Doc. 10417

24 January 2005






The Third Summit

Opinion

Committee on Economic Affairs and Development

Rapporteur: Mr Kirilov, Chairman of the Committee on Economic Affairs and Development, Bulgaria, Socialist Group

I.        Introduction and background

The Political Affairs Committee of our Assembly has prepared an input into the Council of Europe’s Third Summit – to be held in Warsaw on 16 and 17 May 2005. The Bureau of the Assembly has asked five other committees, among them the Committee on Economic Affairs and Development, to make contributions to the comprehensive report of the Political Affairs Committee prepared by Mr Kosachev1 in the form of independent memoranda. The main conclusions and recommendations of these are then meant to be incorporated in the draft Recommendation which the Political Affairs Committee will present to the Parliamentary Assembly in January 2005, for subsequent transmission to the Committee of Ministers.

The present contribution is intended to serve as such an input. The Rapporteur thanks the Committee for its confidence in him as its Chairman, in appointing him to present its views as they relate to the Third Summit, and as best he understands them. It should, in this context, be pointed out that the proposals to follow are essentially limited to the goals for the Third Summit as set out by the Committee of Ministers and the intergovernmental mandate of the Council of Europe.2

2.       Four threats to Council of Europe values and European co-operation and integration: terrorism, economic crime, corruption and insufficient economic growth

Terrorism

The role of the Economic Committee in the fight against terrorism has mainly been in the field of stopping the financing of terrorist activities and tracing those responsible for it – for the most part leaving the political and legal aspects of the issue to the Assembly’s Committees on Political Affairs and on Legal Affairs and Human Rights respectively. 2

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Some progress has been reached, in the sense that numerous channels of financing have been identified and shut down, and many of those using them apprehended. However, the inventiveness of terrorists and their helpers is such that much more can and must be done to achieve even better results. The Economic Committee therefore asks for new initiatives in fighting the financing of terrorism, including areas such as through agencies posing as charities and via trade in diamonds and precious metals. The closer relations with non-Council of Europe countries in Europe’s vicinity called for in Mr Kosachev’s draft report are therefore particularly welcome.

Economic crime

Terrorism is closely intertwined with the world of economic crime, including corruption and organised crime. The latter is, in turn, an increasing threat to economic growth and long-term development in parts of the Council of Europe area. Various Assembly texts adopted in this field at the instigation of the Economic Committee over the past few years3 have led to many new initiatives on the part of the Council of Europe (including countering the risks posed to public health by counterfeit medicines) and in particular its Directorate General on Legal Affairs.

However, the wider picture gained by the Economic Committee as regards the situation in the field is that it in certain respects is worse than before, in that the gap is not narrowing – and indeed at times seems to be widening – between the countries most and those least afflicted by economic crime, thereby rendering more difficult their economic dealings with each other - such as in trade, financial flows and productive investment. European economic, political and social understanding risks suffering as a result.

Corruption

What has been said about economic crime holds also for deficient governance, leading especially to corruption. Corruption leads to flawed investment decisions and a generally poor investment climate, hampered trade, unfair and overly costly public procurement, administrative delays and uncertainty or indeed aversion on the part of business decision-makers, not to speak of the diversion of their time away from their normal work as they have to navigate in a corrupt business environment. The World Trade Organization, the European Bank for Reconstruction and Development, the OECD, the European Investment Bank, the IMF and the World Bank – all of which are close partners to the Economic Committee and the Assembly – therefore rightly place the aim of good governance at the very top of their agendas.

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2 Doc. Recommendation 1584 (2002) on “The need for intensified international cooperation to neutralize funds for terrorist purposes”; Doc. 9520; Rapporteur: Mr Marty, Switzerland, LDR).
3
See Doc. 9018; Recommendation 1507 (2001); Rapporteur: Mrs Squarcialupi (Italy, EPP/CD) and Doc. 7971; Resolution 1147 (1998); Order No 540 (1998) (Rapporteur: Mrs Degn (Denmark, SOC) and Recommendation 1673 (2004) on “Counterfeiting: problems and solutions”; Rapporteur: Mr Schreiner, France, EPP/CD.

The Summit should do the same and lay greater emphasis on the multiple facets of this challenge, going beyond the Council of Europe’s Guiding Principles and Criminal and Civil Law Conventions on the matter and supplementing the work of other institutions within its unique fields of competence.

Below-potential economic growth and its consequences for social cohesion.

The Council of Europe rightly places great emphasis on social cohesion and the Economic Committee has on many occasions expressed its wholehearted support for it. However, The Committee has also pointed out that social cohesion will in the ultimate analysis depend not only on economic wealth being shared equitably (and efficiently) in society but also on added economic resources being generated via economic growth. Social cohesion bereft of adequate funding will soon turn into social dissolution. Hence, measures to enhance economic growth – such as through continuing structural reform and by making sure that social cohesion policies support rather than detract from economic development – should more than hitherto inspire the Council of Europe’s Social Cohesion project.

3.        Concluding remarks. Europe’s role in a globalising world

A final word should be said about Europe’s solidarity with the rest of the world, and especially its poorer countries. Promoting democracy, human rights and the rule of law is not only right for the spread of these values as such, but also for the economic development in its widest sense (including an equitable sharing of wealth within countries) in developing countries, in line with the United Nations Millennium Development Goals. The Council of Europe’s European Centre for Global Interdependence and Solidarity (the “North-South Centre), with which the Assembly has indeed concluded a co-operation agreement aiming to draw on the Centre’s competence) should be fully used for this purpose and for that of fostering the dialogue between different cultures and civilisations.

The Economic Committee, in adopting the present contribution, also pointed to the role of the Council of Europe, acting in particular through its Parliamentary Assembly, in monitoring the activities of international organisations, especially at this time of rapid globalisation, in the way it is currently done vis--vis international organisations such as the OECD, the European Bank for Reconstruction and Development, the World Trade Organization, the International Monetary Fund and the World Bank. Certain members of the committee felt that such monitoring should also include an indication as to whether international organisations examined retain continued validity, or whether they should be reformed or closed down in the interest of the good use of tax payer money.

In conclusion, the following amendments to the draft Recommendation appearing in Doc. 10381 prov. are suggested:

In the draft recommendation, under 18.ii (Plan of Action):

-      sub-paragraph ii.a.E,       in the second sentence, after the words “terrorist threat as its primary task”, to add the phrase:

“, including its financing,”

-      sub-paragraph ii.d.D,       at the end of the sub-paragraph, after the words “on a Europe-wide scale”, to add the following phrase:

“and promoting policies to foster economic growth to improve Europe’s competitiveness in a globalised economy”

-      sub-paragraph ii. e., at the end of the sub-paragraph, after the words “monitoring the state of democracy in Council of Europe member states”, to add the following phrase:

“and assign high priority within those programmes to the fight against deficient governance and its companions corruption and economic crime”.

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Reporting committee: Political Affairs Committee

Committee seized for opinion: Committee on Economic Affairs and Development

Reference to committee: Doc. 10272; Ref. No. 3001 of 8 October 2004

Draft contribution approved by the Committee on Economic Affairs and Development on 21 January 2005



1 Doc. 10381 prov. of 21 December 2004 ; Rapporteur : Mr Kosachev, Russian Federation, EDG

2 See, for instance, Document CM (2004) 74 Final

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Doc. Recommendation 1584 (2002) on “The need for intensified international cooperation to neutralize funds for terrorist purposes”; Doc. 9520; Rapporteur: Mr Marty, Switzerland, LDR);

3 Doc. Recommendation 1584 (2002) on “The need for intensified international cooperation to neutralize funds for terrorist purposes”; Doc. 9520; Rapporteur: Mr Marty, Switzerland, LDR);

See Doc. 9018; Recommendation 1507 (2001); Rapporteur: Mrs Squarcialupi (Italy, EPP/CD) and Doc. 7971; Resolution 1147 (1998); Order No 540 (1998) (Rapporteur: Mrs Degn (Denmark, SOC) and Recommendation 1673 (2004) on “Counterfeiting: problems and solutions”; Rapporteur: Mr Schreiner, France, EPP/CD..