Presentation of the CEB, the Council of Europe’s development bank.
The CEB is a multilateral development bank with an exclusively social vocation. By providing technical and financial expertise to projects with a strong social impact in its member countries, it actively promotes social cohesion and strengthens social integration in Europe. The CEB is a major instrument of solidarity policy in Europe. It helps to finance social projects, intervenes in emergency situations and contributes to improving the quality of life of the most disadvantaged population groups’. (source: Council of Europe).
Below is an article written by Sandrine Gaudin, Vice-Governor for Financial Strategy at the CEB, published in issue 249 (July-September 2024) of Germany Today, available on the CEB website, translated.
“Social Europe: a gradual deepening over the course of European integration, particularly in the wake of the crises
As early as 1957, the Treaty of Rome provided for the creation of the European Social Fund to ensure the economic and social progress of Europeans, initially to finance the retraining of workers and their mobility between Member States. During the energy crisis of the 1970s, the Member States adopted a social action plan to regulate company restructuring, protect workers’ health and safety and ensure equality between men and women, a principle that is included among the rights and values protected by the Treaties. However, it was the Delors Commission (1985-1995) that stepped up European action in the social field and set up European social dialogue with the Val Duchesse meetings, thus contributing to the formation of European social dialogue structures.
In the 1980s, the fight against unemployment became a collective priority, and the Single European Act of 1986 paved the way for new tools, notably the European aid programme for the most disadvantaged, essential in France for the smooth running of many charities, including the Restos du Cœur. The Treaty of Amsterdam, signed in 1997, devotes a chapter to employment policy and establishes the principle of a European employment strategy implemented through the coordination of national policies in the same way as economic policies are coordinated. From now on, each national reform programme presented annually by all the Member States with a view to ensuring this coordination must detail the employment and social policies developed at national level.
In 2017, a social summit bringing together the Heads of State or Government and the European social partners was held in Göteborg and adopted the European set of social rights, comprising 20 social principles towards which Europe must strive. In Porto in 2021, another major social summit adopted three objectives for 2030: employment for at least 78% of 20-64 year-olds; participation in training activities for at least 60% of adults each year; at least 15 million people at risk of poverty or social exclusion
The COVID pandemic in 2020 gave the EU the opportunity to take a quantum leap forward in the mutualisation of the management of the consequences of unemployment, through the SURE joint borrowing mechanism, which makes it possible to finance measures to safeguard jobs and short-time working schemes. The Next Generation EU recovery plan, worth €750 billion in grants and loans to Member States, financed by a common loan for the first time, includes a major component for financing measures linked to social resilience, social cohesion and vocational training. History will record that this federal leap was taken to ensure social cohesion in the midst of a pandemic.
European regulations expanded to cover a wide range of areas
The corpus of European social regulations is extensive, even if most of them are minimum harmonisation texts, leaving the Member States a great deal of latitude in their implementation: working time, working conditions, health and safety at work, coordination of social security systems, posting of workers, accessibility of products and services for people with disabilities, etc.
Under the impetus of the six-monthly presidencies of the Council of the EU, Social Europe is making progress if clear priorities are set, which is not always the case. For example, during the French Presidency of the Council of the EU in the first half of 2022, three major negotiations were concluded: the introduction of minimum wages in Europe, gender equality on boards of directors and pay transparency. In 2023, the Spanish Presidency organised a tripartite summit between the EU and the social partners on 25 October 2023 in order to emphasise that the development of a European industrial policy should be accompanied by a social component for the benefit of workers. Similarly, in 2024, the Belgian Presidency wished to revive the tradition of the Val Duchesse meetings and held a tripartite summit in La Hulpe on 15 and 16 April 2024. An important declaration on the future of social Europe, referring to the European Pillar of Social Rights, was adopted unanimously by minus two States, Sweden and Austria, which believe that the strengthening of a social Europe may harm their national social model.
Recently, at the end of the European Parliament’s term in the spring of 2024, several social advances are to be highlighted: the recognition of people with disabilities, equal treatment between men and women, the status of digital platform workers, the duty of vigilance imposed on companies so that they respect social rights including in their relations with their subcontractors outside the EU
A range of financial instruments of a not insignificant overall amount for a so-called supporting European competence
The EU budget (2020-2027) provides for large amounts to finance social or vocational training expenditure in the EU. The European Social Fund, one of the oldest instruments, is endowed with 88 billion for seven years, of which 6.7 billion are allocated to France. To this must be added the professional retraining expenses provided for in the new Just Transition Fund and the ad hoc funds, such as those relating to the protection of refugees or assistance to the most disadvantaged. In addition to this funding aimed directly at social needs, it is necessary to add funds for candidate countries to join the EU, neighbourhood policy funds and pre-accession funds, which all have a social component. It is difficult to establish an overall amount of EU funding in the social field, but it must be possible to say that EU financial interventions are far from negligible, while European competence in this area is only a competence to support national policies.
A concomitant and complementary intervention through the financial instrument of the Council of Europe, the CEB
The CEB, which is increasingly cooperating with many international organisations and other international development banks, is one of the EU’s natural partners. With the European Commission, which is the main donor of the CEB, cooperation continues to intensify. The CEB relies on Commission funding to finance technical assistance and provide investment aid for the Bank’s projects, in particular by panning loans and donations. But the CEB can also co-finance projects with the European Investment Bank (EIB), whose mandate is more climate-oriented. 25% of the ECB’s interventions are carried out in partnership with the EIB, in the areas of education, local infrastructure, energy efficiency and local transport.
The CEB now occupies an important place in the financial architecture of European development by relying on the range of instruments provided for in the EU budget. Since 2000, when the first contractual agreement was concluded, the Commission has contributed EUR 699 million, or 75% of the total donations received by the CEB. The strong leverage effect, i.e. the high ratio between EU contributions and the projects supported by these funds, testifies to the positive impact of cooperation between the Commission and the CEB. To date, the total value of CEB projects that have benefitted from EU donations amounts to €2.9 billion.
These funds may be direct (allocated by different Directorates-General of the Commission, such as the Directorate-General for Employment or the Directorate-General for Home Affairs or the Directorate-General for Neighbourhood) or indirect, i.e. they pass through specific regional mechanisms or platforms. The best example is the Western Balkans Investment Framework (WBIF) created in 2008 and which allowed the CEB to pilot a regional housing program for displaced persons during the war in the former Yugoslavia, in conjunction with the UNHCR, the UN and the OSCE. Today, nearly 36,000 people have been able to benefit from it for a total amount of 238 million euros, thus financing nearly 11,300 homes.
In 2016, to help Türkiye meet the needs of refugees from Syria, the Commission created the Facility for Refugees in Türkiye (FriT) and endowed it with €6 billion. The CEB manages two projects to improve health care for refugees and for host communities in the amount of $140 million.
The CEB also relies on the budget guarantee facilities provided by the Invest EU instrument launched in March 2021 to stimulate sustainable investment, innovation and employment in Europe, by expanding the possibilities of the Juncker Plan. About 3 billion of this instrument with 46 billion is directed towards social investments. This guarantee allows the CEB to diversify the beneficiary partners (not only governments or public authorities, but also foundations, cooperatives and associations) and to take more risks, for example by financing actors in microfinance or the social and solidarity economy. With 159 million in EU guarantees, the CEB was able to start in 2023 a program with a loan portfolio of 370 million for social housing, training and microfinance. In total, €740 million of investments will be provided in co-financing with the EU. Thus, the CEB granted a loan of 13.5 million euros to the Auteuil Apprentice Foundation in France in 2023.
Regarding Ukraine, a candidate country for the EU and a member of the Council of Europe and the CEB, the new European financing instrument for Ukraine was adopted in the spring of 2024 and it amounts to a total of 50 billion euros, the CEB is eligible for pillar 2 which will support the private and public investments of development banks in donations (1.5 billion euros) and guarantees (7.8 billion euros) in particular for social, education, housing or health projects. The use of this new financial facility will amplify the CEB’s efforts in favour of Ukraine (to date, 100 million in loans in the field of health, especially mental health, and 2 million donations to support small repairs to damaged housing).
Many EU policies (climate transition, digital transition, social cohesion, the fight against homelessness, welcoming migrants and refugees, assistance to candidate countries, support in the event of natural disasters, support for the resilience and reconstruction of Ukraine, etc.) resonate with the CEB’s mandate.
The EBB’s expertise is invaluable in extending EU action, helping to add value to EU funding or to intervene in areas where the EU has little presence to date, such as the financing of social housing.
The CEB, although it targets its funding in a number of Member States with the highest development needs (Central and Southern Europe in particular), operates in all the CEB Member States. And social housing has been one of his priorities for many years. Thus, the CEB financed several social housing programs for low-income people in Lower Saxony in 2017 (loan of 72 million euros from NBank), in 2019 in Brandenburg to finance social and municipal infrastructure as well as social housing for vulnerable populations, such as migrants and refugees, disabled people, the elderly and families with young children (loan of 150 million euros to LBBank). In 2024, a €100 million loan from the CEB will support the expansion of the services of Berlin’s largest municipal housing company, HOWOGE Wohnungsbaugesellschaft mbH, to provide 1,394 additional affordable and modern social housing units as part of its new construction initiative. In France, the CEB relies on its former cooperation with the CDC and in particular ADOMA to contribute to the financing of housing for the most vulnerable.
The announcement by the newly elected Commission President Ms. von der Leyen on 18 July to appoint a Commissioner in charge of housing issues is an important new direction for the EU and a new opportunity for cooperation between the EU and the CEB.
As was recalled in Vilnius last June during the celebration of the 25th anniversary of the European Social Charter of the Council of Europe, the role of the CEB is essential in operationalising and realising the basic social rights enjoyed by Europeans under the Treaties on European Union or under the European Social Charter of the Council of Europe, such as the right to education, the right to health, the right to housing, the right to access drinking water.
Social Europe is based on a foundation of social rights that are unique in the world and effective through collective action. It is indeed the harmonious combination of public policies and national resources, of financial instruments of the EU (Commission and European Investment Bank) and the CEB, but also the impetus of civil society and the social partners who promote social progress in Europe with unparallelled ambition and means compared to the rest of the world.”