as the director general of the Economic Planning Agency and became Prime Minister two years later in 1964, when Japan became a member of the OECD. Japan chaired the OECD Ministerial Council Meeting for the first time 36 years ago. At that time, Kiichi Miyazawa also served as chairman. Japan again chaired the MCM this year. I am deeply honoured to participate in today’s debate in the presence of Secretary-General Gurría during this milestone year.
Last month, the OECD Tohoku School successfully revived the Tohoku festival in Japan. The OECD Tohoku School is a project for showcasing the recovery of education after the great east Japan earthquake. I also heard that cherry trees from Tohoku region were planted at OECD headquarters, and that Secretary-General Gurría attended the ceremony. I would like to express my deepest gratitude to the OECD for its warm support. I am confident that the children who benefit from the project will grow up to play key roles in Japan’s recovery and revitalisation.
In addition to speeding recovery from the east Japan earthquake, Japan is pursuing a package of economic and fiscal policies, known as Abenomics, aimed at ending deflation. With those programmes in mind, Japan proposed that resilient economies be the theme of the recent Ministerial Council Meeting. The council statement contained various elements of Japan’s growth strategy. That MCM involved the launch of the southeast Asia regional programme, which we hope will strengthen ties between the OECD and the fast-growing economies of southeast Asia. I would like to take this opportunity to express our gratitude to all parties.
Finally, I would like to comment on the base erosion and profit shifting initiative. After the G20 meeting held last month, the OECD presented part 1 of its report on the BEPS action plan, including measures for strengthening transfer pricing and taxation. Developing effective measures to combat international tax avoidance is an urgent issue. We therefore greatly appreciate the steady progress made by the OECD on this matter.
At home, I am a key member of the Tax System Research Council of the Liberal Democratic Party. This council in effect determines the course of Japan’s tax system. In closing, I would like to state as a member of this council that I am prepared to spare no effort in co-operating to ensure the confidence of taxpayers in the tax system. Thank you.
THE PRESIDENT – I now call Mr Mendes Bota to the floor.
Mr MENDES BOTA (Portugal) – Mr Gurría, I would like to hear your comments on the following questions. The first is about public investment in infrastructure. At the global level, as your report itself admits, economic growth has contradictory signs. The United States of America is growing strongly, Japan is expected to pick up speed shortly, but the euro area is not booming in the creation of jobs and the stimulation of investment. Additionally, some emerging economies such as Brazil are facing a slow-down in growth and increasingly worrying levels of public debt. Deflation is a risk. Stagnation does not help to combat high unemployment, and the effects of the financial crisis are still a threat to economic recovery.
Do you consider, as the IMF surprisingly appeared recently to defend, that in such an environment of slow growth, this is the time to relaunch public investment in infrastructure as a way of stimulating the economy and as an alternative to strict and prudential budgetary policies that have brought austerity measures in many of the European States? Is this the time for that additional effort? Loan interest rates are low, demand is weak in the advanced economies, and there are still many barriers at the level of the infrastructure in emerging and developing economies.
The question is: is the positive effect of public investment on the economy able to compensate the level of indebtedness that States have to face? What kind of public investment should it be? Are there limits to recommending public investment based on debt? Will European countries fear negative reactions from the financial markets regarding uncontrolled growth in the cost of financing and additional pressure over the public debt?
We still remember how public investment grew in the 1990s, only to slow down after the deficit Maastricht criteria in 2002. But we also sadly remember how the option for public-private partnerships to build infrastructure, mainly in transport networks and the health system, served first to limit or disguise the budgetary impacts of that kind of investment, but resulted in long-term negative impacts that were quite significant in some European States such as Portugal, Spain, Greece, Italy or Ireland, just to mention a few.
On the subject of partnerships, how do you see the Transatlantic Trade and Investment Partnership, which is being negotiated between the European Union and the United States of America, contributing to stimulating the world's economic growth and creating new jobs? Or will it, as some people say, increase big corporate power and make it more difficult for governments to regulate markets for public jobs?
The current main problem at the top of the list in our societies is no longer the economic crisis but what you call in your report “the citizen’s sense of unfairness concerning the distribution of the costs of the crisis”. So my final question to you, Mr Gurría, is: can we trust the OECD trust strategy?
THE PRESIDENT – Thank you very much. I call Mr Heer.
Mr HEER (Switzerland) – Thank you Madam President, and thank you Mr Gurría for your presentation of what you are doing.
I have a question for you regarding the automatic exchange of information, as suggested by the OECD. We Swiss have been targeted by the OECD with a blacklist and so on because we did not want to introduce automatic information exchange. There has been a change on the part of the Swiss Government and by the Parliament, and we are on the way to granting automatic information exchange.
However, I am surprised, as a Swiss citizen and because Switzerland is a member of the OECD, that we do not have a level playing for all countries. This means that the United States of America does not have automatic information exchange, which you requested that all countries have. It still has trust organisations and trust companies where the identification of the holder of values is not clear. It has exemptions for Delaware and Nevada, which is in no way correct. I do not think it is appropriate, if we are talking about justice and equality, to have one big country such as the United States of America that has special rules that it can take advantage of as a banking and tax-hiding place. The United States will also not give information to countries in South America if they want to know who has money in, for example, Miami.
I urge you as the Secretary-General of the OECD, if you really want to stop tax evasion and to have automatic exchange of information, to ensure that every country takes part in it, be it a small country or a big one. It would be no more than equal and just if the United States of America also complied fully with the OECD regulations as every other country must do. Thank you very much.
THE PRESIDENT – Thank you. I now call Mr Lee.
Mr LEE (Republic of Korea)* – Good morning. First, I extend my deepest thanks to you for inviting me to the Chamber, and I would like to present my congratulations on the work of the Committee on Political Affairs and Democracy and of the Parliamentary Assembly of the Council of Europe.
Because of the time limit, I would like to talk about inclusive growth. Since the economic crisis, inequality is deepening everywhere in the world, and I fully agree with the OECD on this point. As was mentioned in the report, a sound fiscal stance is also very important, so help should be given as a priority to the weakest part of the population. We need a new approach that is demand-oriented, so we need to provide livelihood support particularly in housing, employment, education and health.
As the report mentioned, inclusive growth should target the youth, women, children and the elderly, who are excluded from the present labour market. This is a very important task. In order to achieve this, we need to develop new technological and training strategies. It is very meaningful that the OECD is developing these new strategies, and Korea’s intention is to participate actively in the work of the OECD.
The OECD places importance on the reform of public pensions, so we need to find equilibrium between a sound fiscal stance and an adequate income level for retirees. We therefore need to find a way of providing retirees with adequate income while maintaining a sound stance on the public budget.
Lastly, the Council of Europe, too, needs to give its continued support to the OECD so that its efforts are fruitful.
(Ms Brasseur, President of the Assembly, took the chair in place of Ms Kramar.)
THE PRESIDENT – Thank you very much. The next speaker is Mr Van der Maelen from Belgium.
Mr Van der MAELEN (Belgium) – Dear colleagues, Mr Secretary General, thank you very much for your excellent report. As the previous rapporteur on a report last year on the activities of the OECD, I should like to touch on two themes: first, new approaches to economic challenges (NAEC) and, secondly, base erosion and profit sharing.
On NAEC, I am pleased with the expressed desire to measure growth in a more inclusive way, but I cannot help feeling somewhat disappointed with the OECD’s evaluation of the trade-off between public investment and fiscal consolidation during the crisis. In my view, the OECD takes an over-cautious approach, calling government stabilisation measures “well-placed”, yet dangerous, because they worsen the fiscal imbalance. I underline that this position stands in sharp contrast to the views of many well-respected economics.
A representative sample of American economists overwhelmingly stated that employment and the overall benefit of the American Recovery and Reinvestment Act of 2009 in the United States of America outweighed the costs. In my own country, Professor Paul De Grauwe from the London School of Economics argued that structural rigidities cannot have caused the lower growth in the eurozone from 2011 on. If this was the case, they should also have prevented the temporary recovery of 2010. His conclusion is clear: the only factor that can explain this second dip and the threat of a third dip is austerity.
As a consequence of the policy advice we in Europe were given by different institutions, among them the OECD, the eurozone recovery is slower than that of the sterling bloc during the great depression or that of Japan during its lost decade. Caution, dear colleagues, is not always a virtue.
On the second topic, I start to agree with the Secretary-General about what he and the OECD achieved in respect of automatic exchange of information. This is historical progress.
On BEPS, progress is being made, but it is much slower than I hoped for. As you know, Mr Secretary-General, I was from the start, and I still am, concerned that the OECD’s patch-up approach will only result in much more complex rules and arrangements that will require careful co-ordination to be effective. I am afraid that the new rules will provide new opportunities for so-called tax planning.
I have one practical proposal to make you. Please, let us keep track of indicators reflecting how effective proposed measures really are in tackling tax avoidance by multinational enterprises. I always say, like my British friends, that the proof of the pudding is in the eating. I will believe the OECD’s approach after first seeing the results. I have my doubts.
THE PRESIDENT* – Thank you. I now give the floor to Ms Zimmermann.
Ms ZIMMERMANN (France)* – Thank you very much, President, and thank you, Secretary-General.
The economic crisis that we are currently experiencing highlights particularly the interdependence between politics and the economy. The situation is serious and, unfortunately, some things we spoke out against some years ago are still here today; I mean by this the legitimacy given to markets and rating agencies who decide on the economic governance of a State.
Your report is finally showing a will to regard people as more important. This comes after several years of IMF policies imposed without any consideration of the social consequences and the democratic consequences thereof. This is a good thing and we should be pleased that the recommendations drafted by our Assembly can cause the OECD’s way of thinking to change. However, we cannot fail to notice that in reality the three ratings agencies, which have a monopoly position, are continuing, through improper ratings, to dictate the economic policies of countries, instead of this being done by representatives who have been elected by their citizens.
We can, of course, regret that the banks are imposing restrictive loan policies for individuals and businesses and are not properly playing the role they should. A better banking regulatory system should enable more effective support to be given to investment, for creating businesses or accessing property. Interdependences between the financial economy and the real economy should be completely re-thought.
Progress has been highlighted in your report, but we need to go much further than that. By putting people back at the heart of the economic system, we will enable much more substantial growth in terms of employment and financial gain. This is why, Secretary-General, I hope that the OECD, above and beyond its findings, will be able to provide advice on methods of economic regulation that foster the creation of manufacturing companies, because it is these companies that are behind the creation of jobs. For this we need to provide the means to invest and innovate. Although you mention this in your preliminary remarks, your report does not cover in any great detail studies on the effectiveness of education and training,. We had a substantial debate yesterday on this topic and I think that we can provide some input and food for thought to the OECD on this matter.
I also took note of the notion of trust in your report. France has been in the vanguard of information sharing, especially fiscal information. This measure is a result of political will and the results recently announced in terms of cooperation between our country and Switzerland prove that, when politics has a say in the economic sphere, positive solutions for the economy can be found.
Secretary-General, as a parliamentarian I think that politics should steer the economy, not the reverse. Interesting avenues have been identified in your report. I really hope that these positive avenues are improved and accentuated in the years to come in the OECD’s work, by putting people at the heart of things again. Thank you.
THE PRESIDENT* – Thank you very much, Ms Zimmerman.
I call Mr Dişli.
Mr DİŞLİ (Turkey) – Thank you, President.
This is a great opportunity to hear the assessments of Secretary-General Gurria on the OECD and the world economy.
Turkey is among the founding members of the OECD and we attach particular importance to the organisation. In order to support the OECD’s policies, as well as the reform efforts of partners in various areas, we made a proposal to the Secretariat to establish an OECD competitiveness centre in Istanbul, for which we ask you for your support.
Today, when we examine the global economy, we can still feel the negative consequences of the biggest financial crisis of the last 50 years. But hopefully, as was stated, it is possible to say that these negativities are declining, since the worst and deepest point of the crisis is over and globally a measurable recovery can be observed.
The main fear is the geopolitical situation in various parts of the Middle East and the tension between Russia and Ukraine.
Turkey’s GDP has reached about $820 billion and the growth was mainly export-oriented. Our exports increased from $35 billion to $135 billion. Since 2009 we were able to increase employment; our debt to GDP ratio decreased; much of the growth comes from exports; and our exports are increasing as European markets continue to recover. Turkey is playing a key role in Europe’s energy supply security, and will continue to do so.
Finally, starting from 1 December this year, Turkey will have the presidency of the G20 and we are going to host many meetings in our country, including the G20 summit in Istanbul. I believe that this series of events will be an opportunity to share and obtain examples of good economic governance with member countries.
Thank you.
THE PRESIDENT – Thank you. The next speaker is Mr Hanson.
Mr HANSON (Estonia) – Thank you, Madam President. I welcome the Secretary-General and thank him for his inspiring and excellent speech.
Estonia values the criteria of its membership of the Organisation for Economic Co-operation and Development—a free market economy and the principles of rule of law, democracy and respect for human rights—which means better policies for better lives. That is why Estonia supports the organisation’s enlargement process. What can be better than a bigger family sharing the same values? We appreciate the fast progress that Latvia has made in the process of joining the OECD. Estonia also strongly supports Lithuania’s candidature. Both countries have excellent experience of managing an economic crisis and coming out of it elegantly and quickly.
One member of the Council of Europe badly needs the strong support of the international community in order to strengthen the stable development of democratic reforms. Yes, that member State is Ukraine. Ukraine’s sovereignty and territorial integrity were brutally violated by Russia. The OECD, which has long experience of fighting corruption and building democratic institutions, could be of valuable help to Ukraine. OECD experts could guide Ukraine in its endeavour to get its economic development back on track. Economic advice from OECD experts could help to restore trust in the Ukrainian economy.
We support the OECD’s decision to suspend membership negotiations with Russia and to allow the latter to participate only in activities on a technical level. For Russia to restart the negotiations, it must ensure the restoration of Ukraine’s territorial integrity and quit the illegal control of Ukrainian territory. Estonia appreciates the OECD’s “New Approaches to Economic Challenges” project, which pursues new solutions for bringing the world economy out of crisis.
THE PRESIDENT – Thank you. The next speaker is Mr Larios Córdova, an observer from Mexico.
Mr LARIOS CÓRDOVA (Mexico)* – Thank you, Madam President. I congratulate Secretary-General Gurría on his comprehensive report. Throughout its 66 years of existence, the OECD has been a positive influence not only on its member States but on many other countries. Like previous speakers, I recall the basic principles and values that underpin the political work of the OECD—the development of democracy, respect for law and human rights and a belief in the free market, with the State only regulating distortions. Departure from those principles is the reason for many of the crises that we have seen.
Mexico has effected deep structural reforms in recent years. Some of those reforms are perfectly consistent with the policies suggested by the OECD. We have carried out education reforms. Education is important to the OECD, and we are second bottom of the OECD’s league table. We have done much to develop the teaching profession and to ensure that it is autonomous from the government and the teaching unions. We hope that will be a long-term reform.
Mexico is making major moves to regulate the markets to ensure competition. The most important reforms involve overcoming the exploitation of energy—oil and electricity—which was State owned for many years. Private companies now work alongside a public energy and oil company. We have also reformed the telecommunications sector and many other areas.
I thank the OECD for its support on many issues, for its suggestions on public policy and for helping us to address the four main challenges that we now face. We need to address income inequalities, as we have large discrepancies. We need to develop public policies, as our fiscal policies are currently inadequate. We are also developing new tools to combat corruption, on which we have been supported by the OECD. The implementation of the reforms requires a legal framework, and we welcome the OECD’s support. Finally, for 16 years we have been investing in capacity building through programmes focused on subsidies to provide proper opportunities. Now, we need policies to ensure that the millions of Mexicans who have already improved their skills can enter the labour market. We must address those issues or our efforts will have been in vain.
THE PRESIDENT – Thank you. The next speaker is Mr Zingeris.
Mr ZINGERIS (Lithuania) – I thank Secretary-General Gurría for his report. The OECD is an indispensible part of the European and global institutional architecture. Before this distinguished audience I reiterate my country’s aim of OECD membership. We offer more than potential, as we bring a real history of achievement, be it political change, fiscal consolidation, economic reform or regional co-operation.
Since independence 25 years ago, my country has been on a road of transition to democracy and a market economy. When we started, the economy was in ruins with no pension system and no institutions. This year, we celebrated 10 years of NATO and European Union membership. On the human development index we rank 35th out of 187 countries, which means we are among the countries with very high human development. Lithuania will adopt the euro in January 2015. This year our GDP will grow by 3%, having been revised down from 3.3% because of retaliation following the Russian embargo. Nevertheless, Lithuania will remain among the European Union’s most dynamic economies. Domestic demand remains the main driver of growth, whereas exports are slow, mainly due to the increased uncertainty related to the region’s geopolitical instability, fear of Russian sanctions and the slower than expected growth of our main trading partners.
Lithuania can learn a lot from the experience of the OECD and its member States. Lithuania achieved fiscal consolidation in a short time without outside assistance. Our productivity has significantly increased, and we have bounced back to growth. Our GDP per capita is now higher than before the financial crisis of 2008. Incomes are increasing. In his visit to Lithuania last week, the president of the European Central Bank, Mario Draghi, said that Lithuania is an example of growth and friendly consolidation. In other words, Lithuania has shown that it is possible to control government spending and debt in the face of a steep economic decline, and ultimately to return to growth without social unrest or loss of domestic trust.
Another value that Lithuania brings to the OECD is our record of regional co-operation, and our reform expertise could be of use to the OECD and its members. New geopolitical realities in eastern Europe increase the need for the OECD, with all its expertise, to play an active role in driving reform in the region. Lithuania’s expertise and experience in regional cooperation would be handy as well. Secretary-General, I congratulate you on your achievements as leader of the OECD.
THE PRESIDENT – Thank you, Mr Zingeris. I call Ms Anttila.
Ms ANTTILA (Finland) – I thank the Secretary-General for his interesting and splendid statement. The global outlook and the social and financial situation are worrying, especially in the euro area, because growth remains fragile and hesitant. Growth is stronger in the United States of America and Asia. The GDP potential of most OECD countries remains lower by some 6% – in some areas as much as 8% – than it would have been if the economic crisis had not occurred. Persistent low inflation and high unemployment in the euro area raise the risk of deflation and prolonged stagnation.
Secretary-General Gurría, how can we avoid the risk of deflation? How might we achieve new growth in the euro area? Some European Union countries have had enormous problems in their banking sectors and they have had budget deficits. Those difficulties have led to budget cuts and caused a lot of social problems. Growth has been better in Germany than in other areas. In Finland, we are suffering because the euro is too strong. Why does not the common monetary union take into account any sort of valuation of different currencies? We are suffering from those problems as well. The economic crisis has left deep scars in the labour market. Unemployment is too high; across OECD countries, 45 million people are still out of work, which is 12 million more than before the crisis. The most serious issue is very high unemployment among young people. It is unacceptable that in many countries, 40% to 50% of young people are jobless. Those jobless youngsters are our most important people, and they make our future. Secretary-General, how can we help those jobless young people?
THE PRESIDENT – Thank you, Ms Anttila. I call Mr Lorenzini Basso, observer from Chile.
Mr LORENZINI BASSO (Chile)* – Mr Miyazawa spoke to the Secretary-General about planting trees, and I would like to present him with a bottle of Chilean wine. I am sure that he will thank me. We have had a new government in Chile for the past six months and, like Mexico, we are undergoing structural reforms. Our country is in a period of transition. Growth has slowed from 6% to around 3%, and we have had problems with unemployment. That is bad news for us, although it might be good for other countries. Together with the OECD, the Chilean Congress is introducing a new law to reform taxation. The legislation will be worth some €7 billion a year, of which 25% will come from reducing evasion and avoidance. Introducing the law will be complicated, but we are going to do it. What are we going to do with that money? We are going to introduce a reform. To pick up on what our Mexican colleague said, the ratio that he mentioned is 1:25 in our country, and we want to correct that through education. Despite that, as the Chilean President said last night, in 2015 we expect a 10% increase, so we have to reactivate the country. It is not good to have a deficit, but we have to be anti-cyclical or pre-cyclical so we need to spend more at the moment and we hope that things will balance out in the medium term.
Our system and the Mexican system are similar, with a parliament and a president elected by vote. Normally, we have fewer powers than the European Parliament. We are happy to implement the work of the OECD and we are very happy to be here in the Parliamentary Assembly in Strasbourg. We call on the OECD to help us to revitalise parliaments, and we want to continue to develop our relations with parliaments and not just governments, because in our country the government proposes things and the parliament votes on them, but we have to bow to the President of the republic. I congratulate the OECD on its work.
THE PRESIDENT – Thank you, Mr Lorenzini Basso. I call our last speaker, Ms Quintanilla.
Ms QUINTANILLA (Spain)* – Secretary-General, thank you for your report. I greet our guests from the Parliaments of Mexico, Chile, Republic of Korea and Japan. The OECD was established some 50 years ago to speak about the global economy. Now that its 34 member countries constitute 80% of global GDP, the OECD no longer speaks solely about economics. As you made clear in your report, the OECD speaks about social issues, climate change, the environment, agriculture and employment. I think that that is a good thing.
Seven years ago, the world was convulsed by an unprecedented economic and social crisis, from which people are still suffering. As you know, the Spanish economy is recovering, with an increase of 1.3% in GDP. Employment, the cornerstone of families’ well-being and prosperity, is also recovering, but I am concerned that in the eurozone countries it is recovering only gradually and 45 million people are still out of work. We are talking about the sort of employment that generates economic benefits through the taxation of families – employment that does not bring about families’ well-being. The dearth of employment causes inequality and poverty. It leads to economic adjustments that affect the most vulnerable, such as those with disabilities and the elderly. The situation of women also becomes more difficult. What is the OECD’s analysis of growth and employment in the eurozone? How will we maintain the welfare State, on which Europe took the lead – especially Spain – if we cannot implement economic measures that generate employment?
THE PRESIDENT – That concludes the list of speakers.
I am sure, Mr Gurría, that you would like to reply to the debate.
Mr GURRÍA – Thank you, Madam President. On the question of climate change, Mr Prescott – absolutely. We were there last week, and we will be in Lima. We will see you there. We will be helping the French with COP 21. We are on a collision course with nature, as I have said. We are using the crisis as an excuse not to do what we have to, but we absolutely have to address the question of climate change. It is not going to go away, and it is going to cost us a lot. I have to say that all known courses of action have a lower cost than the course of inaction, which has not only known costs that are higher, but many unknown consequences – social, political, of course environmental, physical, geographical, economic and so on. We will keep working hard on that, and we are glad to have support from such a distinguished person.
Mr Sasi, the question of debt continues to be a problem, but it is very differentiated. Some countries are dealing appropriately with their debt – bringing it down – but some countries still have growing debts. Averages can be deceptive, but we are already close to a debt-to-GDP ratio of 100%, which is up from 60% to 70% before the crisis. We cannot ignore the fact that we have added almost 40 percentage points during the crisis. Japan has a ratio of 220% to 230%. The figure for Greece is supposed to be coming down. We have always said that it has too much debt on its books, and its debts must be reduced still more. Its ratio was 170%, but it will rise to perhaps 175% before it can be brought down, and that level is clearly not sustainable. In Italy, the ratio was 120%, and went down much lower, but it has now gone up – unlike countries such as Belgium, where the ratio was much higher, but then came down – so that is a problem.
However, Mr Sasi, trade, investment and credit are sluggish, and unless those three things improve there will not be a recovery. They are the cylinders of the engine of growth. The ECB can do a lot of things, but it cannot perform miracles. All the structural changes have to come from governments, not from central banks. I agree that we have to go for productivity, rather than to continue to adjust salaries. I also agree – when I was in Spain recently, that is exactly what we said – that although it was necessary to adjust salaries in some countries, there is a limit to doing that, and if we are to increase productivity and total demand, we need to turn that around.
Mr Davies, I do not agree with you that this is about hysteria. The science is not in doubt: emissions hang in the air for 100 years. It is like a parking lot. Every day, emissions go up and they continue to fill the parking lot, with fewer emissions being taken out or destroyed than are going in. Therefore, we must face the fact that there is limited capacity. If we do not face that, we will pay a very high price. Let me just repeat that inaction is the most expensive option. Let me also say that we know more today about what will happen if we do not act on climate change. If we had known half of what we now know about the climate before the financial and economic crisis, we would have done a lot better on trying to stop it. We know more about the climate today than we ever did, and there is certainty about the science and the impacts, so there is no excuse for not taking action.
Mr Pasquier, inclusiveness is the name of the game. Inclusive growth must be the response to growing inequalities. Our latest work, “Making Inclusive Growth Happen”, is available for you to read. It is not only about the idea of inclusive growth, but about the political economy of how to make it happen. Concentration breeds inequality, and it is absolutely right to say that it creates extreme, radical conduct.
Mr Elzinga, you put your finger on the most important issue. We have run out of room for monetary policy. With interest rates at zero, how much further can we go? We have run out of room for fiscal policy. We are trying to reduce deficits and debts, so we cannot spend our way out of this recession. What can we do? We have to go structural – on education, innovation, competition and flexibility in the markets for labour and products, and on taxation, health and regulation systems, plus research and development – to make us more efficient. The problem is that such things produce results only in the medium and long term, not in the short term, but the medium and long term is the only way to go. Politicians have to bridge the gap between the short term and results in the medium and long term by explaining to the people what we are trying to do. People are intelligent and they can understand that. Let us forget about the next election in the short term, and instead look to the medium and long term to improve outcomes.
Mr Elzinga, you made much of having a regional trade agreement. The best option is not such an agreement, but a multilateral, worldwide trade agreement. However, we failed to deliver on that, so we are trying to reach the second-best option. That is when large blocs of economies get together, as we had many years ago with North American Free Trade Agreement, which includes Mexico, and as you have done in Europe, where the fantastic and wonderful common market project is still in the making. We should pursue the idea of the United States of America and Europe, the two largest trading blocs, getting together, notwithstanding all the technical, legal and political problems, because that is the only choice we can now make. The Trans-Pacific Partnership is an alliance – with Mexico, Chile, Colombia and Peru – to which 13 countries have already adhered, and it is absolutely the way to go. Such options are second best, but like with Lego, we will eventually be able to insert all the pieces into the gaps. Once we have enough bilateral and regional agreements, we should in the end be able to put together a multilateral agreement, including in services.
Mr Beneyto, Spain had a 10% current account deficit, but it now has a 1% surplus, which is a dramatic turnaround. We thought that that would take 10 years, but it took only three years. Of course, there was a cost in high unemployment, but that is now slowly ebbing. We have recommended that there be no more adjustments in wages. We now have to work on increasing productivity in order to increase wages, which will then raise total demand and create a virtuous cycle.
With the impressive reduction of the State deficit, the reduction of autonomous communities’ deficits, the surplus with Europe – it used to be a deficit – and the current strong and stable banking system, the turnaround in Spain is an example of how things can work, given enough time and political will. My only complaint about Spain is that it started the process late. When the problem started, Spain thought that it was an American one. When it crossed the Atlantic, it thought that it was an Anglo-Saxon one, but by the time it had said “Anglo-Saxon”, which is a long word, Spain was in up to its neck. Frankly, that is my only concern, but Spain is a good example of how things can be made to work, and I hope other countries will follow that example.
What is the most important consequence of Spain’s example? In the past, to generate the first new additional job, an economy had to grow at about 2.5% or 3%. Today, Spain is growing at 1% or 1.5%, but it is already starting to create new jobs. What is the difference between five, six or seven years ago and today? The difference is that the labour market and some other areas in the middle have been reformed. The country is the same – the same ageing population, the same structures and institutions – but those changes have led to a lower threshold for the minimum level of growth necessary for creating the first new jobs. That is the most critical factor in the Spanish case.
Mr Miyazawa, on the 50th anniversary of Kiichi Miyazawa’s entering office, I want to say that we are of course very familiar with his name. We are very proud of the Tohoku School and the work being done in Fukushima. A new generation of students are showing leadership and demonstrating excellence, and there is a new sense of cooperation in order to overcome the drama that is Fukushima. In Fukushima, people are still cleaning their houses wall by wall, roof by roof, inch by inch in the street so that they can live in them again. Many areas are still uninhabitable. There is a great sense of cooperation and strength of will.
Turning to the “three arrows” of Japanese economics, first, monetary policy, under Mr Kuroda, is going okay. Secondly, Mr Taro Aso is dealing with fiscal policy. However, the third arrow is the most important: the question of structural change. Education, innovation, greater openness to foreign investment, greater labour market flexibility – all are critical to growth recovery in Japan, where the debt-to-GDP ratio is 230% to 240%. Growth is absolutely essential if Japan is to bring down the debt, because otherwise it cannot continue to grow. We are very proud of the south-east Asia regional programme, and we thank you for Japan’s support.
In answer to Mr Mendes Bota of Portugal, let me focus on the long-term investment programme. This is the single greatest problem that we all face in respect of the developing, emerging economies. There are trillions in the stock market, the pension funds and the insurance companies, but we cannot make them migrate to finance long-term infrastructure in our countries. That is a regulatory problem involving banking and insurance institutions, and it is one of the issues that is keeping us busy in the G20 meetings.
Debt against investment is not a trade-off. There are certain absolute limits. You cannot continually increase debt because you are going to have greater investment. The markets set the limits. In some cases, we found where the limits were, and clearly, they had to stop. But investment in infrastructure does not mean that governments have to do it all. In fact, most of such investment would have to be done by the private sector, by all the savings that societies have accumulated over many decades, but with the guidance – sometimes a little in the way of guarantees, sometimes some encouragement – of the State.
The new Commission – Mr Juncker and his team – says that it wants to invest €300 billion in infrastructure in Europe. That should be a very important booster of growth, but it is not going to come from the budgets of the governments or the budget of the European Union. There is not enough, so it has to come from the private sector.
Turning to Mr Heer of Switzerland and the question of a targeted blacklist, with all due respect, we never had a blacklist. We never targeted a particular country. Some Finance Ministers talked about blacklists, but we never did. Switzerland is now making an exemplary contribution to the automatic exchange of information. You are absolutely right: we need a level playing field and to get rid of the last pockets of resistance, but we should not become confused on this issue. The Americans were the ones who created FATCA, which is the model we are following in order to have the automatic exchange of information throughout the world. It is in the sphere of base erosion and profit shifting – BEPS – and the lack of beneficial ownership transparency that we are fighting the second war. There is also the issue of
Delaware and the so-called patent box in countries such as the United Kingdom, the Netherlands and Ireland. We have to deal with this issue and make the situation reasonable and acceptable, and that is what we are trying to do.
Turning to Mr Lee, I thank you, because Korea has been steadfast, but the point you made was absolutely right. We always talk about Korea with great admiration. There was great economic development in Korea and an opening up to democracy, but now you need social cohesion. Children, women, the elderly – dealing with this issue is absolutely critical. New skills are indeed needed to face the new demands of the market. You ended by referring to a theme I would like to echo: yes, the Council of Europe should support the OECD.
Mr Van der Maelen, thank you very much for your support. However, there is no trade-off between public investment and fiscal consolidation. In a way, you have to do both. The limits are set by markets country by country, and as I said, investment in infrastructure has to come from both the public and the private sectors. I do not agree that the only cause of recession is austerity. We need to think about all the structural changes that were not made – the homework that was not done – and why there is growth in some countries but not in others. Some countries have low debt, some have high debt. Some countries have high unemployment, some low. What is the difference? Some did their homework. Now we know which approaches work better than others. Clearly, consolidation goes in stages. Sometimes you have to consolidate and then focus on investment and growth. Many countries are at that stage.
On the excesses that you mentioned, Ms Zimmermann, the rating agencies created part of the problem. They were the ones who said that the assets that turned out to be sub-prime were prime, were triple A. They put a ribbon round them, and a stamp on them saying “Triple A”, and they sold them to the market as such. However, when that proved not to be so, banks went bankrupt, the crisis started and the situation deteriorated. Rating agencies have a very serious responsibility, which is why the regulators are looking hard at how the agencies work. However, the problem is that rating agencies are so embedded, day to day, in every single one of our contracts and our economic and financial transactions that it is very difficult to say that we will do without them. The conclusion has been reached that the quality of regulation is better than if they did not exist; and in any case, it is a service we would have to invent.
Monopolies are bad in the public sector, but they are even worse in the private sector. Monopolies are not good, period, and we should not have them in any sector. On the banking system, capital adequacy and the asset quality reviews, the current stress tests are absolutely critical and we have to make them part of the solution, because the banking system is not lending today in Europe. The credit level in 2013 was negative. Why are we not growing? It is no surprise: the banks are not lending, among other things. Unemployment is high. That is no surprise: the banks are not lending. We should get the banks not only to survive, but to lend again. In the end, that is what they are expected to do.
Turning to Mr Dişli, the competitiveness issue is central to the problem we face, as is productivity. We strongly support the centre for regional competitiveness in Istanbul, and we thank you for your proposal. You have done very well indeed. Your performance during the crisis was good, but you have suffered the consequences of the fact that most of your trading partners are now much weaker, and you have to compensate for that. You should keep the faith and stay the course. Notwithstanding all the turbulence, if the substance remains solid and good, as it is in Turkey, you can withstand future surprises.
Mr Larios Córdova, let me make a rather general statement. No other country in the world today has made as many important, far-reaching reforms – including the secondary laws and codes and their application – as Mexico. I say that proudly because I am a Mexican, but I also say it as head of the OECD. If I were Turkish, Italian or American, for example, I would still have to say, objectively, that no other country has achieved such a wide range of reforms as Mexico. I addressed the President of Mexico – the reformer-in-chief – in New York last week.
Having said that, now is a time for implementation, implementation, implementation. Those who think they lost power or privileges with the reforms will never stop fighting to recover what they lost. They want to dilute the reforms and you have to stand vigilant. You are legislators; you approved, promoted, modified and even strengthened the laws that were proposed to you by governments, but you have to stand vigilant. Do not allow los poderes fácticos—the powers that be—to dilute the laws. It is an impressive collection: education, competition, labour, finance, energy, telecoms and so on. You mentioned inequality, corruption and subsidies as things that we could work on, but how about the justice system and rural areas? We would be honoured and happy to work on them.
To Mr Zingeris of Lithuania, I say that Latvia is moving quickly to becoming a member, along with Colombia. Lithuania and Costa Rica are not far behind, and I hope they will join the path of accession to membership next June. We will then have all the Baltic States. We already have Estonia, and we will have Latvia and Lithuania.
Ms Anttila, growth is critical and stagnation is the great danger. How can we avoid deflation? We are not worried about inflation, but deflation. As I said, we have run out of room with monetary policy and fiscal policy. We have to go structural and we have to fix the banking sector. That is the way to go. You complained about the strength of the euro. The euro is as low as it has been for a long, long time, but for the wrong reasons. It is because of instability and geopolitical considerations. One cannot have success in a society and then say, “I want my currency to be very weak”, because success brings with it the fact that the currency becomes more valuable. How do you compensate for that? You do not compensate by artificially devaluing the currency or by the central banks keeping it low for too long. They cannot do that for long; they can only do that for short periods. Strong currencies, which are a success story, have to be compensated with higher productivity. You have to move into more value-added types of production. That is the way to go, including for Finland, because it has all the characteristics necessary—all the knowledge and all the technology—to change its productive model.
Mr Lorenzini Basso, thank you for your comments on the reforms. What is happening in Chile is very important. Chile was admitted to the OECD because of its best practices. When Chile joined the OECD during the first term of President Bachelet—she has since been re-elected—she said that the OECD was not a rich man’s club, but a club of the best practices. I printed that and put it on the wall for everyone to remember. Clearly, in the question of how you use the $7 billion from the tax reform for education, to tackle inequality and for greater anti-cyclical growth in the budget, the budget should not be increased. You can increase the budget as much as possible, but only so long as you have a source to finance that rise. You do not want the debt to grow back. In Latin America we have strong, painful experiences of debt going too high, including in Chile.
We commit to continuing to work strongly and closely with parliaments, including the Parliamentary Assembly of the Council of Europe. I finish by responding to the comment made by Ms Quintanilla. I remind you what we said about Spain and its dramatic transformation. We are now looking at the social consequences of the crisis—not just the economic and financial consequences. Spain has turned around, but employment continues to be the single most important target. One of the things that we delivered to Mr Jagland and the President of the Assembly is the employment outlook. We also gave it to Ms Bakoyannis last night. You can take a look. It is about the numbers, the wages, both real and nominal, and the quality of jobs, which is the third dimension. Thank you very much.
THE PRESIDENT – Thank you very much. It was a great privilege for us all to listen to your introductory speech and to how you answered the questions. You repeated that the Council of Europe should support the OECD. We are doing that, and you are supporting the Council of Europe, which is shown by the fact that you come here each year. You are always very welcome and I look forward to our close cooperation, because we need it for all those who we represent as parliamentarians. Thank you very much.
I also thank our guests who are non-members of the Council of Europe. You are most welcome. This OECD debate is a good opportunity to meet you. I want to address the delegation from Japan and express our condolences over all the unfortunate victims of the volcanic eruption of Mount Ontake. It was a terrible accident of nature and we offer you all our sympathies.
That concludes the debate on the first item of today’s agenda.
3. The functioning of democratic institutions in Georgia
THE PRESIDENT* – The next item of business this morning is the debate on the report entitled “The functioning of democratic institutions in Georgia”, Document 13588 and Addendum, presented by Mr Michael Aastrup Jensen and Mr Boriss Cilevičs on behalf of the Monitoring Committee.
I remind the Assembly that at Monday morning’s sitting it was agreed that the speaking time for today’s debate be limited to three minutes. I also remind you that consideration of the draft recommendation will take place this afternoon. In order to finish this morning by 1 p.m., we shall interrupt the list of speakers at about 12.55 p.m. to allow time for the replies.
I first call Mr Jensen, co-rapporteur.
Mr JENSEN (Denmark) – Thank you, Madam President, for putting this very important report on the agenda today.
Before I discuss our report, I want to say that I am sorry I did not have the chance to participate in the Monitoring Committee meeting where there was a discussion about the various amendments to the report, because I had to take part in very important parliamentary business back home in Denmark. Looking at various amendments, I see some that we, as co-rapporteurs, cannot support in any way or form. I have to say that clearly from the start. If those amendments are approved, it will steer the report in a completely different direction from the picture that we were trying to paint in it. I am quite saddened by that, because although Georgia is in a very polarised State and has been for some years, we have tried to write a report that is somewhat balanced but also addresses the different issues that still remain. The amendments would bring the polarised and partisan positions that exist in Georgia right now into our report and this Assembly. That would be a complete shame, because our Assembly should try to put aside partisanship and paint a correct picture of the situation as it is, for the moment.
A lot has happened since our last report. In 2012, Georgia had a parliamentary election where we saw the first peaceful transition from one side to another. That was very good, in our opinion. We had a time frame for co-habitation whereby President Saakashvili was still in power from 2012 until the presidential election in 2013. Now the Georgian Dream coalition is in power – it has a majority in the parliament and also holds the post of president. That is a peaceful transition that has taken place. Also looking on the optimistic spectrum, we have a very active opposition in parliament that has tools to put pressure on the government, as it should in normal European countries.
Having said that, I must emphasise that Georgia is also still a very polarised and partisan country where, when one party is in power, the other party has put undue pressure on it. We have seen numerous reports of this. Just before the local elections took place last year, numerous United National Movement opposition members of local councils were told to change parties or even to withdraw their candidacy for those elections. We have also seen numerous examples of the majority government side putting pressure on UNM campaigning activities and on UNM members of parliament.
All in all, we have seen progress, and there is still optimism from our side that Georgia can progress in a way that we will welcome, but we also emphasise that there is a long, long way to go. For example, there has been progress regarding reforms of the judicial system, but it is still prosecution-driven. If someone is first indicted, then they are also most likely to have a verdict put upon them. That has put a lot of pressure on indicted persons to have to plea-bargain some kind of deal with the prosecution, and that is of course unacceptable in any way or form. Finally, I just say that optimism is okay, but there is still a long way to go for Georgia, and we will continue to follow it closely as co-rapporteurs.
THE PRESIDENT – Thank you very much. I call the co-rapporteur, Mr Cilevičs.
Mr CILEVIČS (Latvia) – Let me follow on from what my co-rapporteur has said. Yes indeed, Georgia is on the right track, but there is still a long way to go. Some outstanding commitments undertaken by Georgia for accession to the Council of Europe are still to be fulfilled. Independence of the media, particularly the public service broadcaster, is a problem. There are many cases of intolerance towards religious, sexual and national minorities. The government’s declared attitude is very strongly against that, but in practice investigation and prosecution of perpetrators in these cases remains insufficient. The repatriation of Meskhetians is still a problem. A legislative framework, not perfect but with good work, is in place, but practical implementation is a problem. As far as we know, still only seven repatriations have been granted for Georgian citizenship. Ratification of the language charter is still pending. The judicial system remains a very sensitive issue. In an addendum to our report, we highlight several new developments. In particular, it is very important that the prosecution against the former president, Mr Saakashvili, is held in accordance with the highest standards of fair trial and human rights. We also note that pre-trial detention is still too often used, and in some cases its length exceeds human rights standards.
In mentioning all those issues, we must be honest towards our Georgian friends. Generally, however, as my co-rapporteur said, we are positive. We believe that progress will continue and that Georgia has good potential to fulfil all its commitments and obligations.
THE PRESIDENT* – I thank the co-rapporteurs. In the debate I call Mr Omtzigt on behalf of the Group of the European People’s Party.
Mr OMTZIGT (Netherlands) – I thank the rapporteurs for a thorough report with thorough observations on Georgia.
Georgia is in a difficult situation, and this Assembly owes it at least one thing. Georgia and Russia fought a war, and Georgia finds itself with 20% of its territory occupied. In their response, I would like the rapporteurs to give us some idea about people’s human rights, especially in South Ossetia but also in Abkhazia, and how they can get them. The Committee made a number of comments on the government, and rightly, quite a few on the previous government. Those citizens have severe troubles. Perhaps the rapporteurs could not only say a few words about that but include it in their next report.
What should be important for Georgia, Azerbaijan and Armenia, and other countries in the region, is to find a way of getting out of the monitoring procedure. They have been there since they became member States, and there is no path in the report for getting them out of it and into the post-monitoring procedure. That is really worrisome. I applaud Georgian politicians for not, unlike their neighbours, blaming the occupation of part of the territory and saying, “That’s the reason we shouldn’t make progress.” In the Committee – obviously I am not supposed to tell – we talk about the real issues and do not blame it on foreign occupation that no progress is made at home.
As the former rapporteur on abuse of political justice, I would like to use the rest of my time to highlight the extremely sensitive nature of prosecuting a former president. It is quite worrisome that almost the whole former government can quickly find itself holding a meeting in a prison somewhere in Tbilisi. It raises the issue, on the one hand, of many crimes not being prosecuted and, on the other, of the prosecution of political opponents. We must ensure that the decision is not political. It is worrisome not that Mr Saakashvili is being held responsible – there are things for which he should be held accountable – but that his assets have been frozen. Even his mother’s assets, including her car, have been frozen. It all points to a public prosecution overstepping the bounds.
I invite the Georgian authorities to continue their good work but to stop pursuing political prosecutions and to ensure independent prosecutions, with public oversight, perhaps from other nations.
THE PRESIDENT – Thank you. I call Sir Roger Gale to speak on behalf of the European Democrat Group.
Sir Roger GALE (United Kingdom) – Colleagues who were privileged to take part in the parliamentary election observation mission in October 2012, and those who subsequently took part in the presidential election observation mission, believed we were seeing free, fair and democratic elections. We came away with great hope. I recall we thought that Georgia was a shining example of real democracy in progress. Within one month of the parliamentary elections, there was a civilised, democratic and fair transfer of power, and within eight months there was a further transfer from the president. It was indeed a shining example.
Unfortunately, the Georgian dream has turned into a nightmare. After a brief tenure in office, former President Ivanishvili now exercises power without responsibility as an ordinary citizen, while puppet ministers consult him. A country is not like a business – it is not Gazprom – and winning an election is not like a business takeover. In a mature democracy, which Georgia, sadly, patently is not, opposition is tolerated, not imprisoned or charged in absentia. It is not good to send out the signal to an opposition, “You will go to prison”. Whatever the wrongdoings of the previous administration – I am sure there were some – there is no excuse for the elimination of political opponents.
Georgia has an association agreement with the European Union the terms of which must be honoured, but it is unusual for the European Union to be taking a more robust line on human rights than the Council of Europe. To date, that seems to be the case. The report has been studiously prepared, but it is anodyne. The monitoring committee accepted many amendments by overwhelming majorities – I am sorry that Mr Jensen was not there to hear the arguments – and I hope that the Assembly will accept them as well and give the report some teeth.
THE PRESIDENT – Thank you. I now call Ms Mateu Pi to speak on behalf of the Alliance of Liberals and Democrats for Europe.
Ms MATEU PI (Andorra)* – The ALDE group would like to congratulate the co-rapporteurs on their report. On Monday afternoon, I met Yulia Tymoshenko in these halls. She was relaxed and pleased to talk freely and without fear. This person, a former Prime Minister of Ukraine, was the subject of many debates and reports in this Assembly and other forums following her arrest in Ukraine in 2010. At the time, the President of Ukraine said that nobody was above the law. Four years later, these and similar comments are being used by Georgian authorities as a pretext for accusing members of the former government. Without making any judgment, we need to be very careful, and this issue should be given more attention in this otherwise fair and comprehensive report.
Over the past few months, the United States of America Department of State, the European Union External Action Service and some of our member States have expressed concern about the wave of arrests of former Georgian leaders, but our institution has not said much about it. Democratic institutions can function only if we remove ourselves from thoughts of revenge. As Mr Cilevičs said, the ongoing judicial process must be impartial. We commend these words, but it would be even better had the Georgian authorities not adopted such a backward-looking mindset, and we support the cautious stance taken by the rapporteurs, despite the promise by the Georgian authorities to carry out sweeping constitutional and judicial reforms. However, we want to believe that they will consolidate the rule of law and introduce a clear separation of powers. The future of a prosperous, democratic Georgia depends on our being confident, constructive and positive about the future.
THE PRESIDENT* – Thank you. I call Mr Kox to speak on behalf of the Group of the Unified European Left.
Mr KOX (Netherlands) – I thank the rapporteurs for their report. Since independence, Georgia’s development has been complex – and it has not been a fairy tale. In the short life of this small and beautiful country, which I have had the privilege to visit several times, we have seen it all – antagonistic political relations, succession, revolution and war – and still its citizens suffer.
The report deals with recent developments in the democratic institutions of Georgia. The good news is that there are functioning democratic institutions, but there are serious concerns to address. I understand that members of the former government are more critical of what is happening than those in the newly elected government – the latter emphasise the positive side in the development of Georgia’s democratic institutions – and the UEL group is obliged to listen to both sides. In the past, my group warned colleagues not to turn a blind eye to the malfunctioning of democratic institutions in Georgia, however popular President Saakashvili then was, and afterwards many things developed badly. This led to a major change in the government, presidency and parliament, and the new parliament, government and president have committed themselves to overcoming past mistakes and to delivering serious improvements in the functioning of the country’s democratic institutions.
I agree with Sir Roger Gale, however, that Georgia is far from being a fully fledged democracy – how could it be after such a short life? – and again my group does not want to turn a blind eye to new mistakes or the repetition of old ones. The fact that so many former politicians are now in prison is a very bad sign. Politicians should not be in prisons; they should be in Parliament, in the public sphere. Of course there can be exceptions and the judiciary must take care of things when they go wrong, but if there are that many former politicians in jail, it is something in the country that is going wrong.
Democracy is a process. This is a work in progress, and it is often very difficult. I understand all Georgia’s difficulties in becoming a mature democracy. I think it can work, but we must not turn a blind eye to what happens and under which government or parliamentary majority. We should support Georgia with our well-meant criticism.
THE PRESIDENT – Thank you. I call Mr Recordon on behalf of the Socialist Group.
Mr RECORDON (Switzerland)* – I pay tribute to the rapporteurs, who have a difficult job. They have done some convincing work, but I must nevertheless reveal that we in the Socialist Group are concerned and sad to see how things have gone, for two reasons. I participated in the election observation mission a year ago. As Sir Roger Gale said, I left Georgia with an excellent impression and the feeling that the opposition had accepted defeat gracefully. I went to the headquarters with my colleague Mr Mariani after the elections, and it seemed to all the observers who had followed various elections that huge progress had been made. Yet now all that is jeopardised – perhaps, as Sir Roger said. There are many instances of “perhaps” in what we have heard so far.
That is the cause of my second concern, and my sadness. I have the impression that many of us in this Assembly have rushed, without doing enough homework, into allowing themselves to be guided by unverified facts. If there is one thing at least that is necessary to maintain the dignity and credibility of this Assembly, it is that we work on the basis of facts that have been rigorously checked, which is what the rapporteurs have tried, and managed, to do. Today, depending on the results of votes on certain crucial amendments, we could do a lot of damage to how our Assembly is viewed. We must be very cautious in voting. We must decide whether to pass the report if it is radically amended or seek a more dignified way of doing things.
THE PRESIDENT* – Thank you. I call Ms Beselia.
Ms BESELIA (Georgia) – The Georgian Government’s main priority is protecting human rights. The judiciary is now free from political influence. The new Government has started investigating cases involving deprivation of life and inhuman treatment and torture.
We have no right to put anybody above the law, whether it is Saakashvili or Akhalaia. Everyone is equal under the law. Mentioning surnames is against the principle that no one should interfere in the decisions of the court. In the case of Akhalaia, the rules of detention have not been violated. President Saakashvili pardoned him at the end of his presidential term, but Mr Akhalaia has committed other crimes. He has been charged in the Girgvliani and Tetradze cases, and in the killings of four innocent men in 2006. These are heavier charges. Judicial review has begun on some of these cases. How can the Assembly write his name in the resolution? It will be considered as a pressure on the independent court.
There is no political persecution in Georgia. There was in the period of Saakashvili, but the new Government announced an amnesty and released political prisoners. Today, court hearings are public and transparent, with media coverage. The chairman of the Supreme Court is the brother of a leader of the opposition party. We continue with reforms and protection of human rights.
I call on the Assembly not to mention specific names in the resolution. The Government does not have the right to hide crime and not investigate it. We should respect the common principle that every person should be equal under the law. We believe that the resolutions of the Assembly should aim to protect the rights of everyone in society, not serve a specific political group.
THE PRESIDENT* – Thank you. I call Mr Mignon.
Mr MIGNON (France)* – Georgia is a large and beautiful country with a thrilling history. Over the past few years, it has experienced many important events. The first was the 2008 war, about which we could say and already have said a great deal in this Chamber and which involved the territories of Abkhazia and South Ossetia. Many people fled in controversial circumstances. Then there was the change in power in 2012, when the opposition won the general elections, and the difficult cohabitation of President Saakashvili and Prime Minister Ivanishvili. Then there was the presidential election. I recall that President Saakashvili and the former majority conducted a number of reforms that made possible all the reforms mentioned in the report. The next elections saw the advent of a new President; President Saakashvili had come to the end of his term and was unable to stand again, and even if he had, I do not think he would have been elected.
I visited Georgia several times when I was in your position, Madam President. Flouting justice and practicing selective justice, as happens in other countries too, needs to stop. We cannot allow that. We in the Council of Europe are in an Organisation with criteria and rules that apply to everyone, including my own country. We also have the Venice Commission, which is doing a sterling job of pulling people up when certain things go wrong. I am disturbed to see numerous former leaders systematically being locked up or put in preventive detention, as is the case with the former Prime Minister, the former Defence Minister and the former Interior Minister, who were unable to stand in the last general elections. It is vexatious. I can imagine what it would be like if that happened in your country, Madam President, or in mine.
We are here to help. This imprisonment of former leaders after a change of power must end. You must get over the avenging spirit and imbue yourself with the spirit of that great man Nelson Mandela. Look at what he did in South Africa. He drew a line under the past and created new things, and even people who could have been thrown in prison were included. The example of South Africa could also be applied to other countries. I love Georgia. I love your country. It has a great future. Help us, because we are ready to help you.
THE PRESIDENT* – Thank you. I call Ms Magradze.
Ms MAGRADZE (Georgia) – I thank the rapporteurs for their in-depth and positive evaluation of the process of democratisation in Georgia. The new Georgian Government, which came into power after the 2012 parliamentary elections, has been implementing comprehensive reforms and taking steps towards strengthening democratic institutions in Georgia.
The election environment in 2012 was not as free and fair as it needed to be, but the transfer of power was peaceful and smooth. The period of cohabitation between the then president Saakashvili and the Georgian Dream coalition government was challenging, but it demonstrated the maturity of Georgia’s political system. Cohabitation did not paralyse the country; many fundamental bills passed during that time were bipartisan, including the March 2013 resolution on foreign policy.
The tensions sometimes overshadowed the many positive changes that were taking place in the democratic environment of Georgia, but it is necessary to recognise the efforts made by the Georgian authorities to overcome the polarisation by offering an amnesty to former government officials accused of abuses and maintaining continuity within the professional civil service.
The widespread human rights abuses under Saakashvili's government led to more than 20 000 citizens’ complaints being lodged within just the first two months of the new government. But, in fact, investigations and trials are taking place for the most serious crimes: violence, murder, torture or the large-scale theft of State assets by senior government officials. To date, only 35 former officials have been investigated.
The investigations and prosecutions are part of the normal process of justice. However, given the sensitivity of the process and the claims by the opposition that they are politically motivated, the government has ensured full transparency, with courtrooms open to television cameras, as well as extensive international and civil society oversight.
The 2013 presidential elections, the 2014 local elections, and the pre-electoral environment were judged free and fair and as meeting European democratic standards. The independence of judges has increased with de-politicisation, in line with the Council of Europe's Venice Commission's recommendations.
The approval of pre-trial detention has dropped significantly; it was used in 26.7% of cases in 2013 compared with 42.4% in 2012. On 1 August 2014, the Georgian Parliament unanimously adopted draft amendments to the Code of Administrative Offences. The maximum period of administrative custody for all violations has been reduced to 15 days instead of 90 days.
In January 2014, the government destroyed a cache of thousands of “dirty tapes” recorded under the previous regime. The government introduced new legislation to ban such recordings, and it was passed by the parliament in July.
Transparency International Georgia reported a decrease in partisan bias in the media, and I should also mention the adoption by the Georgian Parliament of anti-discrimination law and a new human rights strategy.
Of course there are problems with democracy in Georgia, but we need your assistance, and I believe that the Assembly’s resolution will encourage the Government of Georgia to continue the reforms aimed at increasing democratisation in the country.
Thank you.
THE PRESIDENT – Thank you. The next speaker is Mr Kandelaki.
Mr KANDELAKI (Georgia) – Thank you Madam President.
Let me start by stressing that the amendments that were supported by the Monitoring Committee were supported with an overwhelming majority – something like 24 to 3. Overturning them here would be utterly inappropriate and disrespectful of the opinion of the members of the committee who are elected there.
Two years ago on this day, Georgia went through an historic change – the first ever electoral change of government. Even though that meant defeat for my party, we still regard that as a success, because we built the kind of system in which parties can alternate smoothly without cataclysms. If you are building a democracy, one day you get voted out of office. That is how it works, but what has happened afterwards can hardly be viewed as a success.
The government of oligarch Bidzina Ivanishvili, who made his fortune in Russia, has been obsessed with the agenda of political retribution instead of fulfilling promises. Now this agenda has gone too far. Georgian democracy is backsliding in front of our eyes. We are trying to convince various countries with weak democratic traditions that they should go fully democratic, but part of doing so is that governments have to lose one day. Georgia has always been cited as a success story, but the “unfortunate lesson” that Georgia is producing now is that once you lose, you go to jail. I do not think we want this to be the case.
By now, as the draft resolution says, almost the entire leadership of the United National Movement – the main opposition party - is either already in jail or under prosecution. The rapporteurs cannot name even one leader of UNM who is not in jail or under prosecution. Such a leader does not exist. That is a great sign.
Another great illustration of what we are dealing with is the fact that most of these people are in pre-trial detention: that is, they have not been found guilty. Our campaign manager and former mayor was thrown into pre-trial detention five days before the key run-off just because the oligarch did not like the results of the first – the oligarch, by the way, who controls the government, and this is a publicly stated fact, along with the prime minister, who was his personal assistant.
Ivanishvili is repeating the path of President Yanukovich. Remember when Yanukovich was cracking down on his opponents. He would say, “It is the rule of law. I cannot interfere”. I think the Ukrainian experience shows that we must not buy these arguments, because they lead to disastrous consequences and we do not want Georgia to explode.
We, as a democratic pro-western opposition, want to play by the rules. We are a loyal opposition, loyal to the State and to the constitution. Please help us to compete within that civilised framework by adopting the amendments that were approved by the Monitoring Committee and that will help Georgia to slow down this democratic backsliding. I count on your support for the resolution and for the amendments that were supported by the Monitoring Committee.
Thank you very much.
THE PRESIDENT – Thank you. Now I ask Mr Hovhannisyan to take the floor.
Mr V. HOVHANNISYAN (Armenia) – Dear colleagues, let me stress that the rapporteurs have done a really serious and profound job. It is a hard task to depict with this depth and these details all the processes that take place in a country. To me, the axis and most important point of the report is the fact that the authorities changed in a peaceful way. This is one of the most painful problems of the post-Soviet democracies. In the region of South Caucasus, Georgia is still the only country to have managed this. Election fraud must always be subject to the strictest condemnation by the European structures. This is a point where no compromise or concession can ever be admitted.
The second important point is that of the freedom and reformation of the media field. We see how in the majority of the transitional democracies the authorities control the media, creating an illusion of false freedom and false pluralism.
The third point is the criminal prosecution of former government officials. It is very important to avoid any criminal case behind which political motivation can easily be seen. Avoiding it will create a good fundament for further coexistence in the common political arena and in future peaceful elections. On the other hand, every government official must realise that any unlawful step committed during his tenure will never be left unpunished. The task of the independent judicial system is to distinguish between political motivation and real crime.
I want to emphasise the wiretapping and the use of such materials against political opponents by the former Georgian authorities. The report stresses that a special commission has been formed to examine this problem. Some 24 000 secret materials that had been used for blackmailing people are going to be eliminated. That was a terrible thing. This problem also exists in other post-Soviet countries, and it is important that the people giving the orders know that it is a serious crime and that they will surely be punished one day.
The next point is that it is vital for the Georgian authorities to react harshly in every single case of ethnic or religious discrimination. In Georgia, unfortunately, there is still a lot to do about it.
Finally, Georgia has the potential to foster the positive developments in the Caucasus, the first of which is the integration processes. Let us admit that no closed communication can ever support the integration processes. I refer here to the reopening of the so-called Abkhazian railway linking Russia, Georgia and Armenia. It would give a great economic boost to all three countries. I am sure that it is the right time to have this point on the agenda again, this time with the aim of finding a solution.
Thank you
THE PRESIDENT – Thank you. Ms Taktakishvili will now take the floor.
Ms TAKTAKISHVILI (Georgia)* – Thank you, Madam President.
Since the change of government, many Georgians were hoping that we would see positive changes for the country. Two years later, as we have heard, the vast majority of pro-European opposition leaders and members of the previous government are now in prison or being investigated for crimes. This is not what the Georgians aspired to when they voted for a change in government in 2012.
The list of people now in prison or subject to prosecution is very long: the former president, the former prime minister, the former Minister of the Interior, two former Ministers of Defence, the former mayor of Tbilisi, the Minister of Justice, the Minister for Health and the former ambassador to Strasbourg here in the Council of Europe, the former speaker of parliament and the former Secretary of the National Security Council, to name only some. I would not have enough time to list all of them here.
The European Union and other international organisations have already made clear their concerns about too many people, especially political leaders, being detained on remand. It is interesting that the timing of these arrests matches exactly the political calendar, particularly in respect of presidential and local elections in the last two years.
Whatever grievances we may hold against opposition leaders – we are not here to look at them in detail – in most of these cases accusations are just based on witness statements and often witnesses in such criminal cases are political leaders. Witnesses who support the prosecutors are immediately acquitted, even if accused of complicity and often they then experience a meteoric rise in their career in the civil service.
Two key witnesses, both ex-civil servants – Shalva Tatukashvili, who was 33, and Alexandre Danelia, who was only 38 – were found dead in their flats. In both cases, the Ministry of the Interior immediately dismissed the cases as suicide and they are not even being investigated. The government says there is no reason for doing that.
Given these circumstances, government spokesmen say that international organisations should not interfere in the sovereign affairs of Georgia and that everybody should abide by Georgian laws. It is difficult to deny that this sounds very much like what Putin might say or what Yanukovych might have said. So the situation is even worse than we thought.
I really feel that you need to make your voices heard to denounce anti-democratic policy in Georgia. This is the reality. You must convince the Georgian authorities that they need to cast aside revenge and persecution of the opposition, because that is not how we will achieve prosperity in Georgia in the future.
THE PRESIDENT* – Thank you.
Ms Giannakaki is next on the list, but I cannot see her in the Chamber, so we move on to Mr Zingeris. Mr Zingeris is not here either.
I call Mr Ariev.
Mr ARIEV (Ukraine) – Thank you, President.
Distinguished colleagues, after the rose revolution of 2003, Georgia became a bright example for the entire world. A deeply corrupted country, where criminals in law were respected persons, was turned around for a couple of years under the successful reforms and development by President Saakashvili and his government.
Democratic changes and progress in this small country of Georgia made Moscow angry in a deadly way, and in 2008 Russian troops invaded Georgia to establish the occupation of Abkhazia and South Ossetia. After that war, Russian agents made all efforts to destabilise the government of Saakashvili, which continued reforms anyway.
Then there were democratic elections using a reformed constitution. Opponents of Saakashvili won. It was good – it is the next level of democracy – but the new government took a step back and began the persecution of the former president’s team at all levels.
Today, the entire leadership of the opposition party, the United National Movement, is either already in jail or being prosecuted. This includes former President Mikheil Saakashvili, sentenced to pre-trial detention in absentia, former Prime Minister, Vano Merabishvili, former Tbilisi mayor and opposition campaign manager, Gigi Ugulava, and so on. These are major political figures in the Georgian opposition. These facts should at least be mentioned in the resolution, but they are not. We see clear facts relating to selective justice, as it was in Ukraine before the revolution of dignity.
The way in which events unfolded in Ukraine offers many lessons to Georgia. One lesson is that democratic backsliding always benefits Russia. The road of cracking down on opposition is a road to Putin. We remember what finally happened to President Yanukovych and what happened afterwards. Such a crackdown on opponents should not be accepted by this Assembly.
I think we should mention these disturbing facts in the report and support the amendments initiated by Marietta de Pourbaix-Lundin and Pieter Omtzigt. If we note positive moments and progress, we should not ignore negative tendencies. Keeping silent never helps when basic rights are violated. Let us help Georgia to improve after the mistakes, to keep on developing reforms and democracy in this small and wonderful country.
I call on my dear Georgian friends: please, trust me. Use politics in election battles. Do not use a criminal code for political persecution, because that is only effective in the short term, as the Ukrainian experience has proved.
THE PRESIDENT – Thank you.
The next speaker is Mr Dişli.
Mr DİŞLİ (Turkey) – Thank you, President.
I, too, congratulate the co-rapporteurs on their efforts to provide us with such excellent work. It is fair to say that they make an objective, well-balanced evaluation of the situation in Georgia.
Georgia’s integration with the European Union and Euro-Atlantic structures is crucially important on the road to democratisation and to facilitate the transformation process. In this regard, the government’s continued commitment to the reform process, to further strengthen the democratic institutions in the country, should be appreciated.
On the other hand, the report touches upon two crucial issues: the repatriation process of the Ahiska, or Meskhetian, Turks and the problems of the Muslim community in Georgia.
With regard to the repatriation process, I think that our Assembly should continue to follow the issue closely and provide concrete support to the Georgian government and the Ahiska Turks, with financially backed projects to expedite and facilitate the process. Additionally, it is the responsibility of the Georgian government to remove all barriers in this regard, legal or otherwise, including the two-year time limitation on granting citizenship under the repatriation law. In this context, the situation of the Ahiska community in Ukraine deserves particular attention. Feeling distressed under the current crisis conditions in Ukraine, the community, numbering around 8 500 throughout the country, has expressed their desire to return to their ancestral homeland in Georgia.
The demands and expectations of the Muslim community in Georgia in respect of expressing and exercising their religion freely and using their rights to worship without any hindrance should be met. The government and society should be more aware and tolerant of the needs and demands of the Muslim community in Georgia.
I hope that this report will contribute to Georgia’s efforts in the reform process, and that it also helps in improving and consolidating its democracy and institutions.
Thank you.
THE PRESIDENT – Thank you.
I now ask Mr Xuclà to take the floor.
Mr XUCLÀ (Spain)* – Thank you, President.
Distinguished colleagues, I welcome this report on democratic institutions in Georgia. In the Alliance of Liberals and Democrats for Europe we have representatives from both the majority and the opposition in Georgia, so in that regard this debate is the same as debates we have had in our group.
I should like to mention just two aspects. First, major progress has been made in reducing the period of pre-trial detention. The standard time for pre-trial detention prior to going before a judge used to be extremely lengthy, but now under the new legislation the period has reduced from 90 days to a 15-day maximum. Compared with legislation in other countries that is still a very long period, and some members of the majority might have wished to see a shorter period, but I think headway and progress has been made, and we should highlight that.
However, there is one issue that is not strictly about the law but about politics, and it not only applies to Georgia. Democracy means that power can change hands between the government and the opposition. We must respect the rights of both the majority and the minority. In some countries—I do not want to name names—a change of government often means a root and branch takeover. With all due respect, we must robustly make the point, both to countries that are under the monitoring procedure and countries that are not under the monitoring procedure, that a change of majority does not mean a complete overhaul of governance. The best model of democracy is where there is a change of power without massive upheaval and a massive overhaul of powers.
THE PRESIDENT – Thank you. The next speaker is Ms Pakosta.
Ms PAKOSTA (Estonia) – Thank you, Madam President. Our debates today on Georgia and Ukraine are strongly interlinked. Indeed, the events in Ukraine should be seen as a direct consequence of our inaction in Georgia in 2008 and since. If we do not learn from that lesson, and if we close our eyes to what has led to today’s situation in Ukraine, we cannot guarantee that we will not soon be talking in this Chamber about Abkhazia’s annexation by Russia or another attack on the sovereign territory of Georgia.
I commend the co-rapporteurs for their exhaustive list of developments in Georgia. However, the report and the resolution absolutely fail to address two essential issues. One issue is key to any democratic development in that small Caucasian country—the territorial integrity of the Georgian State. Neither the resolution nor the explanatory memorandum even once mentions our recognition of Georgia’s territorial integrity. The report sweeps under the carpet Resolution 1683 “The War between Georgia and Russia: one year after,” which clearly tasked the Monitoring Committee to “monitor the follow up given by Georgia and Russia to Assembly demands and to propose any further action to be taken by the Assembly as required by the situation, in particular with regard to compliance with paragraph 12 of this resolution”. Yet all we can read in the memorandum’s one meagre paragraph on the issue is that “no relevant developments have taken place” since the rapporteurs’ visit in May 2013. How blind does one have to be not to see that the whole security situation in Europe has changed since autumn 2013? It is now more important than ever to talk about the consequences of 2008. It is regrettable that this venerable Assembly prefers to remain silent instead.
It is of course just as important to talk about internal developments. Unfortunately, the tendencies that we saw in Ukraine for years, with President Yanukovych’s oppression of his political opponents and the constant pretence of reforms, can now be seen in Georgia, too. We must give clear support to Georgia’s multi-party democracy, but we must also be concerned by the continued investigations and criminal charges against opposition figures. Georgia’s democratic development must include respect for political pluralism and open debate. Political prosecutions and crackdowns against the opposition should not be tolerated. The report unfortunately fails adequately to describe what is happening in Georgia, which by any meaningful measure includes the back-sliding of democracy.
We all understand that Georgia is not yet a mature democracy. Back in 2008, many of us called the young Georgian Government, perhaps prematurely, a beacon of democracy. While we are being firm, we must keep all our doors open to help Georgia’s European Union and NATO aspirations and to show it the light so that it can leave our monitoring procedure.
THE PRESIDENT – Thank you. The final speaker is Mr Chikovani.
Mr CHIKOVANI (Georgia) – Thank you, Madam President. I join all my colleagues in thanking the co-rapporteurs. Georgia faces an important time. Two years ago, Georgia voted and a peaceful transition of power occurred. For that we are thankful to the Georgian people, rather than to a political force. We realise that Georgia stands on an irreversible path where the people’s will must be, and is, reflected in Georgians’ everyday lives. That will continue.
We all recognise the challenges that stand before us. We recognise that we will not become a developed, democratic country overnight. We realise that there will be challenges driven by political means, such as misinformation or not having accurate information. It is important that this House continues to support Georgia’s democratic tradition. This House must ensure that the debate does not become about the local political parties, and this House must not take sides based on political affiliation.
Of course I am not happy that the former president and former government officials have been indicted, and of course I am not happy that there are so many questions about those people. That cannot be described to the more developed democracies of western Europe, and it is unfortunate. Those issues are present, but they are the legacy that we inherited. European nations and bodies are sometimes unable to see what is on the table, but today Georgians are sending a clear message that no previous Georgian Government has been so open, and the co-rapporteurs will bear testament to that.
I reiterate that in this debate one political party cannot try to prevent a person who has united the opposition from attaining power. The debate is not about Georgia choosing to be pro-Russian or pro-European. Georgia is on its way towards a European future. That is irreversible, and the government has made a clear commitment to continue its reforms. Yes, there are challenges, but we do not fear them because we came through nine years of Saakashvili’s rule—there cannot be a much bigger challenge than that. Today, we must fight for a more developed and democratic Georgia, and we are ready for that fight. This debate should not be between political parties, because such debates should happen locally. Elections are won in the hearts of the Georgian people, not in the Chamber of the Council of Europe.
THE PRESIDENT – Thank you. That concludes the debate. I now ask the rapporteurs to answer.
Mr CILEVIČS (Latvia) – Thank you, Madam President. I have two brief points. Several speakers expressed the idea that some people are in prison because they are members of the opposition. I do not agree with that at all. Let us not forget that there were serious problems—we all know about the Girgvliani judgment and the prisoner abuse scandals—but there have been credible allegations that must be properly investigated. Sir Roger Gale, are you ready to say who is guilty and who is not guilty? Are you going to say to our Georgian friends, “Please do not prosecute this guy because he was once a Minister”? No. Our mission is to ensure that all investigations and all trials are held in full conformity with our principles of the rule of law, human rights and due process. That is what we wrote in our report and in our draft resolution. When we notice violations, we speak about them. We may criticise our Georgian colleagues, but to tell them not to prosecute former members of the government is political.
My second point is that I am convinced that the current coalition and the opposition have much more in common than one might imagine. I am absolutely sure that all leading mainstream Georgian politicians adhere to European values. It is not easy, and we all know what political struggle is about, but polarisation is really harmful. Only when polarisation is replaced by normal political competition and co-operation will Georgia achieve its goals. We must do our best to help to overcome such polarisation. If we adopt amendments that are superficial and partisan and do not correspond to the facts, it will not help Georgia; it will help some politicians and deepen polarisation. That is why we, as rapporteurs, cannot agree to that.
THE PRESIDENT – Thank you, Mr Cilevičs. I call the co-rapporteur, Mr Jensen.
Mr JENSEN (Denmark) – I thank members of the Assembly for their comments and questions. Because time is restricted, I cannot dwell on many of the points that were made, but I want to address one. Mr Pieter Omtzigt asked about the occupied territories, and we touched on that matter in the updated version of the report. Nothing has improved at all, and we were even denied entry into the occupied territories. That is totally unacceptable, as we have said many times. We have also said many times that the behaviour of the Russian side regarding polarisation is totally unacceptable. Many other points are also totally unacceptable and completely out of line.
I say that because I am appalled that a so-called colleague, Ms Pakosta, launched a blatant attack on the co-rapporteurs, saying that we had not addressed that issue at all and that we did not take action regarding oppression from the Russian side. That is a completely appalling thing to say, because it is entirely contrary to reality. Apparently, our colleague has not followed our work of the past few years at all. I do not understand why she would get up, take the floor and say something that was completely untrue. We have said numerous times what we believe about the Russians, and I have personally put forward motions concerning suspension of the Russian delegation’s voting rights, which the Assembly adopted. I cannot understand, therefore, how anyone can try to paint a picture of us as being on Russia’s side.
Let us try to address the issue as it should be addressed, because it is far too important to be used by some members of the Assembly to try to score cheap points. The polarisation that exists in Georgia has swept into the Assembly. I believe that the report by the two co-rapporteurs is balanced, and that we are frank in our assessment of the situation and our proposals for what Georgia should do. It is very important that the Assembly vote down two or three of the amendments that have been tabled, because if we vote for them, they will steer the report in the wrong direction and make it into a partisan report. It is important that that is clear in our minds when we vote. We will come back to that when we take the vote.
THE PRESIDENT – Thank you very much, Mr Jensen. We said that we would stop at 1 o’clock, and we will return this afternoon at 3.30 p.m. to hear the chairperson of the committee and discuss the amendments.
4. Next public business
THE PRESIDENT – The Assembly will hold its next public sitting this afternoon at 3.30 p.m. when it will consider the draft resolution on “The functioning of democratic institutions in Georgia”.
The sitting is closed.
(The sitting closed at 1.05 p.m.)
CONTENTS
1. Changes in the membership of committees
2. The activities of the Organisation for Economic Co-operation and Development (OECD) in 2013-14 (enlarged debate)
Statement by Mr Angel Gurria, Secretary-General of OECD
Speakers: Lord Prescott (United Kingdom), Mr Sasi (Finland), Mr David Davies (United Kingdom), Mr Pasquier (Monaco), Mr Elzinga (Netherlands), Mr Beneyto (Spain), Mr Miyazawa (Japan), Mr Mendes Bota (Portugal), Mr Heer (Switzerland), Mr Lee (Republic of Korea), Mr Van der Maelen (Belgium), Ms Zimmermann (France), Mr Dişli (Turkey), Mr Hanson (Estonia), Mr Larios Córdova (Mexico), Mr Zingeris (Lithuania), Ms Anttila (Finland), Mr Lorenzini Basso (Chile), Ms Quintanilla (Spain).
3. The functioning of democratic institutions in Georgia
Presentation of report, Document 13588 and Addendum, by Mr Jensen and Mr Cilevičs, on behalf of the Monitoring Committee
Speakers: Mr Omtzigt (Netherlands), Sir Roger Gale (United Kingdom), Ms Mateu Pi
(Andorra), Mr Kox (Netherlands), Mr Recordon (Switzerland), Ms Beselia (Georgia), Mr Mignon (France), Ms Magradze (Georgia), Mr Kandelaki (Georgia), Mr V Hovhannisyan (Armenia), Ms Taktakishvili (Georgia), Mr Ariev (Ukraine), Mr Dişli (Turkey), Mr Xuclà (Spain), Ms Pakosta (Estonia), Mr Chikovani (Georgia).
4. Next public business
Appendix I
Representatives or Substitutes who signed the Attendance Register in accordance with Rule 11.2 of the Rules of Procedure. The names of Substitutes who replaced absent Representatives are printed in small letters. The names of those who were absent or apologised for absence are followed by an asterisk
AGRAMUNT Pedro
ALEKSANDROV Alexey Ivanovich*
ALLAIN Brigitte*
ALLAVENA Jean-Charles
AMON Werner/MAYER Edgar
AMTSBERG Luise*
ANDERSEN Liv Holm*
ANDERSON Donald
ANDREOLI Paride
ARIB Khadija/ELZINGA Tuur
ARIEV Volodymyr
BACQUELAINE Daniel*
BAĞIŞ Egemen*
BAKOYANNIS Theodora*
BAKRADZE David/ Giorgi Kandelaki
BALLA Taulant*
BAPT Gérard*
BARCIA DUEDRA Gerard/ Bonet Perot Sílvia Eloïsa
BARNETT Doris*
BARREIRO José Manuel*
BAYKAL Deniz
BECK Marieluise/Groth Annette
BENEŠIK Ondřej*
BENEYTO José María
BERDZENISHVILI Levan/ Beselia Eka
BERGAMINI Deborah/Galati Giuseppe
BERISHA Sali/BYLYKBASHI Oerd
BERNINI Anna Maria*
BERTUZZI Maria Teresa*
BIEDROŃ Robert*
BİLGEHAN Gülsün
BINLEY Brian
BLAHA Ľuboš/Gabániová Darina
BLANCHART Philippe
BLANCO Delia/Quintanilla Carmen
BOCKEL Jean-Marie*
BOCQUET Eric*
BOJANIĆ Mladen /Jonica Snežana
BORZOVA Olga*
BOSIĆ Mladen*
BRAGA António*
BRASSEUR Anne/Oberweis Marcel
BRATTI Alessandro*
BÜCHEL Gerold/Gopp Rainer
BUGNON André/Recordon Luc
BURYKINA Natalia*
CATALFO Nunzia*
CEDERBRATT Mikael*
CENTEMERO Elena*
CHIKOVANI Irakli
CHITI Vannino*
CHIUARIU Tudor-Alexandru/ Badea Viorel Riceard
CHOPE Christopher*
CHRISTOFFERSEN Lise
CHUKOLOV Desislav*
ČIGĀNE Lolita*
CILEVIČS Boriss
CIOCH Henryk
CLAPPISON James
CONDE Agustín
CORREIA Telmo*
CORSINI Paolo
COSTA NEVES Carlos
COSTANTINO Celeste*
CROSIO Jonny
CRUCHTEN Yves
CSENGER-ZALÁN Zsolt*
CSÖBÖR Katalin*
DAMYANOVA Milena*
DEBONO GRECH Joseph
DECKER Armand/ Maelen Dirk
DENEMEÇ Reha
DESEYN Roel
DI STEFANO Manlio
DÍAZ TEJERA Arcadio*
DIJK Peter
DİŞLİ Şaban
DJUROVIĆ Aleksandra
DRAGASAKIS Ioannis/ Katrivanou Vasiliki
DRĂGHICI Damian*
DROBINSKI-WEIß Elvira/ Rawert Mechthild
DUMERY Daphné*
DUNDEE Alexander*
DURRIEU Josette*
DZURINDA Mikuláš*
ECCLES Diana
ERKAL KARA Tülin
EßL Franz Leonhard
FABRITIUS Bernd*
FENECH ADAMI Joseph*
FENECHIU Cătălin Daniel
FETISOV Vyacheslav*
FIALA Doris/VORUZ Eric
FILIPIOVÁ Daniela
FINCKH-KRÄMER Ute
FISCHER Axel E.
FLEGO Gvozden Srećko
FOURNIER Bernard*
FRANKEN Hans
FRÉCON Jean-Claude*
FRESKO-ROLFO Béatrice*
FRONC Martin
GALE Roger
GAMBARO Adele
GARÐARSSON Karl
GERASIMOVA Nadezda*
GHILETCHI Valeriu
GIRO Francesco Maria
GOGA Pavol*
GÓRCZYŃSKI Jarosław*
GORGHIU Alina Ştefania*
GORYACHEVA Svetlana*
GOZI Sandro*
GRAAF Fred/Omtzigt Pieter
GROOTE Patrick*
GROSS Andreas
GROZDANOVA Dzhema*
GÜLPINAR Mehmet Kasim
GULYÁS Gergely*
GÜR Nazmi
GUTIÉRREZ Antonio/Xuclà Jordi
GUŢU Ana
GUZENINA Maria/Pelkonen Jaana
GYÖNGYÖSI Márton*
HÄGG Carina*
HAJIYEV Sabir
HALICKI Andrzej*
HAMID Hamid*
HANCOCK Mike
HANSON Margus
HEER Alfred
HENNRICH Michael*
HENRIKSEN Martin*
HETTO-GAASCH Françoise
HOFMAN Adam
HOOD Jim
HOVHANNISYAN Arpine
HÜBINGER Anette*
HÜBNER Johannes*
HUNKO Andrej
HUSEYNLI Ali*
HUSEYNOV Rafael
IGNATENKO Vitaly*
IORDACHE Florin*
IWIŃSKI Tadeusz*
JACQUAT Denis*
JAKAVONIS Gediminas
JANDROKOVIĆ Gordan*
JANTUAN Stella
JAPARIDZE Tedo/Magradze Guguli
JENSEN Michael Aastrup
JENSSEN Frank J./Hagebakken Tore
JÓNASSON Ögmundur
JOVIČIĆ Aleksandar/Pantić Pilja Biljana
JURATOVIC Josip*
KAIKKONEN Antti/Anttila Sirkka-Liisa
KAMIŃSKI Mariusz*
KARADJOVA Deniza*
KARAMANLI Marietta
KARLSSON Ulrika*
KATIČ Andreja*
KAŹMIERCZAK Jan*
KIVALOV Serhii*
KLICH Bogdan/Borowski Marek
KLYUEV Serhiy/Pylypenko Volodymyr
KOÇ Haluk
KOLMAN Igor
KONRÁÐSDÓTTIR Unnur Brá/ Níelsson Brynjar
KORENJAK KRAMAR Ksenija
KORODI Attila*
KORUN Alev*
KOSTŘICA Rom
KOUNTOURA Elena
KOVÁCS Elvira
KOX Tiny
KRIŠTO Borjana*
KRYVITSKY Dmitry*
KYRIAKIDOU Athina
LE DÉAUT Jean-Yves*
LEBEDEV Igor*
LÉONARD Christophe/Crozon Pascale
LESKAJ Valentina
LEYDEN Terry
LĪBIŅA-EGNERE Inese*
LONCLE François*
LOUKAIDES George
L'OVOCHKINA Yuliya
LUND Jacob
MACH Trine Pertou*
MAGAZINOVIĆ Saša*
MAHOUX Philippe
MARIANI Thierry
MARKOVÁ Soňa/Holík Pavel
MARKOVIĆ Milica*
MATEU PI Meritxell
MATTILA Pirkko/Raatikainen Mika
MATUŠIĆ Frano
MAURY PASQUIER Liliane
McNAMARA Michael
MEALE Alan
MEHMETI DEVAJA Ermira*
MELNIKOV Ivan*
MENDES BOTA José
MENDONÇA Ana Catarina*
MESTERHÁZY Attila*
MIGNON Jean-Claude
MIßFELDER Philipp*
MITCHELL Olivia
MORENO PALANQUES Rubén
MOROZOV Igor*
MOTA AMARAL João Bosco
MULARCZYK Arkadiusz*
MULIĆ Melita
MYRYMSKYI Lev*
NACHBAR Philippe*
NACHTMANNOVÁ Oľga
NAGHDALYAN Hermine*
NEACŞU Marian/Florea Daniel
NÉMETH Zsolt*
NICHOLSON Emma*
NICOLETTI Michele
NIKOLAEVA Elena*
NIKOLOSKI Aleksandar
NYKIEL Mirosława*
OBRADOVIĆ Marija
OBRADOVIĆ Žarko
OEHRI Judith*
OHLSSON Carina*
O'REILLY Joseph
OROBETS Lesia*
OSBORNE Sandra*
PALACIOS José Ignacio*
PALIHOVICI Liliana*
PASHAYEVA Ganira*
PIPILI Foteini
POPESCU Ivan
POURBAIX-LUNDIN Marietta
PREDA Cezar Florin
PRESCOTT John
PUCHE Gabino
PUSHKOV Alexey*
REPS Mailis/Pakosta Liisa-Ly
RICHTROVÁ Eva*
RIGONI Andrea*
ROCHEBLOINE François*
ROSEIRA Maria de Belém*
ROUQUET René/Le Borgn' Pierre-Yves
RYABIKIN Pavlo*
RZAYEV Rovshan
SAAR Indrek
SANTANGELO Vincenzo/ Spadoni Maria Edera
SANTERINI Milena*
SASI Kimmo
SCHEMBRI Deborah*
SCHENNACH Stefan
SCHOU Ingjerd
SCHWABE Frank
SCHWALLER Urs
SEARA Laura
SEDÓ Salvador
SEKULIĆ Predrag
SELVİ Ömer
SENIĆ Aleksandar
ŠEPIĆ Senad*
SEYIDOV Samad*
SHERIDAN Jim
SHEVCHENKO Oleksandr
SIEBERT Bernd
ŠIRCELJ Andrej
SKARDŽIUS Arturas
SLUTSKY Leonid*
SOBOLEV Serhiy
STEFANELLI Lorella
STOILOV Yanaki*
STRENZ Karin*
STROE Ionuţ-Marian*
SUDARENKOV Valeriy*
SYDOW Björn*
SYMONENKO Petro
TAKTAKISHVILI Chiora
TIMCHENKO Vyacheslav*
TOMLINSON John E.
TRIANTAFYLLOS Konstantinos
TUDOSE Mihai*
TÜRKEŞ Ahmet Kutalmiş
TÜRKEŞ Tuğrul
TZAVARAS Konstantinos
UMAKHANOV Ilyas*
VÁHALOVÁ Dana
VALAVANI Olga-Nantia/ Giannakaki Maria
VALEN Snorre Serigstad/ Godskesen Ingebjørg
VASILI Petrit
VECHERKO Volodymyr
VEJKEY Imre
VERHEIJEN Mark/Faber-Van De Klashorst Marjolein
VĖSAITĖ Birutė*
VIROLAINEN Anne-Mari
VORONIN Vladimir/Petrenco Grigore
VRIES Klaas
VUČKOVIĆ Nataša/Damir Šehović
WACH Piotr
WALTER Robert
WATKINSON Angela
WELLMANN Karl-Georg/ Benning Sybille
WERNER Katrin*
WOLD Morten
WURM Gisela
ZECH Tobias*
ZELIENKOVÁ Kristýna
ZIMMERMANN Marie-Jo
ZINGERIS Emanuelis
ZIUGANOV Guennady*
ZOHRABYAN Naira/ Hovhannisyan Vahe
ZOURABIAN Levon
Vacant Seat, Cyprus*
Vacant Seat, ''The former Yugoslav Republic of Macedonia''*
Vacant Seat, United Kingdom*
ALSO PRESENT
Representatives and Substitutes not authorised to vote
David DAVIES
Maria GIANNAKAKI
Rait MARUSTE
Dimitrios SALTOUROS
Axel SCHÄFER
Spyridon TALIADOUROS
Bernard PASQUIER
Observers
Eloy CANTU SEGOVIA
Héctor LARIOS CÓRDOVA
Javier LOZANO ALARCÓN
Partners for democracy
Najat AL-ASTAL
Mohammed AMEUR
Nezha EL OUAFI
Omar HEJIRA
Bernard SABELLA