Noel Treacy (Galway East, Fianna Fail)

Is cúis áthais dom bheith ar ais i Seanad Éireann le freastal ar an Bhille tábhachtach seo, an Bille um Banc Forbartha Comhairle na hEorpa 2004. Tá mé ag súil leis an díospóireacht agus an pháirt a ghlacfaidh na Seanadóirí uilig. This Bill provides for Ireland's membership of the Council of Europe Development Bank. The CEB is the oldest international financial institution in Europe and the only one with an exclusively social vocation. Its activities are targeted to emergency projects and to strengthening social cohesion in Europe. The CEB is the financial instrument of the policy of solidarity, developed by the Council of Europe over the years. The Government views the Council of Europe Development Bank as a valuable expression of that solidarity and of social cohesion in a wider Europe. Although Europe is one of the most developed regions of the world, there are still large pockets of poverty. This is where the Council of Europe Development Bank assists in development. It acts first and foremost in favour of the most vulnerable and fosters balanced social development in the fields of health, education, social housing and employment. The bank is valued in EU member states, in particular by the countries of central and eastern Europe, as an important source of lending for social projects. Ireland's accession to the bank will be viewed positively by these states as a reflection of our commitment to wider European solidarity.

The bank is a multilateral development institution, placed under the supreme authority of the Council of Europe. It nevertheless has its own full legal status and financial autonomy. By granting loans, the bank participates in the financing of social projects, responds to emergency situations and thus contributes to improving living conditions and social cohesion in the less advantaged regions of Europe. It is an appropriate time for this Bill to come before this House as it gives a further signal that Ireland welcomes the accession of the new member states into the EU and displays our willingness to play our part fully in the new Europe.

The current subscribed capital of the bank is just over €3 billion, but only 11% is paid in. The balance is designated as callable capital, but it is most unlikely that this will ever be called on. Ireland would provide subscribed capital of €30.515 million. The paid-in capital contribution for Ireland would be €3.369 million. When joining, Ireland must also pay a contribution to the bank's accumulated reserves of €9.764 million. Its full contribution paid in capital and contribution to the reserves, amounting to €13.1 million, will be paid in four annual equal instalments of €3.283 million each. Provision for these costs is being made in the Bill.

Set up in 1956 and originally named the Council of Europe Resettlement Fund for National Refugees and Over-Population in Europe, the fund started out with just eight members. A number of EU member states joined over the subsequent 25 years. However, with the change in the political landscape in Europe in the early 1990s, the influx of new members over the following ten years reflected the growing interest in the bank. The new member states of the EU and former members of the Soviet Union brought the membership up to 37 different countries. In 1999, the name was changed to the Council of Europe Development Bank.

The primary purpose of the bank is to help in solving the social problems with which European countries are or may be faced as a result of the presence of refugees, displaced persons or migrants consequent upon forced movements of populations as a result of natural or ecological disasters. However, in recent years the bank has expanded its operations to support projects relating to social housing, health, education, rural modernisation, support for SMEs and the improvement of the quality of life in disadvantaged urban areas and the protection and rehabilitation of historic heritage. It is the only European development bank with a social purpose. Its activities are targeted primarily to emergency projects and to programmes directed at strengthening social cohesion throughout Europe. The bank provides loans and guarantees, not subsidies, to its member states, to local authorities and to financial institutions. Its loans are intended for the implementation of social projects which thus enjoy the benefit of favourable financial conditions. Since the bank receives no annual contributions from its members, its financial activity is based on its paid up capital and reserves and the resources it raises on the financial markets. Since its inception in 1956, the bank's capital has been increased regularly to sustain the development of its activity while, at the same time, preserving its financial soundness. The bank does not receive any other aid, subsidy or budgetary contributions from member states to finance activities. The necessary resources are, therefore, raised on the international capital markets in the form of borrowings.

For its borrowing activity the bank has been rated by Moody's since 1988, Standard and Poor's since 1989 and Fitch Ratings since 1996. It enjoys the maximum AAA rating with all three agencies on its principal long-term debt. To ensure that it maintains access to the funds needed to pursue its activities the bank continues to have recourse both to large-scale borrowings in major currencies aimed at a broad range of institutional investors and to issues in given currencies or with specific structures.

To obtain financing from the Council of Europe Development Bank the projects presented must meet the following general criteria: compliance with Council of Europe conventions; respect for the environment on the basis of international conventions and compliance with standards of quality; participation in the financing of projects may not exceed 50% of the total eligible cost, the balance of which may be co-financed by other international institutions; and compliance with bidding procedures in accordance with national and international directives.

Since 1994, the bank's circle of member states has widened to include a large number of new states, including European Union member states and former republics of the Soviet Union. Some 14 states have joined since 1994. The policy developed by the bank is aimed at strengthening its activities in the new member states by contributing to their economic and social development and reducing inequality. It has introduced innovative instruments to meet the specific needs of each country. Some €1.804 billion, spread over 66 projects in 14 countries, has been lent to the new member countries since 1995. Loans are issued on favourable terms, with a deferred repayment period being carried on, for example, in the form of long-term loans.

The sectoral breakdown of approved projects illustrates the bank's capacity for action, not only in its statutory priority sectors but also in health and education infrastructure, employment, vocational training and employment in small and medium enterprises and the Roma community. The bank has adjusted the eligibility criteria as a consequence of the strategy for supporting the social housing sector, which has particular characteristics in the new member countries. The total of disbursements made in favour of the new member countries in 2000 was higher than the total made during the previous five years.

The bank has signalled its intention to become the reference financial institution for the Balkans on the question of refugees and migrants. It has become heavily involved in the work of the stability pact for south-eastern Europe. One of the pact's priorities concerns refugees and specific attention is being paid to the Roma community. For example, the bank approved a €30 million project in 2000 for the construction of housing in Croatia aimed at facilitating the return and integration of refugees.

Strengthening social cohesion means contributing to solving the unemployment problem in the first instance and the Council of Europe Development Bank has adopted two lines of action to that end. It promotes the creation and preservation of jobs and supports investment in SMEs, which are the principal source of new jobs and vocational training.

Action in favour of employment is one of the bank's new priorities. It has financed several projects aimed at the preservation and creation of jobs in small and medium-sized firms in many countries. The governing board sets out the general orientation of the bank's activity, lays down conditions for membership and decides on capital increases. It approves the bank's annual report, accounts and general balance sheet. The board consists of a chairman and one representative from each of the bank's member countries.

The administrative council exercises the powers delegated to it by the governing body, establishes and supervises operational policies and approves investment projects submitted by governments. It votes on the bank's operating budget. The governing board elects the chairman. The governor, who is the bank's legal representative, heads up its operational services. He is responsible for the bank's staff, under the general supervision of the administrative council, and conducts the bank's financial policy in line with the administrative council's guidelines. He represents the bank in its transactions and examines the technical and financial aspects of requests for financing to the bank. The auditing board consists of three members who are appointed by the governing board. It checks the accuracy of the annual accounts which will also be examined by an external auditor.

I reiterate the Government's view that the Council of Europe Development Bank is an important part of the operations of the Council of Europe. I pay special tribute to Senators who, with their colleagues in Dáil Éireann, have given and will continue to give distinguished service on the Council of Europe and support all its activities, including the continuing enhancement of the role of the Council of Europe Development Bank.

The Council of Europe Development Bank plays a vital role in the new and expanded Europe. Ireland's membership of the bank at this time is a valuable expression of our solidarity with the new and expanded Europe at an exciting and historic period for the growing European Union. I commend the Bill to the House and look forward to the ensuing debate.