Doc. 9386

20 March 2002

Budgets of the Council of Europe for the financial year 2003

Report

Committee on Economic Affairs and Development

Rapporteur: Mr Bernard Schreiner, France, European Democratic Group

I.        Draft opinion

1. After four years of budgetary austerity, the Assembly welcomes the additional resources made available to the Organisation in 2002. These new funds, representing a positive outcome of the Committee of Ministers’ budgetary discussions, will assist the Secretary General of the Council of Europe in pursuing his continuing, courageous efforts to streamline internal working methods, make better use of existing resources and provide additional funds for the four main priorities, identified by the Committee of Ministers in the aftermath of the Wise Persons’ report.

2. Given the Council of Europe’s specific role in the new institutional architecture of Europe, it is crucial that member states’ governments continue to give it the human and financial resources needed to finance a wide array of activities aimed at combating the growth of terrorism, organised crime, corruption and illicit trafficking, which are generating an unhealthy climate of insecurity in several member states. Furthermore, additional resources are necessary to fund other important activities, aimed at preserving peace, consolidating democratic institutions, fostering political pluralism, promoting respect for human rights and the rule of law, providing legal assistance and combating corruption and social exclusion.

3. The Assembly deplores the fact that the Committee of Ministers has not agreed to the measures proposed by the Assembly, in Opinion No. 224 (2001), to improve the Organisation’s precarious budgetary situation. These measures are:

i. co-ordinating the Organisation’s budgetary timetable with the national budgetary timetables of member states. In this regard, the Assembly believes that a study on prevailing budgetary procedures in the member states should be undertaken in the future. Such a change would enable governments to examine the Council of Europe’s budgetary needs in detail before taking any final decision on their forthcoming national budgets;

ii. given the major shortcomings and cumbersome nature of the current budgetary procedure, introducing a two-year system such as exists in other international organisations, as pointed out in Assembly Opinions Nos. 199 (1996), 203 (1997), 211 (1999), 218 (2000) and 224 (2001). This would enable the Organisation to plan and implement multi-annual projects, in particular as regards the consolidation of democratic institutions in central and eastern Europe, the protection of minorities and the fight against social exclusion;

iii. creating a special “Council of Europe” line within national budgets and allowing the ministries concerned, such as those responsible for cultural, educational, legal and social matters, to contribute to the financing of certain intergovernmental activities, as already requested in Assembly Opinions Nos. 199 (1996), 211 (1999), 218 (2000) and 224 (2001). Contributions to the Council of Europe come from allocations in the budgets of foreign affairs ministries labelled ‘contributions to international organisations’. The fact is that, in most Council of Europe member states the lowest rate of budget growth in recent years has been precisely in the foreign affairs ministries, which explains why the Council of Europe’s justified requests for budgetary increases have been frustrated over the last four years;

iv. reviewing the criteria set out in Resolution 94 (31) whereby the contributions of the five major contributors were reduced to only 12.60% of the ordinary budget, thereby aggravating the position of less wealthy member states. The Assembly continues to be greatly concerned at what it perceives as a certain lack of solidarity among member states. One option would be to use only Gross Domestic Product (GDP) per capita as a basis for calculating the contribution scales. An alternative proposal would be to amend Resolution 94 (31) by including a clause setting a minimum contribution to be paid by each member state. In this context, the Assembly wishes to underline that any possible change in the criteria set out in Resolution 94 (31) should not be used to reduce the Organisation’s overall budget ;

v. exploring additional methods of financing other than the traditional one of seeking increased contributions from member states;

vi. believing that the current, consensus-based, decision-making process of

the Committee of Ministers has the effect of frustrating any effort to increase the Organisation’s human and financial resources, the Assembly encourages the Committee of Ministers to modify its modus operandi, in particular when it comes to taking decisions on the Council of Europe’s budget.

4. Believing that its contributions in respect of the budgetary and administrative affairs of the Organisation have significantly helped the Committee of Ministers to identify new priority areas, the Assembly suggests that, in keeping with Recommendation 1344 (1997), joint decision-making powers be granted to the Assembly in setting the Organisation’s overall budget.

5. Having examined the Evaluation Group’s report to the Committee of Ministers on the European Court of Human Rights, the Assembly welcomes the additional financial resources given to the European Court of Human Rights in 2002. However, as already proposed in Assembly Opinions Nos. 203 (1997), 211 (1999), 218 (2000) and 224 (2001), the Assembly considers it essential to make specific budgetary provision for the European Court of Human Rights within the Organisation’s ordinary budget as the European body entrusted with the protection of human rights on our continent. Given the importance and scope of the Court’s activities and its ever-growing structural needs, increased obligatory contributions are required to ensure the smooth functioning of this important organ, even though voluntary contributions are welcomed. Expenditure under Vote IV covering the operation of the European Court of Human Rights could be the subject of a specific contribution from the justice ministries in member states.

6. The Assembly urges the Committee of Ministers to earmark adequate financial resources whenever it takes political decisions resulting in additional tasks to be undertaken by the Organisation. It welcomes the introduction in the 2002 ordinary budget of a Field Mission Reserve, amounting to € 1.5 million, which will enable the Council of Europe to react swiftly to unforeseen political developments. It encourages the Committee of Ministers to continue to make provision for this Field Mission Reserve, as the method of financing via voluntary contributions is inadequate to ensure the financial coverage of unforeseen, albeit necessary, expenditure. As a general rule, voluntary contributions are always generous at the start of a given project but tend to dwindle in subsequent years. It therefore encourages the Committee of Ministers to monitor the trend of member states’ voluntary contributions and consider their effect on the long-term work of the Organisation.

7. The Assembly recommends that the Committee of Ministers carefully consider all the financial implications of new accessions. It therefore asks the Committee of Ministers to pay closer attention to the rising costs associated with treaty monitoring arrangements, in particular where new accessions place additional strain on human and financial resources.

8. The Assembly welcomes the Committee of Ministers’ decision to start preparatory work on the construction of two new buildings to meet the secretariat accommodation needs of the Council of Europe and the European Pharmacopoeia.

9. The Assembly recommends that the Committee of Ministers carefully consider all the financial implications of the Organisation’s field offices, which form part of a strategy designed not only to better monitor the implementation and impact of the Council of Europe activities and programmes in the host countries, but also to develop further the Organisation’s co-operation with the countries concerned and other international institutions active in similar fields.

10. In view of the Council of Europe’s observer status with the United Nations General Assembly and its fruitful and long-standing co-operation with United Nations bodies and specialised agencies, the Committee of Ministers should consider how a permanent presence for the Organisation in New York could be established in the future.

11. The Assembly believes that - as part of the ongoing restructuring of the Council of Europe aimed at prioritisation of activities and rationalisation of working methods - the Committee of Ministers should increase the resources needed to enhance the Organisation’s communications impact, through technological developments, an updated and efficient network of media contacts and a multi-lingual publications strategy.

12. The Assembly urges the Committee of Ministers to establish, without further delay, regulations governing a complementary pension fund, as requested in its Recommendation 1391 (1998) and Opinions Nos. 211 (1999), 218 (2000) and 224 (2001), which would help member states meet their statutory obligation to pay the pensions of retired staff members.

13. Given the imminent introduction of a new staff policy, rightly initiated by the Secretary General, the Assembly recommends that the Committee of Ministers pay special attention to the principles of equal opportunity and fair geographical distribution in its future recruitment policy. The Assembly also asks the Committee of Ministers to take special measures, based on Resolution 92 (38), in respect of an early retirement scheme, in order to speed up the renewal of the Organisation’s human resources and to foster the systematic and efficient redeployment of staff.

14. In view of the ongoing negotiations on future salary adjustments for all five co-ordinated organisations - Council of Europe, European Centre for Medium-range Weather Forecasts, European Space Agency, NATO and OECD - the Assembly restates its view, already set out in Recommendation 1488 (2000), that an objective and mathematical method must be established in order to enable the Secretaries General of these five international institutions to recruit, retain and motivate highly trained, competent and independent staff. It is therefore crucial that staff remuneration remains competitive with regard to three recruitment markets, namely the private sector, national civil services and international civil servants, also including the European Union.

II. Explanatory memorandum by the Rapporteur

1. The Assembly’s annual opinions on Council of Europe budgets have over the years provided parliamentarians with a deeper 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 exchange of views which the Rapporteur had with representatives of the Administration. It is to be noted that, at the time of writing, few official documents on budgetary prospects for the year 2003 were available.

3. First of all, the Rapporteur welcomes the Committee of Ministers’ decision to start the necessary preparatory work on the construction of two new buildings in order to meet the legitimate office accommodation needs of the Council of Europe's Secretariat. One building will be used to redeploy staff members within the Organisation, while the second will solve the precarious accommodation situation of the European Pharmacopoeia. According to the preliminary timetable, these new buildings will be ready at the beginning of 2006. It is also important to underline that the construction sites, belonging to the City of Strasbourg, have been ceded to the Council of Europe for a token sum.

4. 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.

5. After four years of budgetary austerity, the Rapporteur welcomes the additional resources made available to the Organisation in 2002. These new funds, representing a positive outcome of the Committee of Ministers’ budgetary discussions, will assist the Secretary General of the Council of Europe in pursuing his continuing, courageous efforts to streamline internal working methods, make better use of existing resources and provide additional funds for the four main priorities, identified by the Committee of Ministers in the aftermath of the Wise Persons’ report. For the financial year 2002 these funds amounted to € 169 million, up from some € 163 million the previous year. The major share of this increase, however, has been allotted to the European Court of Human Rights.

6. Special attention must therefore be paid to ways of avoiding a situation where the European Court of Human Rights consumes the lion’s share of the Organisation’s resources – whether new or existing. This can hardly have been envisaged either by the founding fathers of the Council of Europe or by the authors of the Convention on Human Rights and Fundamental Freedoms, let alone by the various Council of Europe Summits of Heads of State or Government that have steadily added new tasks to the Organisation’s agenda. Moreover, the Rapporteur is convinced that the Court, being the European body entrusted with the protection of human rights throughout the continent, should receive increased obligatory contributions: these are essential if it is to meet its ever-growing structural needs.

7. In order to examine this pressing issue in detail, in November 2001 Mr Lotz, Chairman of our Sub-committee, convened an ad hoc meeting with Ambassador Justin Harman, Chairman of the Council of Europe Evaluation Group on the Court of Human Rights, Mrs Maud de Boer Buquicchio, Deputy Registrar of the European Court of Human Rights, Mr Bruno Haller, Secretary General of the Parliamentary Assembly and Mr Alan Todd, Head of the Finance Directorate of the Council of Europe, to discuss the findings of the Council of Europe Evaluation Group which on 27 September 2001 submitted a comprehensive report on the financial situation of the European Court of Human Rights.

8. In the course of that meeting, Ambassador Harman said, inter alia, that the estimated number of applications registered with the Court would be 14.655 in 2002 and 20.720 in 2005. Thus in the five-year period from 2000 to 2005 there would be an overall increase of nearly 100%. Immediate action was indispensable if the Court were to continue functioning and retain its credibility and authority. The Evaluation Group had concluded that by the target year 2005 a substantial increase in the staffing level of the Court would be required to deal with the heavier expected case-load. To cope with this unpredictable situation, the need for additional posts was estimated at 76 lawyers to process cases and 56 secretaries.

9. While welcoming the great interest taken by the Committee of Ministers in the financing of the European Court of Human Rights, the Rapporteur fears that further increases in the Court’s funding needs will be detrimental to those of other Council of Europe activities, given the persistent budgetary constraints. Moreover, the Rapporteur still wonders how the Committee of Ministers plans to meet the Court’s additional financial needs without damage to other important activities, which have over the last four years seen a sharp decrease in resources. Part of this problem lies in the prioritisation exercise carried out by the Committee of Ministers, which has proved insufficient to provide the Organisation with adequate funds.

10. Against this background, the Rapporteur wishes to underscore the inadequacy of the Council’s present financing mechanisms, which are progressively reducing the annual contributions of the five major contributors. Current scales of contributions reveal a certain lack of solidarity among member states. A growing number of member states are having great difficulty in keeping up with their annual contributions, a situation which has even prompted the Committee of Ministers to mention the possible application of Article 9 of the Council of Europe’s Statute. This article could be applied to any member state which has failed to fulfil all or part of its financial obligations for a period of two years, unless that failure is justified by exceptional circumstances.

11. The prolonged budgetary austerity has given rise to a striking disparity between the financial resources allocated to the Council as a whole and its growing commitments, as decided upon by the Committee of Ministers itself or by Council of Europe Summits. By way of example, in the intergovernmental co-operation sector funds have been internally reallocated towards the new multidisciplinary integrated projects in order to give priority activities more resources. For some activities, however, this exercise has not achieved the desired result.

12. Given the Council of Europe’s specific role in the new institutional architecture of Europe, it is crucial that member states continue to give it additional resources to finance activities aimed at combating the growth of terrorism, organised crime, corruption and illicit trafficking, which are generating an unhealthy climate of insecurity in several member states. Moreover, in the struggle against racism, anti-Semitism, xenophobia and intolerance the Council of Europe’s legal instruments should be further strengthened.

13. Although voluntary contributions are welcome additional resources for the Organisation, they cannot replace obligatory contributions in the financing of multi-disciplinary and multi-annual projects. In fact, voluntary contributions are always generous at the start of all programmes but tend to diminish in subsequent years. By way of example, activities in Kosovo, the Federal Republic of Yugoslavia and Chechnya, which were funded by voluntary contributions at the outset, are now mainly financed from the Organisation’s limited ordinary budget, thereby placing an additional strain on existing resources. This is all the more regrettable as strengthening peace and stability across our continent should be the main objective for all member states interested in making Europe a broad area of democratic security based on shared values. The Council of Europe’s expertise and experience in a wide range of co-operation sectors genuinely represent a unique asset among European political organisations.

14. In this context, it is important to point out that contributions to the Council come more or less entirely from allocations in the budgets of foreign affairs ministries for ‘contributions to international organisations’ or a similarly worded heading. The reason why the Council of Europe’s justified requests for budgetary increases have been frustrated over the last four years is therefore clear. The fact is that, in most Council of Europe member states the lowest rate of budget growth in recent years has been precisely in the foreign affairs ministries. The Rapporteur therefore believes that it is urgent to create a special “Council of Europe” line within national budgets and to allow the ministries concerned, such as those responsible for social, cultural and legal matters, to contribute to the financing of certain intergovernmental activities, as already requested in Assembly Opinions Nos. 199 (1996), 211 (1999), 218 (2000) and 224 (2001). In this way, expenditure under Vote IV relating to the operation of the European Court of Human Rights – if clearly identified as such - could be the subject of a separate contribution from the justice ministries of member states. Similarly, expenditure under Vote V, “Expenditure of the Congress of Local and Regional Authorities of Europe”, could be charged to the budgets of the ministries responsible for devolved government.

15. Another problem concerns Resolution 94 (31) fixing the scale of member states’ contributions to the Council of Europe ordinary budget. Contributions to the ordinary budget are based on a formula that mainly takes account of the population and GDP of member states, giving a weighting of 5 to GDP and 1 to population. With the accession of Georgia in 1999, the contributions of the five major contributors fell to 12.60% of the Organisation’s ordinary budget. This fact not only underlines a lack of solidarity among member states but also aggravates the budgetary position of less wealthy countries. One option would be to use GDP per capita in order to avoid situations where less wealthy countries have to contribute virtually as much as small, but rich, member states. This proposal would result in a Council of Europe funded in a way which fairly reflects the economic weight of each member state. An alternative proposal would be to amend the present resolution by including a clause setting a minimum contribution to be paid by each member state. In this context, the Rapporteur wishes to underline that any possible change in the criteria set out in Resolution 94 (31) should not be used to reduce the Organisation’s overall budget.

16. As regards the Assembly’s budgetary proposals for the year 2003 and against the background of its rapidly increasing workload, it is essential for the Council of Europe in general and 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. Moreover, fresh resources should be allocated to defending and promoting the Council of Europe’s fundamental values and principles through intergovernmental co-operation and assistance programmes, particularly in the constitutional, legal and democratic institution-building fields.

17. The Rapporteur wishes to draw the Committee of Ministers’ attention to three further budgetary aspects. The first concerns the additional costs associated with the launching of multi-disciplinary and multi-annual projects, the Organisation’s enhanced capacity to undertake action on the ground and treaty monitoring arrangements, including the improvement of the Committee of Ministers' machinery for following up judgments of the European Court of Human Rights. The recent political crises in several new member states have highlighted the urgency of financing programmes targeting activities relating to democratic security, where the Council of Europe’s achievements and expertise would be an asset. Specific budgetary provision is also required for the ongoing assessment of existing conventions. Additional ratifications of various conventions in the course of 2002 as a result of the accession of new member states will place serious additional strain on the Organisation’s already over-stretched human and financial resources.

18. The second comment relates to the Information Offices of the Council of Europe (IOCEs), which have been set up by the Committee of Ministers at the request of various central and east European countries. Their aim, inter alia, is to disseminate information on the Council of Europe, its activities, its working methods and standards, to help individuals, NGOs or political institutions to contact the Council of Europe, to contribute and support the implementation of co-operation programmes and other Council of Europe projects in the host countries, and to facilitate the co-operation of the Council of Europe with other international organisations active in similar fields. Although these offices play an increasingly important role in promoting the Council of Europe’ activities, the appropriations for 2001, covering the cost of 52 staff members and the operational expenditure of the 19 IOCEs active in 15 member states, were only € 1.7 million. These limited funds are not consistent with the increased tasks assigned to these IOCEs and should be increased in order to cover fully their growing administrative and operational costs.

19. The third remark that needs to be made is more general. In recent years many political decisions taken by the Committee of Ministers have made no provision 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 such new activities. Furthermore, the Committee of Ministers should carefully consider all the financial implications arising from the accession of new member states. In fact, assisting member States in coping with emerging social and political problems is an integral part of the Plan of Action adopted at the Strasbourg Summit in 1997. The purpose is to enable all European member states to participate on an equal footing in the European project.

20. Increasing the budgetary resources of the Council of Europe should become one of the Assembly’s main challenges vis-à-vis the Committee of Ministers in the years to come, in particular in the light of the Secretary General’s priorities for the Council of Europe from 2001 to 2005. The Organisation intends to plan and implement a number of activities, including inter alia the promotion and proper functioning of democratic institutions, the protection of minorities, the fight against terrorism, corruption, individual insecurity and social exclusion, the reinforcement of control mechanisms in the European human rights field, and the development of co-operation with the European Union, the OSCE and the United Nations. In view of the fruitful and long-standing co-operation with the United Nations and its specialised agencies, the Rapporteur believes that the Committee of Ministers should consider how a permanent presence for the Organisation in New York could be established in the future.

21. Given the budgetary prospects for the 2003 budget, the Rapporteur doubts not only whether the 2002 budget will permit the Council of Europe to carry out its expanding tasks and implement the decisions and proposals of the 2nd Summit of Heads of State and Government, but also whether the available resources are consistent with the Organisation’s new geographical scope, achievements and expertise. The Council’s key role of defending human rights and the rule of law gives it a political responsibility for Europe’s democratic, peaceful development. This important political responsibility must be given more substance, in particular through increased human and financial resources.

APPENDIX I

CONTRIBUTIONS OF MEMBER STATES

TO THE ORDINARY BUDGET FOR 2002

MEMBER STATES

% contribution

AMOUNT PAYABLE IN EUROS

Albania

0,12

202 800,00

Andorra

0,05

85 514,00

Armenia

0,12

202 800,00

Austria

1,95

3 300 739,00

Azerbaijan

0,20

340 028,00

Belgium

2,32

3 925 363,00

Bulgaria

0,27

462 384,00

Croatia

0,27

460 018,00

Cyprus

0,12

202 800,00

Czech Republic

0,68

1 142 947,00

Denmark

1,59

2 689 466,00

Estonia

0,12

202 800,00

Finland

1,18

1 997 580,00

France

12,60

21 300 591,00

Georgia

0,15

255 528,00

Germany

12,60

21 300 591,00

Greece

1,26

2 134 977,00

Hungary

0,61

1 036 139,00

Iceland

0,12

202 800,00

Ireland

0,80

1 359 098,00

Italy

12,60

21 300 591,00

Latvia

0,12

202 800,00

Liechtenstein

0,05

87 542,00

Lithuania

0,17

281 216,00

Luxembourg

0,16

271 752,00

Malta

0,12

202 800,00

Moldova

0,12

202 800,00

Netherlands

3,59

6 070 649,00

Norway

1,38

2 333 045,00

Poland

2,09

3 539 536,00

Portugal

1,13

1 914 094,00

Romania

0,79

1 334 424,00

Russian Federation

12,60

21 300 591,00

San Marino

0,03

42 588,00

Slovakia

0,28

478 439,00

Slovenia

0,21

356 590,00

Spain

5,70

9 636 718,00

Sweden

2,20

3 710 902,00

Switzerland

2,36

3 981 302,00

"the former Yugoslav Republic of Macedonia”

0,12

202 800,00

Turkey

3,00

5 065 606,00

Ukraine

1,41

2 377 661,00

United Kingdom

TOTAL

12,60

100,00

21 300 591,00

169 000 000,00

Reporting committee: Committee on Economic Affairs and Development.

Reference to committee: standing mandate.

Draft opinion unanimously adopted by the committee on 12 March 2002.

Members of the committee: Mrs Zapfl-Helbling (Chairperson), Mrs Stepova (Vice-chairperson), Mr Kirilov, Mr Blaauw (Vice-chairmen), Mr Adam, Mr Agius, Mr Agramunt, Mrs Akgönenç, Mr I. Aliyev, Ms Anderson, Mr Arnau, Mr Aylward, Mr Berceanu, Mr Billing,  Mr Braun, Mr Brunhart, Mr Budin, Mr Budisa, Mrs Burbiené, Mrs Calner, Mr Cerrahoglu, Mr Cosarciuc, Mr Crema, Mr Djupedal, Mr Elo, Mr Eyskens, Mr Felici, Mr Galoyan, Mr Grachev (Alternate: Ms Yarygina), Mr Gülek, Mr Gusenbauer, Mr Haupert, Mrs Hoffmann, Mr Hrebenciuc, Mr Jung (Alternate: Mrs Durrieu), Mr Kacin, Mrs Kestelijn-Sierens, Mr Kosakivsky, Mr Leers, Mr Liapis, Mr Lotz, Mr Makhachev (Alternate: Mr Slutsky), Mr Mateju, Mr Mikkelsen, Mr Mitterrand, Mr Naumov, Mr Palis, Mrs Patarkalishvili, Mr Pavlidis, Mr Pereira Coelho, Mrs Pericleous-Papadopoulos, Mrs Pintat Rossell, Mr Pleshakov, Mr Podgorski, Mr Popa, Mr Popescu, Mr Popovski, Mr Prokes, Mr Puche, Mrs Ragnarsdottir, Mr Ramponi (Alternate: Mr Rigoni), Mr Reimann (Alternate: Mr Marty), Mr Rivolta, Lord Russell-Johnston, Mr Schmitz, Mrs Schoettel-Delacher, Mr Schreiner, Mr Seyidov, Ms Smith (Alternate: Mr Banks), Mr Stefanov, Mr Suslov, Mr Tallo, Mr Texeira de Melo (Alternate: Mr Luis), Mr Valleix, Mr Walter (Alternate: Baroness Hooper), Mr Wielowieyski, Mr Wikinski

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

Head of Secretariat: Mr Torbiörn

Secretaries to the committee: M. Bertozzi, Ms Ramanauskaite and Ms Kopaçi-Di Michele