Opening Remarks by Carlo Monticelli at Standing Committee of the Council of Europe Parliamentary Assembly

As prepared for delivery

Riga, Latvia, 26 May 2023

President Kox, 
Vice-Presidents,
Chairpersons,
Chairperson of the Latvian delegation to the Assembly, Madame Zanda Kalniņa-Lukaševica,

I am honoured and delighted to be here today to address the Standing Committee of the Parliamentary Assembly for the first time as the Governor of the Council of Europe Development Bank, the CEB.

The CEB is the oldest multilateral development bank in Europe, and the only one with an exclusively social mandate. 

It was founded in 1956 by eight of the Members of the Council of Europe to help alleviate social needs in the aftermath of the Second World War. 

Over time the CEB’s membership has widened and now it includes 42 countries from all across Europe. We look forward to a further expansion of our membership, as stated in the PACE’s Recommendation on European Solidarity from March 3. In this context, the upcoming accession of Ukraine is a very important and much-welcome step. 

The CEB has been continuously adapting to the changing context in which it operates. It has developed new tools and instruments to meet member states’ needs. Yet it has remained fully focused on its original mandate, while avoiding any “mission creep”, as the expression goes. 

In line with its unwavering commitment to its mission, the CEB stands ready to continue supporting effectively displaced persons and refugees, in particular those who fled Ukraine, thereby providing material follow-up to the Resolution adopted by PACE. 

But before describing in more detail how the CEB has supported Ukraine and its current priorities, allow me to offer a few remarks on the way the CEB operates.

We finance investments in key social sectors, such as education, health, social housing, and more.

Thanks to an excellent credit rating, the CEB is able to raise funds in international capital markets on very favourable terms. This financial advantage is fully passed on to its borrowers, thus benefitting governments, local and regional authorities, non-profit organisations and, ultimately, the users of social services. 

In addition, the CEB raises funds from donors to provide extra support to projects with high social impact. 

As a social bank, the CEB approves all its projects according to strict sustainability criteria and focuses on meeting the needs of the most vulnerable. 

Importantly, the CEB upholds the core values of the Council of Europe across all of its activities and maintains strong ties with its parent institution.

The CEB member states are facing a succession of daunting challenges: from the COVID-19 pandemic to the unfolding climate emergency, and the Russian aggression against Ukraine, not to mention the impact of these crises on our economies.

While very different in nature, these crises share one salient feature: they affect vulnerable people the most and erode Europe’s social fabric. 

Underinvestment in social sectors makes matters worse, depriving the most vulnerable of adequate safety nets. The CEB’s mission is more relevant than ever.

In 2022 the CEB stepped up its efforts and achieved extraordinary results on three critical fronts:

First, the CEB devoted one third of its overall lending, €1.3 billion, to support member countries that host refugees from Ukraine. In addition, Ukraine requested to join the CEB, which responded quickly, offering the possibility of accession at no cost – indeed a very strong sign of solidarity.

Secondly, the CEB’s members endorsed the new five-year Strategic Framework which lays out an ambitious set of objectives in line with its social mandate and today’s pressing challenges.

The Strategic Framework is underpinned by the third milestone achievement of 2022: a capital increase. This decision was momentous. For the first time its history, the Bank will receive an injection of fresh resources. This confirms the CEB’s continued relevance and the confidence that shareholders place on its capacity to deliver. Testimony of the importance of this achievement is provided by the decision by Moody’s to upgrade the CEB’s to triple A. 

In addition to these achievements, the CEB has reinforced its participation in key international networks and leveraged strategic partnerships, including with the EU. As an example, let me cite our participation in the InvestEU Programme, which will be instrumental for mobilising around half a billion euros in loans for highly social projects – loans which would not have been financed otherwise.

Overall, in 2022, the CEB approved 36 projects, amounting to more than €4.2 billion, across 16 countries. It maintained a solid operational and financial performance, notwithstanding an exceptionally challenging economic and financial environment. 

The CEB also consolidated its position as a pioneer and leader in the market for social bonds. In 2022, it was the very first international financial institution to issue social inclusion bonds directly targeted to Ukraine’s refugees and to complete a full 7-year curve. Our leadership was recognised with various awards conferred by market participants. 

The year ahead promises to be a momentous one too. We are gearing up to initiate operations in Ukraine soon, with a distinct focus on social sectors and vulnerable people. Our Strategic Framework envisages a volume of €200 million this year, which is set to increase gradually to about €400 million per year by 2027. 

To be fully operational from day one, we are already closely coordinating with the Ukrainian authorities and peer institutions, such as the World Bank, with whom we are envisaging parallel financing in the health sector. 

In addition to health, we will explore engagements in other sectors where needs are pressing and where the CEB can add the most value, such as social housing. 

Furthermore, following the devastating earthquakes in Türkiye in February, the CEB quickly mobilised financial resources, pledging €500 million at the International Donors’ conference co-hosted by the European Commission and Sweden in March. Already in April, at an extraordinary meeting, the Banks’ Administrative Council approved a €250 million loan. 

Finally, the CEB was pleased to participate in the 4th Council of Europe Summit of Heads of State and Government in Reykjavik this May, a very important event indeed. The Final Declaration recognises the CEB’s role in supporting Ukraine’s reconstruction efforts and addressing the social dimensions of climate change and environmental degradation.

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A consolidated ability to respond flexibly and rapidly to our member states’ needs is what makes the CEB the social development bank of choice for Europe. 

Let me conclude by reiterating my commitment to work with our member states, engaging with all of you, with the twin objectives of invigorating social cohesion and ensuring that no one is left behind: objectives which are essential for democracy, prosperity and peace. 

I thank you for your attention and I look forward to your questions.