Ministers' Deputies / Rapporteur Groups
Rapporteur Group on Administrative and Budgetary Questions

GR-AB(2006)CB11 23 November 20061

Meeting of 16 and 17 November 2006


The Rapporteur Group on Administrative and Budgetary Questions (GR-AB) met on 16 and17 November 2006, with Ambassador Zoltan Taubner, Permanent Representative of Hungary, in the chair. The Group considered the following items in the light of the annotated agenda (document GR-AB(2006)31).

1. Draft Budgets for 2007

- General Budget: Ordinary Budget, Subsidiary Budgets – Services, Subsidiary Budget of the European Youth Centres, Subsidiary Budget for Publications, Activities carried over from 2006, Extraordinary Budget, Pensions, Budget of the European Youth Foundation (cont’d)
(CM(2006)146 vol1, CM(2006)146 vol1add1rev and CM(2006)146 vol1add2 and GR-AB(2006)24)

Ordinary Budget

1.1. The Chair invited the GR-AB to continue its examination of the draft budgets for 2007. He recalled that discussions on the draft Ordinary Budget were interrupted at the meeting of 7 November before examination of Vote VIII “Investment Expenditure” and Vote IX “Receipts”. He further recalled that in response to the group’s request, the Secretary General had distributed proposals for savings for an amount of €1.25 million, equivalent to the provision for the non-reimbursement of subsistence expenses for governmental experts; these were set out in document CM(2006)49 add.

1.2. In the exchange of views that ensued, delegations thanked the Secretary General for his proposals. A majority of delegations noted that they could accept the proposals in the light of the current budgetary context, although some said that they would have preferred not to cut activities. Some delegations said they would have found linear cuts across all activities preferable and they would find it difficult to support the proposed cuts in Chapter V: Culture and intercultural dialogue and Chapter IV: Social Cohesion, which formed part of the core activities of the Council of Europe. Other delegations, on the contrary, supported the focus of the proposed cuts and stated that they would find it difficult to support linear cuts. The Secretary General regretted that agreement had not been found as regards his original proposal to stop paying subsistence expenses to government experts, leaving him no option but to reduce the scope of certain sectors. The choice of these sectors best reflected the discussions which had been held over the past year on the Progress Review Report for 2005 and on the 2007 priorities, and it was difficult to reconcile opposing views in the current budgetary climate.

1.3. Summing up, the Chair noted that a majority could accept the Secretary General’s proposals, whilst noting that some hesitations had been expressed about those concerning the Programme of activities. He suggested that the idea of more linear burden sharing be borne in mind if further cuts were needed.

1.4. One delegation reiterated its support for the Budget Committee recommendation that the charges transferred from the Ordinary budget (cost of pensions’ administration and blood transfusion and organ transplantation activities) should be deducted from the base line of the Ordinary budget before calculating zero real growth (cf. paragraphs 14-16 of CM(2006)184). The Chair noted that, although the Budget Committee recommendation was in principle correct, little support had been expressed for this in the framework of the 2007 budget. This delegation also reiterated its proposal to use the French inflation rate, instead of the Euro-zone inflation rate. Some other delegations agreed that this possibility could be explored further.

* * *

VIII – Investments

1.5. In response to one delegation which suggested reducing investment expenditure in 2007, the Director General of Administration and Logistics recalled that the Ad hoc Committee of Experts on Buildings (CAHB) and the Budget Committee had expressed concern on several occasions in the past that additional costs would arise in the long term as a result of insufficient budgetary provision to ensure suitable maintenance and renovation programmes for buildings.

IX – Receipts

1.6. No delegation wished to comment on this Vote.

* * *

Service Budgets

1.7. Following an exchange of views on the three service budgets (translation, interpretation, and documents), the Chair invited the Secretariat to explore further gains in future years, possibly by a greater degree of outsourcing of translation, a more even spread of meetings throughout the year and making greater use of electronic means of distribution of documents.

Budget of the European Youth Centres
European Youth Foundation Budget

1.8. Noting the hesitations of one delegation, the Chair concluded that the group could recommend the adoption of these budgets. He invited those delegations who might still have queries unanswered to contact the Secretariat for further clarifications.

Subsidiary Budget for Publications

1.9. In response to a request for clarification, the Secretariat noted that the credit balance carried over from the previous financial year was in principle to finance the preparation of new publications for which sales receipts would be received in later years.

Activities carried over from 2006

1.10. No delegation wished to comment on this budget.

Extraordinary Budget

1.11. No delegation wished to comment on this budget.

Pensions Budget

1.12. In response to a suggestion that the split of employee/employer contributions to the pension fund be changed, the Secretariat explained that there were two pension schemes in force at the Council of Europe. When the second one was adopted in 2002, the question of applying the same split of the contributions as for the new scheme (40% employee/60% employer) to staff covered by the existing scheme (1/3 employee / 2/3 employer) had been examined. Following advice from legal counsel, it had been decided not to do so, as this would substantially modify the conditions of employment of existing staff. The Secretariat also recalled that the actual rate of contribution to the pension scheme was revised regularly on the basis of actuarial studies.

1.13. One delegation proposed that the cost of pensions’ administration (transferred from the Ordinary Budget in 2007) should be transferred back to the Ordinary Budget. The Chair noted that little support had been expressed for this proposal.

- Reports of the September and October 2006 Sessions of the Budget Committee
(CM(2006)165 and CM(2006)184)

1.13. The Chair noted that the group could recommend that the Deputies take note of the meeting reports of the September and October 2006 sessions of the Budget Committee, as they appear in documents CM(2006)165 and 184.

2. Remuneration adjustment method
(CM(2006)134, GR-AB(2006)20 and GR-AB(2006)27)

2.1. The Chair recalled his intention to continue discussion of the provision for salary adjustment (under Vote VII “Other expenditure”) in this context. He felt that discussions already held in the group had confirmed his impression that a majority of delegations supported staying in the coordination framework and preferred to explore possibilities for more flexibility within this framework, in particular by adopting an appropriately worded affordability clause. He recalled that he had invited delegations to continue reflection and contributions had been received from Switzerland (DD(2006)524), France (DD(2006)639) and the United Kingdom (DD(2006)639). The Chair also drew attention to document CM(2006)192 which sets out the result of the proposed method for 2007.

2.2. The Secretary General informed the group that the revised remuneration adjustment method (CM(2006)134) had been adopted (or would be adopted before the end of the year) by the five other coordinated organisations. In the case of the OECD, the method had been adopted by its Council with a transitional measure for 2007, whereby it had been agreed, following negotiations with its staff association, to phase in the positive effect of the purchasing power parity by awarding one half from 1 January 2007 and the other half from 31 December 2007. The Chair of the Staff Committee recalled that the recommendations emanating from the Coordination system where formulated by the representatives of the governments of member states. She added that the proposed method took into account the trends in the reference countries in real terms (ie the rate for each reference country was deflated by the national consumer price index) and therefore national austerity measures would be automatically reflected in the reference index.

2.3. In the exchange that ensued, a number of differing views were aired. A number of delegations stated that they were in favour of adopting the revised method, although some of these wished to look at how the result of the method could be applied more flexibly in 2007 following the example of the OECD. One delegation suggested that the method could be adopted and its application managed within the total appropriations for staff related expenditure to be set during the course of the budgetary discussions. One delegation considered that the revised method did not meet the criteria put forward by the Committee of Ministers in July 2004 (892/11.5) for achieving greater flexibility and less automaticity. In this context, this delegation proposed examining how greater flexibility could be achieved as regards the application of the new method, and suggested that the method be applied provisionally, until such time a solution could be worked out, possibly in the framework of an open-ended working group proposed by other delegations.

2.4. Summing up the debate, the Chair drew the following preliminary conclusions: although there was a tendency to question matters, the discussions had confirmed his impression that the majority of delegations wished to remain within the coordination system; there appeared to be a majority wishing to adopt the method, some had expressed hesitations, and one delegation had raised the possibility of adopting it provisionally for a limited period of time; an appropriate degree of flexibility should be sought in the application of the recommendations resulting from the application of the method; as regards 2007, there was strong reluctance to award the full adjustment as resulting from the method, over the 2.2% budgetary provision included in the draft budget and there was one concrete proposal to apply 1.9% based on the French (monthly) inflation rate.

2.5. In that light, he proposed to ask the Secretary General, as a matter of urgency, to start negotiations with the Staff Committee, bearing in mind the limited period of time; referring also to the agreement reached at the OECD, he noted that the Secretary General and the Staff Committee had listened carefully to the debate and had understood the intrinsic message. An open-ended working group could be set up to study the method, in particular the contributions received from delegations.

3. Co-ordinating Committee on Remuneration (CCR)- Turkey: special adjustment of remuneration at 1st August 2006 – 174th Report

Item postponed.

4. Unpaid contributions at 30 June 2006

Item postponed.

5. Other business


6. Date of the next meeting

Tuesday, 12 December 2006 at 3 p.m.

Note 1 This document has been classified restricted at the date of issue. Unless the Committee of Ministers decides otherwise, it will be declassified according to the rules set up in Resolution Res(2001)6 on access to Council of Europe documents.



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