For debate in the Standing Committee see Rule 47

Pour débat à la Commission permanente – Voir article 47 du Règlement

Doc. 8343

10 March 1999

Budgets of the Council of Europe for the financial years 1999 and 2000

Report

Committee on the Budget

Rapporteur: Mr Giuseppe Aleffi, Italy, Group of the European People's Party

I.        Draft opinion

1. The Assembly welcomes the Committee of Ministers’ declaration of its willingness to deepen further its regular consultation with Assembly representatives on all issues of common interest in the budgetary and administrative fields, including as regards the fixing of the Organisation’s overall budget. However, the Assembly considers that the first experience with the new procedure has not been entirely satisfactory, in that it did not fully meet the Assembly’s expectations, as set out in Recommendation 1344 (1997). The Assembly indeed believes that its contribution on behalf of the budgetary and administrative affairs of the Organisation has over the years greatly helped the Committee of Ministers in identifying new priority areas. This is why the Assembly’s proposal to set up a small joint working group, composed of Assembly representatives and the Committee of Ministers, could be particularly helpful.

2.       The Assembly therefore reiterates its request to be more involved in the future in the preparation of the Organisation’s budget, in particular as regards its own budget (Vote III).

3.       The Assembly feels genuine concern over what it perceives as a certain lack of solidarity among member states as regards the scale of their contributions to the ordinary budget. Resolution (94) 31, by virtue of which the rate of contributions of the five Grands Payeurs has been reduced to only 12.80% of the ordinary budget, has served further to aggravate the situation of less well-to-do member states and to bog down the Committee of Ministers in time-consuming and sometimes divisive deliberations.

4. It welcomes the idea of introducing a revised budget structure and reporting system based on a clearer definition of priorities for the Organisation. No longer will the budget be a simple authorisation to spend, but rather a commitment to delivering specific services on the basis of a close linkage between objectives and resources allocated. However, the Assembly harbours the most serious misgivings as regards the appropriateness of applying a strictly results-based budgeting method to the Assembly, the Council’s political forum par excellence, without taking into full account its specific character and needs. Preserving the Assembly’s unique ability to respond quickly and aptly to new, unexpected challenges is indeed a priority.

5. The Assembly wishes to draw the Committee of Ministers’ attention to the importance it attaches to staff policies (flexible job management, leaving allowances, early retirement, and creation of temporary structural posts). In view of the vastly increased tasks and challenges facing the Council of Europe in the new, much wider membership, it is essential that it be able to rely on an independent, highly educated and motivated secretariat of the highest calibre.

6. With regard to the 1999 budget

The Assembly,

      i. notes with concern that the 1999 budget was limited to a minimum increase in resources, signifying a stabilisation in the general level of expenditure for the second year in a row. This budgetary trend, if prolonged, cannot but have a negative impact on the overall functioning of the Organisation;

      ii. is deeply concerned that, in the 1999 budget, most of the additional appropriations were allocated to the establishment of the new European Court of Human Rights. Given the budgetary implications of the Court’s growing financial needs for the Organisation’s various other sectors – Assembly, Congress of Local and Regional Authorities, Intergovernmental Programme of Activities, etc. - the Committee of Ministers should consider the possibility of making separate budgetary provision for the Court, as already asked for in Opinion No. 203 (1997). This would avert the risk of certain activities and priorities being adversely affected by the enlarged tasks entrusted to this newly-established body;

      iii. welcomes the Committee of Ministers’ decision to use the unspent appropriations in the 1997 budget for certain activities, in particular co-operation with the OSCE;

      iv. regrets that, for the second consecutive year, the Committee of Ministers did not see fit to meet the Assembly’s requests as regards its own budget (Vote III) amounting to some 5 MF but instead accorded it barely over 1 MF, and this at a time when the Assembly was entrusted with increasingly demanding tasks;

7.       With regard to the budgetary prospects for 2000

The Assembly

      i. hopes that, although the current prospect for the 2000 budget is zero real growth, the level of expenditure can be increased in order to avert the inevitable adverse effects on many of the Organisation’s activities that zero growth would have, including in priority fields;

      ii. reiterates its view that the Council of Europe must be given financial resources commensurate with the Organisation’s pan-European mission. One possibility to achieve this could be to create a special “Council of Europe” heading within national budgets, and another 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 asked for in Opinion No. 199 (1996);

      iii. encourages the Committee of Ministers to reach a rapid decision in favour of the establishment of a privately managed pension fund, as requested by Assembly Recommendation 1391 (1998), that would guarantee the payment of pensions to staff members. The savings reached as a result of the transfer from the French social security system to a private insurance scheme should, over the coming years, be used to make such a fund financially viable and self-sufficient;

      iv. supports the Committee of Ministers’ efforts to identify future priorities in the light of the recommendations contained in the report of Wise Persons, favouring a more rational use of resources;

      v. invites the Committee of Ministers to carry out a study on the possibility of introducing a two-year budgeting procedure, such as it exists in several other international institutions, with the aim of enabling the Organisation better to formulate and implement its activities, as previously asked in Opinions No. 199 (1996) and 203 (1997);

      vi. calls upon the Committee of Ministers to make special budgetary provision for covering the financial implications of their future political decisions, in particular the creation of the office of the Commissioner for Human Rights;

      vii. calls upon the Committee of Ministers to enhance the current co-operation between the Council of Europe and the European Union and to reinforce the secretariat stationed in Brussels.

II.        Explanatory report by Mr Aleffi

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 useful exchange of views the Rapporteur had with Mr Gianardi, Director of Administration, and representatives of the Finance Department. At the time of writing, no official document on the budgetary forecasts for the year 2000 was available to the Rapporteur.

3. Following the budgetary and administrative proposals made in 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 for two main reasons. First, the principle of zero-growth has characterised the Organisation’s budget in recent years, thereby hampering a progressive increase in the financial resources allocated to the Council as a whole. Secondly, the only clear strategy carried out so far by the Committee of Ministers has been an effort to rationalise and improve the use of available resources through re-deployment according to certain priorities and patterns of expenditure.

4. It therefore appears necessary to deepen further the dialogue between these two important bodies of the Organisation on all issues of common interest in the budgetary and administrative fields. Here, the Assembly’s Opinion can indeed help the Committee of Ministers to identify priorities and new challenges. The Rapporteur believes, however, that this mechanism for consultation should be more clearly defined and improved. Furthermore, he feels that in replying to Recommendation No. 1344 (1997), the Committee of Ministers only partially satisfied the Assembly’s request for more control over its own budget. He therefore takes this opportunity to reiterate this request.

5. As regards the establishment of a privately managed pension fund, the Rapporteur feels that an urgent decision should be taken by the Committee of Ministers concerning the allocation of 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 of 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.

6. In view of the radically enlarged membership of the Council of Europe, there is no reason to believe that the year 2000 will be in any way easier in budgetary terms than previous years. It is therefore essential, before presenting budgetary proposals, to make a careful evaluation of 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 allocation of resources will need to be met if fresh funds are to be obtained. Such a reform, if carried out correctly, could ensure smoother and more efficient functioning of the Organisation through a more flexible and targeted use of its overall and increasingly over-stretched resources.

7. However, 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 – must be seriously doubted. We should not throw the baby out with the bath water. It is time that such a method would be easier to use on the intergovernmental side of the Council of Europe, where directorates have clearly defined programmes, activities and objectives. In the case of the Assembly, however, a budget system of that kind could soon become a straitjacket, preventing it from taking necessary but unforeseeable political initiatives that are part and parcel of parliamentary life, and therefore from fulfilling its mission.

8. As regards the Assembly’s budgetary proposals for the year 2000, it may be considered crucial, in view of an increasing workload, for the Council of Europe, and in particular for the Clerk’s Office, to have greater means for retaining and motivating its highly qualified permanent staff and for hiring temporary staff for specific projects and activities.

9. The Rapporteur regrets that the 1999 budget is characterised by only a modest rate of real growth. Most of the additional appropriations have been allocated to the establishment of the new European Court of Human Rights. Given the nature of the work carried out by this important body and the budgetary implications of its growing financial needs for the Organisation’s various other sectors – Assembly, Congress of Local and Regional Authorities, Intergovernmental Programme of Activities, etc. - the Committee of Ministers should consider the possibility of making separate budgetary provision for the Court. This would avert 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 four more important budgetary matters. The first concerns the Extraordinary Budget reserved for building expenses, which registered a sharp decrease of over 13 MF in 1999. This sum ought to be re-established in order to cope with the growing costs related to existing Council of Europe’s building, which are becoming less and less adequate to meet the requirements of an enlarged secretariat and the Parliamentary Assembly‘s political groups.

11. The second matter relates to the additional costs associated with the ratification of Conventions by member States. This is creating an increasingly precarious strain on the Organisation’s resources, forcing it to make repeated, unforeseen provision to monitor the follow-up to these ratifications.

12. Third, there is the continuing enlargement process. The added cost in case of any additional member State is conservatively estimated at around 2.5 MF. However, the rates of contribution of over a third of the Council's member states are below this figure and sometimes do not even cover the salary of their judge on the European Court of Human Rights! It would therefore seem highly recommendable to review the criteria on which Resolution (94) 31 is based. A certain lack of solidarity among countries can be detected, as witnessed by the time-consuming and sometimes divisive deliberations of the Committee of Ministers. The revision of the Resolution in question should therefore take as its point of departure the possibility of having the wealthier member States go the extra mile.

13. The four point that needs to be raised 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 the existing resources would be sufficient to cover the cost of these new activities. However, this re-deployment exercise, to the extent it has taken place, has proved insufficient to ensure this. This is why it is particular urgent to make financial provision for the creation of the office of the Commissioner for Human Rights.

14. As regards future staff policies, in view of the vastly increased tasks and challenges facing the Council of Europe in the new, much wider membership, it is essential that it be able to rely on an independent, highly educated and motivated secretariat of the highest calibre. However, the Rapporteur feels that the Committee of Ministers, and in particular its Committee on Administrative and Budgetary matters, considers staff members as a heavy burden on the Organisation’s budget. The Council of Europe is a think-tank, not an organisation active on the ground (such as the OSCE), and its backbone is composed of motivated people. The enlargement of the Council of Europe have indeed brought about radical changes in the inner 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 path effectively blocked by zero-growth budget proposals, which de facto envisage neither creations of new posts nor upgradings of existing ones.

15. Therefore, despite the working hypothesis of zero growth for the 2000 budget, the Rapporteur cannot conceal his serious doubt whether the volume of the 2000 budget will be adequate to meet the Assembly’s growing duties and the implementation of the decisions and proposals of the 2nd Summit; in a nutshell, whether such a budget is consistent with the truly pan-European vocation of our Organisation.

Reporting committee: Committee on the Budget.

Reference to committee: Standing mandate.

Draft opinion unanimously adopted by the committee on 8 March 1999.

Members of the committee: MM. Goovaerts (Chairman), Theis, Koulouris (Vice-Chairmen), Aleffi, Anusz, Begaj, Ms Belohorska, MM Bojars, Bordas, Bulic, Buwitt, Caceres, Calin, Debono Grech, Duivesteijn, von der Esch, Gill, Gregory, Ms Jäger, MM Jonsson, Kittis, Lento (alternate: Corrao), Lotz, Ms Luhtanen, MM Luis, Matvienko (alternate: Yemets), Mautner-Markhof, Naydenov, Oorzhak, Plattner, Lord Ponsonby, MM Rise, Rupar, Schreiner, Soendergaard, Ms Stanoiu, MM Svoboda, Tekir, Zhirinovsky.

NB The names of members who took part in the meeting are printed in italics.

Secretary of the committee: Stefano Bertozzi