Statement by Mr. Rainer Steckhan
Council of Europe Development Bank

Mr. President / Chairman, Ladies and Gentlemen,

Thank you for giving me the opportunity to address you here.

The Council of Europe Development Bank is committed to participating fully in the joint efforts of the international community in favour of peace, democracy, stability and development for the countries in the South Eastern Europe, most of whom are members of our Bank.

The situation in South Eastern Europe is of particular concern for the CEB because refugees and displaced persons (Table I) are among its priorities for action. The situation of the refugees constitutes an element of instability and social tension that must be eased as rapidly as possible. It is clear that the international community as a whole must support these efforts.

I know that this vital question of refugees has now become one of the Stability Pact's first priorities. The Bank is already committed in this direction and will continue its action. In this context, the CEB is present and active in the Table I "Steering Group for the Refugees Return". For us, refugees means investments in housing, employment, access to health and education facilities. In September 2000, our Administrative Council approved a first large project for the amount of 30 million euros to finance housing for refugees in Croatia. Disbursements are already under way. We are confident that this project, that we are closely monitoring, will be a success.

In this sector also, the CEB has recently made exceptional donations in favour of the refugees in Kosovo and in Macedonia. The political changes that took place at end 2000 in the FRY now make it possible to envisage wide-scale action throughout the whole region. The CEB is making real efforts in establishing a new framework of intervention in this country as well.

Since the First Regional Funding Conference in Brussels (March 2000), the CEB has advanced towards fulfilling its commitment : at that time we announced a target of 300 million euros for a two year period. Today we have already exceed that target : our projects are making progress and disbursements are flowing.

• To date the total amount of projects approved by the CEB Board in the region stands at € 318 million.

This amount is distributed among 6 countries of the region. All the projects approved will have an impact on the social and economic development : 53 % concern social cohesion projects in the areas of housing, health and education, 27 % the return of refugees and displaced persons, 14 % environment , 6 % employment in SMEs.

Over the years to come, the Bank will continue to finance projects. That is projects supporting social development. Against this background, we will keep on co-operating closely with the joint office EU/WB, and the other international institutions, all the donors and, of course, the Stability Pact Office.

We consider that economic and social development are strongly linked. For a year now our Bank has firmly supported a specific Initiative for Social cohesion (Table II) for the region which is receiving increasing attention from several donors. Within this group, the CEB assumes an active role in collaboration with the Council of Europe and the WHO and other donors in drafting a coherent and complex action plan. We consider that it is essential to invest in human resources and to undertake actions promoting access to jobs, decent housing, health and education facilities. The presence of an IFI among the partners of this initiative demonstrates the willingness of Working Table II to integrate the social dimension within its work.

• Social stability and human capital development are essential for the success of economic reforms and sustainable growth.

The CEB intends to take an active part in promoting long term strategies. This facilitates the identification, preparation and implementation of concrete projects. With the Council of Europe, we have prepared a "Housing strategy paper" which points out the main challenges faced by the region. The implementation of this strategy should also facilitate job mobility and job creation in the construction sector. A good example of cooperation is also being developed within the Infrastructure Steering Group, in which the CEB is interested in the financing of projects in the water sector and in the environment sector. To this purpose again, our Bank has collaborated with the EBRD and World Bank in drafting strategy regional papers. The Bank is also a member of the Disaster Preparedness and Prevention Initiative (Table III).

Today, I would like to insist on the fact that all investments in the sectors supported by the CEB should contribute to help people of the region, in particular the most vulnerable groups. But I also would like to stress the importance for the countries of the region of pursuing the reforms engaged. The implementation of legislative frameworks and strengthened institutions will help the states in the region to protect the interest of their citizens. In addition, this will ensure respect, dignity and a decent life for the minorities and the most vulnerable part of the population.

Thank you for your attention.