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Doc. 8672

20 March 2000

Budgets of the Council of Europe for the financial years 2000 and 2001

Report

Committee on the Budget

Rapporteur: Mr Bernard Schreiner, France, European Democratic Group

I.       Draft opinion

1. The Assembly, convinced that the Council of Europe does not possess the financial resources necessary to carry out its activities and that the major problem lies in the fact that the financing method established by Committee of Ministers Resolution (94) 31 has proved inadequate for ensuring a stable and sufficient flow of funds - particularly following the reform of the European Court of Human Rights and the creation of Office of the Commissioner for Human Rights – urges the Committee of Ministers to develop possible alternative ways of financing the Organisation, in particular as regards the introduction of a higher minimum level of contribution to the ordinary budget, covering the cost of a member state's membership in the European Court of Human Rights, and of a fixed-rate contribution for observer states.

2. The Assembly strongly deplores the rigid application of "zero real growth" even for the year 2000, which would have an undesirable impact on the overall functioning of the Organisation.

3. The Assembly draws the Committee of Ministers' attention to the Court’s ever increasing financial needs, which would adversely affect the Organisation’s various other sectors, including the Parliamentary Assembly, the Congress of Local and Regional Authorities of Europe, and the Intergovernmental Programme of Activities. The Committee of Ministers should consider making separate budgetary provision for the Court, as already proposed by the Assembly Opinions No. 203 (1997) and No 211 (1999). Without the identification of activities that could be abandoned, the Organisation's other important activities would inevitably be penalised in the medium term.

4. The Assembly expresses its strong disapproval of the decision by the Committee of Ministers to postpone the provision of the financial resources required to implement the activities and programmes to be conducted within the framework of the Stability Pact for South Eastern Europe, despite the fact that all member states have recognised that lasting peace and political stability can be achieved only through democracy and respect for human rights, the rule of law and political pluralism.

5. The Assembly wishes to voice its dissatisfaction with the existing budgetary procedure, involving as it does cumbersome and time-consuming meetings which very often yield meagre results. Given the undeniable shortcomings of this procedure, it would seem wise to consider a two-year budgeting procedure which would permit efficient and timely planning of activities, thus fostering a more rational use of resources on the basis of the established priorities. Adopting a new, streamlined budgetary method would also enable the Organisation to devise and implement its programmes more effectively and to concentrate more fully on its overall political strategy, as pointed out in the Assembly Opinions No. 199 (1996), 203 (1997) and 211 (1999).

6. The Assembly wishes to draw the Committee of Ministers’ attention to the importance it attaches to staff policy (flexible job management, mobility, leaving allowances, early retirement and creation of structural posts). Given the increased tasks and challenges facing the Council of Europe with its wider membership, it is essential that the Organisation be able to rely on an independent, highly qualified and motivated secretariat and that greater flexibility in the administration of the Council of Europe be introduced. It therefore invites the Committee of Ministers to develop appropriate suggestions in this regard. The Assembly also notes that the Organisation's expenditure on training is at present inadequate compared with other international organisations.

7. Within the framework of the Optimum Plan, the Assembly asks the Committee of Ministers to consider the possibility of decentralising human resources management in order to foster a systematic and efficient redeployment and reorganisation of human and material resources.

8. The Assembly wishes to underscore the importance of establishing a privately managed, financially viable and self-sufficient  pension fund, as requested in its Recommendation 1391 (1998) and Opinion No. 211 (1999), so as to guarantee the payment of staff members' pensions.

9. The Assembly is greatly concerned at what it perceives as a certain lack of solidarity among member states with regard to the scale of their contributions to the ordinary budget. Committee of Ministers Resolution (94) 31, by which the contribution rate of contributions of the five major contributors was reduced to only 12.75% of the ordinary budget, has merely aggravated the position of less wealthy member states and bogged down the Committee of Ministers in time-consuming, unfruitful deliberations.

With regard to the 2001 budget

10. The Assembly reiterates its view that the Council of Europe must be given financial resources commensurate with its pan-European mission. One way of achieving this would be to enter a special “Council of Europe” heading in national budgets; another would be to let the Ministries concerned, such as those engaged in social, cultural and legal activities, contribute to the financing of certain intergovernmental programmes, as already proposed in the Assembly Opinions No. 199 (1996) and No. 211 (1999).

11. The Assembly requests the Committee of Ministers to identify appropriate financial resources when taking up its own political initiatives.

12. The Assembly calls on the Organisation's member governments to ensure that future unspent budgetary appropriations in the ordinary budget as well as any savings identified by the Secretariat in the course of a given year are automatically put into an "intervention fund", which could be subsequently used to finance specific activities.

13. The Assembly, considering that the limited human and financial resources allocated to the Office of the Commissioner for Human Rights via internal redeployment are inadequate for fulfilling the Office's challenging tasks, urges the Committee of Ministers to increase the Commissioner's budgetary funds.

14. In the context of the imminent restructuring of the Council of Europe Secretariat and the perpetuation of the zero real growth approach, it would appear advisable to introduce a scheme, based on the Resolution 92 (28) establishing special measures to terminate the service of permanent staff. The Assembly believes that such a scheme would have the advantage of speeding up the renewal of the Organisation's human resources, promoting career advancement on the basis of merit, seniority and equal opportunities and introducing new nationalities into the Secretariat.

15. The Assembly recommends that the Committee of Ministers carefully examine the Council of Europe accommodation situation, as some departments already lack sufficient office space in relation to their needs. This problem would become even more acute with the expansion of the European Court of Human Rights, which might make it necessary to re-house a number of departments.

16. The Assembly welcomes the introduction of a revised budget structure and reporting system based on priorities, which will give the Secretariat greater discretion and responsibility in the management of programmes and budgetary resources. In view of the close link between objectives and resources, the Assembly feels that updated and more flexible financial and staff regulations should be envisaged in order to adapt procedures and working methods to this new management culture in the Organisation, particularly as regards the Assembly's specific character and needs.

17. The Assembly requests the Committee of Ministers to pay closer attention to the functioning of the treaty monitoring arrangements, particularly in the case of the European Social Charter, where a considerable increase in the work of the secretariat, compounded by a lack of new staff, has placed a growing strain on the existing human resources.

18. The Assembly asks the Committee of Ministers to review its current method of financing salary adjustments and to make separate provision for this item in the Organisation's future ordinary budgets.

II.        Explanatory report by Mr Schreiner

1. The Assembly’s annual reports on Council of Europe budgets have over the years provided parliamentarians with a fuller insight into the Organisation and its political evolution. The primary aim of these reports is to make recommendations on the Council’s activities with a view to examining the political implications of decisions taken by the Committee of Ministers with regard to the Organisation’s overall budget.

2. The present report takes into account the fruitful exchange of views the Rapporteur had with Mr Gianardi, Director General of Administration and Logistics, and representatives of the Finance Department. The Rapporteur wishes to underline that, at the time of writing, no official document on budgetary prospects for the year 2001 was available.

3. Following the budgetary and administrative proposals made in its Recommendations 918 (1981), 1155 (1991) and 1344 (1997), the Assembly notes with satisfaction that some progress has been made towards a more direct and genuine dialogue between its representatives and the Committee of Ministers on budgetary matters. Unfortunately, the early results were not entirely satisfactory as the principle of zero real growth has been a feature of the Organisation’s budget in the last three years, thereby hampering a progressive increase in the financial resources allocated to the Council as a whole.

4. The Rapporteur feels that the Committee of Ministers should urgently establish a privately managed pension fund, which will be maintained with the savings achieved by the switch from the French social security scheme to a private insurance scheme. This would not only ease the increasing burden represented by each state’s share of the cost of the scheme but also permit the Organisation to set up in coming years a financially sound, self-sufficient pension fund, safeguarding the acquired rights of staff members.

5. In view of the radically enlarged membership of the Council of Europe and the rigid application of zero real growth, it is vital to make a very careful evaluation of the Organisation's present and future needs. It can no longer be regarded as sufficient just to demonstrate optimum use of existing resources in order to obtain additional funds. A new structure of the Council of Europe, accompanied by more efficient working methods, could be crucial when it comes to convincing the Committee of Ministers of the need to increase the Organisation’s budget. High standards of efficiency and resources allocation will need to be met if fresh funds are to be obtained. Such a reform, if carried out correctly, could ensure smoother and more effective functioning of the Organisation through more flexible and better targeted use of its overall and increasingly over-stretched resources.

6. The appropriateness of applying a strictly results-based budgeting method to a political institution such as the Council of Europe – and, even more so, to its Parliamentary Assembly – has to be assessed in the light of its pan-European political vocation. Such a method could be easily applied to the intergovernmental side of the Council of Europe, where directorates have clearly defined programmes, activities and objectives. However, a budgetary system, that did not take into account the Assembly's specific character and needs could soon become a straitjacket, preventing it from taking necessary but unforeseeable political initiatives. Hence, it is of utmost importance to adapt procedures and working methods before introducing this new management culture in the Organisation.

7. As regards the Assembly’s budgetary proposals for the year 2001, it may be considered crucial, in view of an increasing workload, for the Council of Europe in general the Secretariat of the Assembly in particular, to have greater resources for retaining and motivating its highly qualified permanent staff and for engaging temporary staff for specific projects and activities.

8. The Rapporteur regrets that the 2000 budget reflects only a modest rate of real growth. Most of the additional appropriations have been allocated to the European Court of Human Rights, the Programme of Assistance for Developing and Consolidating Democracy (ADACS) and the Parliamentary Assembly, which are priorities for the Organisation.

9. However, in view of the nature of the work carried out by the European Court of Human Rights and the budgetary implications of its growing financial needs for the Organisation’s various other sectors – Assembly, Congress of Local and Regional Authorities of Europe, Intergovernmental Programme of Activities, etc. - the Committee of Ministers should consider the possibility of making separate budgetary provision for the Court. This would obviate the risk of certain activities and priorities being adversely affected by the enlarged tasks entrusted to this newly-established body.

10. Moreover, the Rapporteur wishes to draw the Committee of Ministers’ attention to three more important budgetary aspects. The first concerns the accommodation needs of the Council of Europe's Secretariat. It is clear that the enlargement process has de facto increased the number of people working for the Organisation. Yet a solution must be found very soon because the use of the Press Centre (EPIC), for which only a minimal charge is being made for the year 2000, can no longer be continued on these favourable terms. The Committee of Ministers is therefore left with the option of either buying the Press Centre or constructing a new building, which would effectively improve the precarious accommodation situation. It is only fair to point out, however, that the sum involved in this exercise is not inconsiderable (some 600 MF), especially at a time of budgetary stringency.

11. The second matter relates to the additional costs, in terms of human and financial resources, associated with the treaty monitoring arrangements. The problem is twofold. First, there is an urgent need to reinforce the Committee of Ministers' machinery for following up judgments of the European Court of Human Rights. Secondly, specific budgetary provision is required for a limited number of conventions whose monitoring systems are identifiable. Moreover, this critical situation will no doubt be further exacerbated by additional ratifications of the various conventions in the course of 2000 as a result of the accession of new member states to the Council of Europe. This is placing a serious strain on the existing over-stretched human resources.

12. The third remark that needs to be made is more general. In recent years many political decisions taken by the Committee of Ministers have not provided for the additional financial resources needed to implement them - the Committee no doubt assuming that rationalising and improving the use of existing resources would be sufficient to cover the cost of these new activities.

13. However, this redeployment exercise, to the extent that it has taken place, has proved insufficient for this purpose. It is therefore particularly urgent to make financial provision for the creation of the Office of the Commissioner for Human Rights, since the limited human and financial resources allocated to this important Office within the 2000 budgetary ceiling cannot ensure its smooth functioning.

14. As regards future staff policy, in view of the vastly increased tasks and challenges facing the Council of Europe with its new, much wider membership, it is essential that it be able to rely on an independent, highly skilled and motivated secretariat. However, the Rapporteur feels that the Committee of Ministers, particularly its Rapporteur Group on Administrative and Budgetary Questions, regards staff members as a heavy burden on the Organisation’s budget. The Council of Europe is a think-tank, not an organisation active in the field (such as the OSCE), and its backbone is composed of highly trained, motivated officials.

15. The enlargement of the Council of Europe has indeed brought about radical changes in the internal working conditions, with more responsibilities and a greater workload for all staff members. It is therefore all the more surprising that the Council of Europe staff should find their career paths blocked by zero real growth budget proposals, which de facto envisage neither creations of new posts nor upgradings of existing ones.

16. Therefore, despite the working hypothesis of zero growth for the 2001 budget, the Rapporteur cannot conceal his serious doubts about the 2000 budget's adequacy for carrying out the Assembly’s expanding tasks and implementing the decisions and proposals of the 2nd Summit of Heads of State and Governments. In short, he wonders whether such a budget is consistent with the truly pan-European vocation of our Organisation.

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Reporting committee: Committee on the Budget.

Reference to committee: Standing mandate.

Draft opinion unanimously adopted by the committee on 9 March 2000.

Members of the committee: Mr Lotz (Chairman), MM Koulouris, Aleffi, Soendergaard (Vice-Chairmen); Mrs Angelovicova, MM Annemans, Anusz, Begaj, Bojars, Bordas, Bulic, Buwitt, Caceres, D’Aron, Debono Grech, Duivesteijn, von der Esch, Frey (Alternate: Mr Gross), Grass, Gregory, Ivanov, Mrs Jäger, MM Kittis, Lento, Mrs Luhtanen, MM Luis, Matvienko, Naydenov, Oorzhak, Lord Ponsonby (Alternate: Mrs Jones), Mrs Ragnarsdottir, MM Rise, Rupar, Schreiner, Mrs Stanoiu (Alternate: Mr Badulescu), MM Svoboda, Telek, Zhirinovsky.

N.B. The names of those members present at the meeting are printed in italics.

Secretary to the committee: Stefano Bertozzi.