Ministers’ Deputies
Notes on the Agenda

CM/Notes/1061/6.1 18 May 20091
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1061 Meeting, 17 June 2009
6 Social cohesion


6.1 Council of Europe Development Bank –

Report of the Governor for the financial year 2008

Reference documents
CM(2009)80

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Action

To take note of the Report of the Governor of the Council of Europe Development Bank for the financial year 2008 (document CM(2009)80).

1. The Chairman of the Governing Board of the Council of Europe Development Bank (CEB) transmits to the Committee of Ministers the report drawn up by the Governor of the CEB for the financial year 2008 (document CM(2009)80).2

2. As at 31 December 2008, the CEB’s subscribed capital stood at € 3.3 billion, whilst its total own funds were stable at € 4.7 billion, underlining the institution’s strong financial position. In addition, the CEB’s AAA rating, which enables it to raise funds on the most favourable terms, was again confirmed in October 2008, at a time of significant difficulties on the international financial markets.

3. 2008 saw the CEB’s continued compliance with the strategic orientations set forth in the Development Plan 2005-2009 and confirmation of the emphasis placed on the geographical redeployment of the Bank’s operations in favour of Central and Eastern Europe with 65% of project approvals for a total of € 1 201 million, and 70% of disbursements, totalling € 1 059 million, in favour of the target group countries.3

4. Following the launch of a strategic review in 2007 with the aim of enabling the CEB to respond still more effectively to the expectations of its member states, the Committee of Eminent Persons (CEP) presented its report to the Chairman of the Governing Board in October 2008. A Plan of Action providing different options and a timetable for implementing the CEP proposals is under consideration by the Bank’s Organs.

5. The year was further marked by continued strengthening of cooperation with international partners:

- on 2 June 2008 a Joint statement on Co-operation was signed between the CEB and the EIB focusing, in particular on: urban renewal and development, including social housing; job creation through SMEs; the environment; natural disaster prevention and rehabilitation; health; education and vocational training.

- on 31 October 2008, the CEB signed a new Memorandum of Understanding with the United Nations Development Programme (UNDP), that will enable a long-term financial cooperation and funding of social housing, educational and health projects for displaced people under UNHCR's mandate, primarily in European countries hosting large displaced populations so confirming the Bank’s long-standing cooperation with this specialised UN agency.

6. The CEB also followed with concern the events occurring in Georgia during August 2008 and the Administrative Council approved a number of donations in favour of the populations affected by these events for urgent projects to be implemented by the United Nations Agencies. In 2009 further donations were approved for projects to be implemented by the Council of Europe.

7. Lending continued in accordance with targets, focusing in particular on the social value added of the individual operations. The CEB also continued to diversify its actions: as at 31 December 2008, the Bank was active in 33 of its member states.

8. The volume of loans disbursed in 2008 amounted to € 1.505 billion covering 75 projects. The loans outstanding reached a total of € 12.4 billion at the end of 2008, the highest level since the CEB’s inception. Based on an average contribution of 40% per project, the CEB currently participates in the funding of social investments worth approximately € 31 billion.

9. In 2008, the CEB’s Administrative Council approved 39 new projects totalling € 1.861 billion allocated along the three major lines of action as follows:

- 66% for strengthening social integration, including aid to refugees, migrants and displaced populations, housing for low-income persons, job creation and preservation in SMEs, improving living conditions in urban and rural areas, and infrastructure of administrative and judicial public services;
- 17% for socially responsible management of the environment, including the prevention of natural or ecological disasters, protection of the environment and protection of historic and cultural heritage;
- 17% for developing human capital, including health, education and vocational training.

10. The CEB’s funding policy continued to be characterised by compliance with the objectives defined over the past years. In 2008, the CEB's issues totalled € 3.3 billion, up from € 2.9 billion in 2007.

11. The balance-sheet and accounts for the financial year 2008, presented in compliance with International Financial Reporting Standards (IFRS) were audited by the auditing firm PricewaterhouseCoopers Audit (Paris), acting as External Auditor,4 and certified by the Auditing Board of the CEB.5

12. In line with the recommendation by the Administrative Council, the Governing Board approved the balance-sheet for the financial year 2008, the profit and loss account and the Notes to the financial statements, discharged the Administrative Council from its responsibility for the financial year 2008 and endorsed the decision to allocate the net profits for 2008 (+ € 95 827 018) to the General Reserve.6

Financing assured: n/a

DRAFT DECISION

1061st meeting – 17 June 2009

Item 6.1

Council of Europe Development Bank –
Report of the Governor for the financial year 2008
(CM(2009)80)

Decision

The Deputies took note of the Report of the Governor of the Council of Europe Development Bank for the financial year 2008 (document CM(2009)80).

Note 1 This document has been classified restricted at the date of issue; it will be declassified in accordance with Resolution Res(2001)6 on access to Council of Europe documents.
Note 2 The Governor’s Report is prepared pursuant to Article XI, section 2, paragraph 3, of the Articles of Agreement. The Chairman of the Governing Board transmits it to the Committee of Ministers in accordance with the provisions of Article IX, section 5, paragraph 4, of the Articles of Agreement.
Note 3 Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Malta, Moldova, Montenegro, Poland, Romania, Slovak Republic, Serbia, Slovenia, “the former Yugoslav Republic of Macedonia” and Turkey.
Note 4 See conclusions of 25 February 2009, pages 99-100 of the Report of the Governor, document CM(2009)80.
Note 5 See excerpt from the report of 26 February 2009, page 101 of the Report of the Governor, document CM(2009)80.
Note 6 See Resolution 375 (2009), adopted at the 191st meeting on 6 April 2009, page 103 of the Report of the Governor, document CM(2009)80.


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