Delivering Social Impact in a Fragmented World

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By Carlo Monticelli, Governor, Council of Europe Development Bank (CEB)

We are living in changing times. From jobs and technology to migration, health and environmental concerns, people feel uncertain about the future. Such uncertainty is heightened by geopolitical and trade tensions, not to mention the shifting multilateral global economic order that has underpinned progress and prosperity since the Second World War.

Yet it is precisely in the face of change that the foundations of a better future can be laid. It is also during challenging times such as these that the systemic importance of multilateral development banks (MDBs) becomes particularly evident. Indeed, many MDBs were established during the post-war recovery period and have since become cornerstones of the global development architecture. Their relevance is more important than ever.

The Council of Europe Development Bank, or the CEB as it is known for short, plays a distinctive role in the MDB system as the social-development bank for Europe.

The Council of Europe Development Bank, or the CEB as it is known for short, plays a distinctive role in the MDB system as the social development bank for Europe. As the CEB prepares to celebrate its 70^th anniversary in 2026, this is an opportune moment to look back on its work during 2025 and its most effective achievements since the launch of its five-year Strategic Framework in 2023.

This past year has been a defining one for the CEB. The bank chaired the Heads of Multilateral Development Banks (MDBs) Group for the first time, an informal group, albeit with a cardinal purpose: achieving greater impact by deepening MDBs’ collaboration, so that by acting as a system, they can deliver on global goals, such as more jobs, more inclusive growth and more resilient societies.

There has been considerable progress on the MDB reform agenda over the year, translating the G20 Roadmap Towards Better, Bigger and More Effective MDBs into reality. As chair, the CEB has also strived to haul the imperative of social investment into the spotlight.

One concrete outcome of this dialogue among the group’s 10 MDBs is a new joint report called “Social Infrastructure in Focus: The Role of Multilateral Development Banks”, which, by explaining each MDB’s contribution in their respective countries and regions of operation as well as their collective efforts, underscores the fundamental importance of social-infrastructure investments for jobs and growth.

A bank with a social mission

It is indeed this exclusive focus on social sectors that distinguishes the CEB within the MDB ecosystem. The bank invests in education and vocational training, as well as health and social care. It funds social and affordable housing, municipal services and urban development. It provides support to refugees and migrants and enables access to microfinance, particularly for vulnerable people wishing to set up a business. In fact, meeting the needs of disadvantaged individuals and communities is central to the CEB’s mission of promoting inclusive, cohesive and resilient societies.

With 43 member countries spanning both European Union (EU) and non-EU countries, the CEB’s pan-European mandate reflects the bank’s important bridging role in a continent still marked by geographic, economic and political divides and exposed to the risks of instability and the making of a new and fractured global order. This is prompting many countries to re-evaluate their strategic priorities, leading to greater emphasis on defense and security spending. These developments are likely to further constrain public budgets and shift public investment priorities away from social infrastructure. Within Europe, political instability has become a key concern, too. Increasing public dissatisfaction over migration, security and slow growth has fueled polarization and is undermining support for an inclusive social policy, which is at the core of the CEB’s mandate.

To navigate these complex challenges, the CEB’s Strategic Framework 2023–2027 guides the bank’s operations in addressing exclusion in an agile and effective fashion by enhancing social infrastructures and ensuring that no region or population is left behind.

But the CEB’s transformative social projects would not have been feasible without the bank’s first-ever increase in capital, completed in December 2024, with fresh resources from its member countries. With a participation rate of more than 95 percent, the increase is proof of the membership’s strong confidence in the CEB’s social mission and its ability to deliver.

Such confidence is also rooted in the CEB’s responsiveness. For instance, it was among the first international financial institutions to rally behind Ukraine following Russia’s brutal aggression in 2022. The bank quickly mobilized funds for countries such as Poland and Romania to help them cope with the inflows of refugees fleeing Ukraine and attend to basic needs such as shelter, healthcare and schooling. By June 2025, the CEB had provided some €1.5 billion in such funding.

Since Ukraine joined as a member in mid-2023, the CEB has approved six loan projects, totaling over half a billion euros, with plans in place to more than double this figure by 2027. This will be key in helping the country meet its urgent and still unfolding needs in health, housing, microfinance and support for the internally displaced.

Improving lives and fostering growth

In 2025, the CEB maintained strong operational performance, demonstrating its ability to deliver both impact and scale for social development. In the past year, the bank approved 44 projects, totaling €4.5 billion, in 22 member countries from Ukraine to Iceland. The CEB applies a “vulnerability lens” to all of its projects. This is an operational tool that helps identify vulnerabilities linked to environmental, socio-economic and individual characteristics. By placing vulnerability at the heart of its operations, the CEB has enhanced its ability both to address the evolving needs of its members and to better guide its social-investment strategies.

Financial strength to reach strategic goals

The CEB’s progress rests on a solid financial foundation and prudent risk management. Since 2023, the CEB has regained its triple-A credit rating with all major credit-rating agencies, reflecting its robust capital base, strong shareholder support and an impeccable track record in the credit quality of the bank’s loan portfolio.

On the funding side, the CEB is a pathfinder. It launched its first Social Inclusion Bond (SIB) in euros in 2017 and since then has expanded into other currencies, raising more than €13 billion by 2025. These groundbreaking social bonds have been celebrated on stock exchanges from New York to Stockholm and represented more than 40 percent of the bank’s total funding program last year.

Forging partnerships

No MDB, no matter how agile and effective, can deal with today’s pressing challenges on its own; this is particularly true of the CEB, which places great importance on the value of partnerships for achieving progress and delivering impact. The CEB’s work alongside other MDBs, as discussed above, is testimony to this reality. There are other partnerships, too. For instance, over the years, the CEB has mobilized significant resources through European Commission (EC) guarantees and grants, with a substantial portion of the latter blended with CEB loans, creating a considerable leverage effect.

Deepening and expanding the CEB’s partnership with the EU will be key to addressing social needs. By the same token, the bank will continue to deepen and expand its collaborations with other institutions in the development-finance landscape, including national development banks, to enhance education infrastructure, elderly care and social housing across several EU and pre-accession countries. These partnerships reflect the CEB’s core belief: that collaboration and complementarity are key to closing Europe’s persistent social-investment gap.

Looking ahead

Working as a system is the new normal for MDBs, complementing their different mandates, governances and operational contexts. As the CEB prepares to hand over the chair of the Heads of MDBs Group, it will continue to champion a collaborative approach, while using it to enrich and improve its own approach as it supports its member countries in Europe.

The CEB remains committed to long-term solidarity and multilateral consensus-building among countries and regions, which is essential for resilient and thriving societies. These are testing times, but by working together and investing in the social projects that meet the needs of people and their communities, MDBs such as the CEB can help turn challenges into ambitions and deliver the better world that citizens expect and deserve.

References

¹ G20: “G20 Roadmap Towards Better, Bigger and More Effective MDBs,” 4th Finance Ministers and Central Bank Governors (FMCBG) Meeting, G20 Brasil 2024, October 2024.

² Council of Europe Development Bank (CEB), African Development Bank (AfDB), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank Group (IDB Group), Islamic Development Bank (IsDB), New Development Bank (NDB) and World Bank Group (WBG): “Social Infrastructure in Focus: The Role of Multilateral Development Banks,” 2025.

ABOUT THE AUTHOR

Carlo Monticelli, an Italian economist, has been the governor of the Council of Europe Development Bank since December 2021, after being vice-governor for financial strategy. He previously led the international financial relations department at the Italian Treasury, representing Italy in global fora. His career spans both public and private sectors, including roles at the Bank of Italy and Deutsche Bank. He holds a doctorate in Economics, a master’s degree from the University of York, and studied at Oxford. A published author and lecturer, he chairs the Heads of Multilateral Development Banks Group in 2025.