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EUROPEAN COMMISSION DIRECTORATE GENERAL ECONOMIC AND FINANCIAL AFFAIRS
The Second Economic Adjustment Programme for Greece
March 2012
OUTLINE OF THE REPORT
i
Executive summary 1
1. Introduction 6
2. Macroeconomic developments 11
3. Financial markets and financial sector developments 17
4. Programme implementation and policy discussions 22
4.1 Fiscal policy 22
4.2 Fiscal strategy in 2012 and subsequent years 25
4.3 Structural fiscal reforms 32
4.3.1. Privatisation 32
4.3.2. Revenue administration, fight against tax evasion and
tax reform 35
4.3.3. Expenditure control 36
4.3.4. Public administration, public procurement and
social programmes 36
4.3.5. Healthcare and pension reform 37
4.4 Growth-enhancing structural reforms 38
4.4.1. Labour market 38
4.4.2. Regulated professions 42
4.4.3. Energy and transport 42
4.4.4. Business environment and reforms in product and
service markets 43
4.4.5. Absorption of structural funds 44
4.4.6. Judicial reform 44
4.5 Fiscal financing and treasury management 45
4.6 Technical assistance and monitoring 49
Annex 1 Assessment of compliance with the Memorandum of
Understanding on Specific Policy Conditionality 51
Annex 2 Macroeconomic forecast 85
Annex 3 Updated programme documents 91
LIST OF BOXES
1. Statement by the Eurogroup: 21 February 2012 7
2. Economic Adjustment Programme and social equity 9
3. Debt sustainability assessment 28
4. Private Sector Involvement 48
LIST OF TABLES
1. Disbursements under the first financing programme 6
2. Contributions by the euro area Member States to disbursements to
Greece under the first financing programme 7
3. Member States guarantees to the EFSF 9
4. Macroeconomic scenario: main features 14
5. Ratings 18
6. Banking sector soundness indicators 19
ii
7. Summary of compliance with conditionality 22
8. Fiscal quantitative criteria 23
9. Implementation monitoring: Estimated yield of measures agreed in
June and October 2011 24
10. Developments in public employment 25
11. Main fiscal indicators 2010-14 26
12. Deficit and measures accounting: from the deficit in one year to the
next 27
13. Privatisation plans: transactions, so far 32
14. Planned privatisation receipts 33
15. Privatisation – transactions in the pipeline 34
16. Arrears to suppliers 36
17. Minimum monthly wages 41
18. Interest rates and interest payments charged to Greece by the euro
area Member States 46
19. Planned schedule of disbursement for the new programme 47
LIST OF GRAPHS
1. Real GDP growth 11
2. Business and Consumer Surveys 12
3. Equipment 12
4. Housing investment 12
5. Market shares : Performance of Greek exports of goods and
services relative to the imports of 35 industrial countries 13
6. Exports and non-domestic industrial orders 13
7. Industrial production and capacity utilisation 13
8. HICP inflation developments and projections 14
9. HICP inflation main drivers 14
10. Employment and unemployment rate 15
11. Nominal Unit Labour Cost 15
12. Athens Stock Exchange Indices 17
13. Bank deposits 18
14. Greek banks' borrowing from the Eurosystem via monetary
policy operations 18
15. Credit to private sector 19
16. Non-performing loans 19
17. Loan to deposit ratio by bank 19
18. State primary payments - 2011 23
19. Government primary balance – 2011. Outcomes and quarterly
criteria 23
iii
20. Government revenue, expenditure and gross debt 25
21. Recourse to arbitration to settle negotiations disputes 40
22. Nominal Unit Labour Cost 40
23. Regulation of the airline industry 43
24. Outstanding stock of T-bills 45
29. T-bill auctions since July 2010 45
iv
ACKNOWLEDGEMENTS
The report was prepared in the Directorate General Economic and Financial Affairs, under the
direction of Matthias Mors, director and mission chief.
Contributors:
Matthias Mors, Zeta Astra, Giuseppe Carone, Jakob E. Christensen, Fotini Dionyssopoulou,
Riccardo Ercoli, Leila Fernández Stembridge, Luis García Lombardero, Loukas Kaskarelis,
Frank Kohlenberger, Daniel Kosicki, Peter Lohmus, João Nogueira Martins, Ricardo Selves,
Irmantas Simonis, Milda Valentinait!, Rafa" Wiel#dek and Ana Xavier, and Markus Zalewski.
Christos Zavos was responsible for the layout.
The report was prepared in liaison with the ECB.
Comments on the report would be gratefully received and should be sent, by mail or e-mail to:
João Nogueira Martins,
European Commission,
Unit ECFIN-G-3,
BU 1 01-140,
B-1040 Brussels.
e-mail: [email protected]
The cut-off date for this report was 11 March 2012.
EXECUTIVE SUMMARY
1
A joint Commission/ECB/IMF mission met with the Greek authorities in Athens on 17 January -
9 February 2012. The mission assessed compliance with the terms and conditions of the
Economic Adjustment Programme and discussed the policy package forming the basis of a
successor programme.
Greece made mixed progress towards the ambitious objectives of the first adjustment
programme. Several factors hampered implementation: political instability, social unrest and
issues of administrative capacity and, more fundamentally, a recession that was much deeper
than previously projected. Important fiscal targets were missed, which led to the adoption of
additional consolidation measures throughout 2010 and 2011. However, Greece achieved a
substantial reduction in the general government deficit: from 15¾ per cent of GDP in 2009 to
9¼ percent in 2011. This fiscal adjustment was necessary given the extremely high deficit
reached in 2009. The adjustment is much larger than most other fiscal consolidation episodes in
EU countries observed in the past. This fiscal consolidation had to be achieved over a period in
which the economy contracted by more than 11 percent, which was unavoidable given the
substantial positive output gap that had built up due to the non-sustainable policies conducted
until 2009. The pension reform and the agreed privatisation plan were important institutional
changes which will bear fruit in the medium term. Financial stability has been supported by
exceptional Eurosystem measures that contributed to the appropriate financing of the Greek
banking system and economy. However, insufficient progress was made in modernising revenue
administration and expenditure control, and steps taken in the fight against tax evasion and the
prompt settlement of payments to suppliers have remained far too timid. In addition, while
several steps were made with regard to growth-enhancing structural reforms since May 2010,
achievements in this field were clearly not commensurate with the need to accelerate
productivity growth and restore competitiveness. On several occasions, there were legitimate
doubts about the ownership of the programme by the Greek Government. More fundamentally,
reforms adopted since spring 2010 were insufficient in restoring growth and in ensuring fiscal
sustainability, and Greece has been unable to return to the markets so far.
The programme strategy has been adjusted. Through large-scale assistance to Greece, the
international community provides Greece with financing at low interest rates, thereby
compensating for the fact that Greece is not expected to be able to return to market financing
over the next three years. Greece will need to use the additional time to underpin its fiscal
consolidation efforts with structural fiscal reforms to generate expenditure savings on a durable
basis. In a similar vein, structural reforms to boost growth will need to be accelerated to
improve competitiveness, and financial stability will need to be preserved. These objectives are
the same as under the first programme. Nonetheless, in the second programme, the
implementation of the growth-enhancing structural reform agenda gains prominence in the
overall implementation of the programme, while the debt restructuring and higher official
financing allows a slower fiscal adjustment and a more gradual privatisation process.
The economy continues to contract and short-term growth rates have been further revised
downwards. In 2011, the economy is estimated to have contracted by 6.9 percent. Negative
business and household sentiment, delays and problems in the implementation of growth-
enhancing reforms, difficulties in the access to credit, higher unemployment levels and
heightened political uncertainty in the autumn – when Greece's participation in the monetary
union was openly discussed – contributed to weak private consumption and an additional
contraction in investment. Moreover, the deceleration of demand in the European economies
European Commission
The economic adjustment programme for Greece
2
slowed down Greek exports, which had shown dynamic growth in previous quarters. Although
the second financing programme and the completion of the sovereign debt exchange will
contribute to reducing the uncertainties of the last months, the recession will remain severe
throughout 2012. Contraction in domestic output is currently estimated at 4¾ per cent, with
downside risks. The recovery previously announced for next year will be further delayed with,
at best, a stagnation of activity in 2013. It is only in 2014 that positive annual growth rates are
expected to return.
Greece's medium-term economic performance will crucially depend on the
implementation of structural reforms. These reforms, particularly those in the labour market,
the liberalisation of several sectors and a number of measures to improve the business
environment should help promote competition, spur productivity and employment growth and
reduce production costs. Without these reforms, improvements in competitiveness may take
long to materialise, or may be achieved only through a compression of imports and an
unemployment-driven reduction in labour costs. The medium-term projections on which the
second financing programme is based assume that the ambitious labour market reforms will be
followed by equally important structural reforms in goods and services markets. If this were not
the case, the reduction in wage and non-wage costs will translate into higher profit margins and
the medium-term growth projections between 2½ and 3 per cent over 2015-20 may prove too
optimistic.
In the short run, there is some tension between internal devaluation and fiscal
consolidation. Greece has suffered from unsustainable imbalances in both the external and the
fiscal accounts and progress on both counts has so far been insufficient. In the coming years,
progress is necessary on both fronts. Greece has to restore competitiveness through an ambitious
internal devaluation, i.e., a reduction in prices and production costs relative to its competitors, as
well as a shift from a consumption-led to an export-led economy. Since a strong increase in
productivity takes time, an upfront reduction in nominal wage and non-wage costs is necessary.
This is unavoidable, but it complicates fiscal adjustment through the impact that the internal
devaluation has on nominal GDP and, concomitantly, on tax bases. Moreover, when recovery
takes hold, the composition of growth is expected to be less tax-rich than in previous upswings.
Fiscal targets for 2012 and subsequent years have been revised. Targets have been adjusted
to take into account the unfavourable macroeconomic developments, while ensuring that, during
the programme period, there is sufficient progress towards the objective of a 120 percent debt-
to-GDP ratio by 2020. The programme is anchored on the objective of reaching a primary
deficit of 1 percent of GDP in 2012 and a primary surplus of 4.5 per cent of GDP in 2014.
Taking into account the savings that result from the debt restructuring, this fiscal path is
calibrated to be consistent with the correction of the excessive deficit in 2014, as envisaged at
the inception of the first programme. The 2014 primary surplus will have to be kept at such a
high level for several years. The experience of other EU countries shows, however, that a
primary surplus of such a magnitude is not disproportionate and is socially bearable. In any
case, these targets are lower than required under the first programme.
In early 2012, the Government adopted a new package of fiscal measures. These measures
(1.5 percent of GDP) are all on the expenditure side of the budget. It is the first time since May
2010 that a re-calibration of the fiscal strategy was not accompanied by an increase in taxes,
although the programme had envisaged, from the start, a strongly expenditure-based
consolidation path. If fully implemented, the new package should allow meeting the 2012
primary deficit target.
Executive summary
3
However, current projections reveal large fiscal gaps in 2013-14. Current ptojections reveal
a cumulated fiscal gap in 2013-14 of 5½ percent of GDP. Therefore, substantial additional
expenditure cuts will have to be announced and adopted by Greece in the coming months, in
particular when Greece updates its medium-term budget (medium-term fiscal strategy or MTFS)
in May 2012. In order to prepare these measures, the government has launched a review of
public spending programmes. To limit the negative impact on potential growth the additional
measures need to be expenditure-based. The review is expected to focus on and contribute to
savings in social transfers, while preserving basic social protection, defence and the
restructuring of central and local administration. The reduction in public employment through
redundancies and the recruitment rule of 1 entry for 5 exits will also contribute to reducing
government expenditure.
The Government has adopted an ambitious set of labour market measures,
complementing the reforms passed in 2010 and 2011. Since the social dialogue between and
with private sector employers' and employees' representatives did not deliver a satisfactory
outcome, the Government legislated a reduction in minimum wages in the private sectot and a
modification of number of wage-setting procedures, including the rules on the expiration of
collective agreements and the arbitration of wage disputes. This is part of a strategy of reducing
labour costs in the business economy by 15 per cent in three years, thereby accelerating the cuts
in labour costs already observed in the course of 2011. Other than through cuts in nominal
wages, this objective is also expected to be achieved through a reduction in non-wage labour
costs, through the elimination of non-core social benefits and the corresponding reduction in
employers' social contributions. Moreover, the government committed to take additional
corrective measures to facilitate collective bargaining and ensure wage flexibility and higher
employment.
Progress in privatisation has been slower than planned, on account of adverse market
conditions and technical and legal hurdles in the preparation of assets for sale. In the
months preceding the PSI deal, the market has shown a particularly low appetite for Greek
assets. Assuming that the launch of the second financing programme will help overcome the
negative market sentiment, the privatisation fund should be able to deliver a continuous stream
of assets for privatisation for several years. While the objective of privatising assets worth EUR
50 billion is maintained, this target will only be achieved in a horizon going well beyond 2015,
while the recapitalisation of banks will add to the pool of privatisable assets. Besides its
contribution in covering financial needs, privatisation remains crucial for re-launching growth,
modernising the economy and attracting foreign direct investment.
Greece has initiated a comprehensive strategy to recapitalise banks and to restructure the
banking sector, involving a number of supervisory and regulatory measures. Greek banks
are severely hit by the sovereign debt restructuring, against the background of a continuing
recession, thereby leading to substantial capital shortfalls for all banks. Viable banks will be
identified and adequately recapitalised, following recommendations by the supervisors and
taking into account the effects of the PSI. The new programme includes sufficient resources to
recapitalise banks, should private shareholders prove unable or unwilling to provide the
necessary capital.
The governance structure of the recapitalisation and resolution processes will be
significantly enhanced. This became necessary on account of the very substantial amount of
official financing that will be channelled through the existing Greek institutions, in particular
the Hellenic Financial Stability Fund. The recapitalisation strategy is being designed to
European Commission
The economic adjustment programme for Greece
4
maximise private sector participation, while preserving the State's interests. The banks’ shares
acquired by the State in the recapitalisation process will have limited voting rights, but may still
allow for upside returns to be shared between the State and private shareholders. Whenever
possible, the private management of banks will be safeguarded.
The scaled-up official financing and the exchange of debt held by the private sector will
improve debt sustainability prospects. In a moderately optimistic but realistic scenario, if
Greece meets the programme targets, the debt-to-GDP ratio will decline to about 117 percent in
2020. However, it will remain high for many years and, therefore, be susceptible to adverse
domestic and global developments. In particular, relatively small setbacks in terms of growth
due to a slow implementation of structural reforms or an unfavourable external context, may
adversely impact debt dynamics. Moreover, the high level and share of official debt, as well as
the de facto senior status of the bonds resulting from the co-financing structure agreed in the
context of the debt restructuring complicate Greece’s return to the markets at the end of the
second programme. Should market access not be restored at the time of the expiration of the
programme, additional official sector financing could become necessary.
_____________________
The international assistance loans disbursed so far to Greece amount to EUR 73 billion. Of
this amount, EUR 52.9 billion have been paid by the euro area Member States, and EUR 19.9
billion by the IMF. In the second programme, the EFSF and the IMF commit the undisbursed
amounts of the first programme plus additional EUR 130 billion for the years 2012-14. During
this period, the EFSF commits an overall amount of EUR 144.7 billion (including the already
committed or disbursed amounts for PSI and bank recapitalisation), while the IMF will
contribute EUR 28 billion during 4 years.
Implementation risks will remain very high. The success of the second programme depends
chiefly on Greece. It crucially hinges on the full and timely implementation of fiscal
consolidation and growth-enhancing structural reforms agreed under the programme. The
successful debt exchange should help strengthen the reform momentum and build a consensus
in favour of the difficult reforms that still lie ahead. The continuation of the very comprehensive
international financial assistance can only be expected if policy implementation improves. The
determination of the Greek authorities to stick to the agreed policies will be tested already in the
coming months when the deficit-reducing measures to close the large gap for 2013-14 need to
be identified. In a similar vein, generating sustained growth and employment will require
stronger efforts to overcome the resistance of vested interests. The implementation of structural
measures -- from product and service market liberalization to business environment reforms, the
fight against tax evasion and the reduction in public employment -- will have to overcome
bureaucratic delays, the resistance of lobbies and vested interests and break longstanding policy
taboos. This requires the Government's determination, enhanced political coordination, as well
as the consensus of the whole Greek Society.
The Commission services recommend the first disbursement of the second programme to
take place as soon as possible. The debt restructuring has been executed and the very
comprehensive prior actions that were necessary to bring the programme back on track were
completed. Taking this into account, compliance with the agreed policy measures under the first
programme has been sufficient, in spite of deficiencies that this report discusses.
1. INTRODUCTION
5
1. This report discusses progress by Greece in the context of its economic adjustment programme. It
assesses compliance with previously agreed requirements and elaborates on the policies agreed between
Greece and the Commission, ECB and IMF staff teams at the moment Greece shifts to a second
programme of financial assistance. Like the first programme, financing will be provided by the euro-area
Member States and the IMF. However, the financing vehicle of the euro-area Member States will be the
EFSF, rather than bilateral loans as in the first programme. From the IMF side, financing shifts from a
stand-by arrangement (SBA) to an extended fund facility (EFF), which allows for a longer repayment
period. Progress is assessed in relation to the key objectives of securing fiscal sustainability, safeguarding
the stability of the financial system, and boosting competitiveness, potential growth and jobs, through
structural reforms. The assessment is based on the findings of the joint Commission/ECB/IMF mission to
Athens on 18 January-10 February 2012.*
Table 1. Disbursements under the first financing programme
(EUR billion)
Total
1st tranche 18 May 2010 14.5 12 May 2010 5.5 20.0
2nd tranche 13 September 2010 6.5 14 September 2010 2.5 9.0
3rd tranche 19 January 2011 6.5 21 December 2010 2.5 9.0
4th tranche 16 March 2011 10.9 16 March 2011 4.1 15.0
5th tranche 15 July 2011 8.7 13 July 2011 3.3 12.0
6th tranche 14 December 2011 5.8 7 December 2011 2.2 8.0
Total past disbursements 52.9 20.1 73.0
Past disbursements
Euro-area Member States IMF
Source: Commission services and IMF staff.
* During the review mission in Athens, the Commission/ECB/IMF staff teams met with the Prime Minister, the deputy prime-
minister and minister for Finance, and the governor of the Bank of Greece; as well as with the ministers for Regional
Development and Competitiveness and Shipping; Labour and Social Security; Health and Social Solidarity; Administrative
Reform and e-Governance; Environment, Energy and Climate Change; and Infrastructure, Transport and Networks.
Moreover the teams met with staff of these ministries and of the central bank, as well as of the ministries of Culture and
Tourism; Public Debt Management Agency, Hellenic Competition Commission, Hellenic Statistical Authority (ELSTAT),
Hellenic Financial Stability Fund, and Hellenic Asset Development Fund (privatisation fund). Meetings also took place with
the leadership of the PASOK and ND parties, some social partners, think-tanks and several commercial banks.
European Commission
The economic adjustment programme for Greece
6
Table 2. Contributions by the euro-area Member States to disbursements to Greece under the first
financing programme
(EUR million)
BE DE IE ES FR IT CY LU
May 2010 0.0 4,427.9 0.0 1,941.6 3,325.2 2,921.9 32.0 40.8
September 2010 758.8 1,495.9 347.4 656.0 1,123.4 987.2 10.8 13.8
January 2011 238.8 1,864.4 -- 817.5 1,400.1 1,230.3 13.5 17.2
March 2011 530.0 611.8 -- 1,814.4 3,107.4 2,730.5 29.9 38.2
July 2011 195.3 5,050.5 -- 668.5 1,144.8 1,006.0 11.0 14.1
December 2011 219.6 1,714.8 -- 751.9 1,287.7 1,131.6 12.4 15.8
Total 1,942.5 15,165.3 347.4 6,650.0 11,388.6 10,007.5 109.6 139.9
MT NL AT PT SI SK FI Total
May 2010 14.8 932.5 454.0 409.3 0.0 -- 0.0 14,500.0
September 2010 5.0 315.0 153.4 138.3 102.9 -- 392.2 6,500.0
January 2011 6.2 392.6 191.2 172.3 32.4 -- 123.4 6,500.0
March 2011 13.8 871.4 424.3 382.5 71.8 -- 274.0 10,900.0
July 2011 5.1 321.1 156.3 -- 26.5 -- 100.9 8,700.0
December 2011 5.7 361.1 175.8 -- 9.9 -- 113.5 5,800.0
Total 50.6 3,193.8 1,554.9 1,102.3 243.5 -- 1,004.1 52,900.0 Source: Commission services.
Box 1: Statement by the Eurogroup: 21 February 2012
"The Eurogroup welcomes the agreement reached with the Greek government on a policy package that constitutes the
basis for the successor programme. We also welcome the approval of the policy package by the Greek parliament, the
identification of additional structural expenditure reductions of EUR 325 million to close the fiscal gap in 2012 and the
provision of assurances by the leaders of the two coalition parties regarding the implementation of the programme
beyond the forthcoming general elections.
This new programme provides a comprehensive blueprint for putting the public finances and the economy of Greece
back on a sustainable footing and hence for safeguarding financial stability in Greece and in the euro area as a whole.
The Eurogroup is fully aware of the significant efforts already made by the Greek citizens but also underlines that further
major efforts by the Greek Society are needed to return the economy to a sustainable growth path.
Ensuring debt sustainability and restoring competiveness are the main goals of the new programme. Its success hinges
critically on its thorough implementation by Greece. This implies that Greece must achieve the ambitious but realistic
fiscal consolidation targets so as to return to a primary surplus as from 2013, carry out fully the privatisation plans and
implement the bold structural reform agenda, in both the labour market and product and service markets, in order to
promote competitiveness, employment and sustainable growth.
To this end, we deem essential a further strengthening of Greece's institutional capacity. We therefore invite the
Commission to significantly strengthen its Task Force for Greece, in particular through an enhanced and permanent
presence on the ground in Greece, in order to bolster its capacity to provide and coordinate technical assistance. Euro area
Member States stand ready to provide experts to be integrated into the Task Force. The Eurogroup also welcomes the
stronger on site-monitoring capacity by the Commission to work in close and continuous cooperation with the Greek
government in order to assist the Troika in assessing the conformity of measures that will be taken by the Greek
government, thereby ensuring the timely and full implementation of the programme. The Eurogroup also welcomes
Greece's intention to put in place a mechanism that allows better tracing and monitoring of the official borrowing and
internally-generated funds destined to service Greece's debt by, under monitoring of the Troika, paying an amount
corresponding to the coming quarter's debt service directly to a segregated account of Greece's paying agent. Finally, the
Eurogroup in this context welcomes the intention of the Greek authorities to introduce over the next two months in the
Greek legal framework a provision ensuring that priority is granted to debt servicing payments. This provision will be
introduced in the Greek Constitution as soon as possible.The Eurogroup acknowledges the common understanding that
1. Introduction
7
has been reached between the Greek authorities and the private sector on the general terms of the PSI exchange offer,
covering all private sector bondholders. This common understanding provides for a nominal haircut amounting to 53.5
percent. The Eurogroup considers that this agreement constitutes an appropriate basis for launching the invitation for the
exchange to holders of Greek government bonds (PSI). A successful PSI operation is a necessary condition for a
successor programme. The Eurogroup looks forward to a high participation of private creditors in the debt exchange,
which should deliver a significant positive contribution to Greece's debt sustainability. The Eurogroup considers that the
necessary elements are now in place for Member States to carry out the relevant national procedures to allow for the
provision by EFSF of (i) a buy back scheme for Greek marketable debt instruments for Eurosystem monetary policy
operations, (ii) the euro area's contribution to the PSI exercise, (iii) the payment of accrued interest on Greek government
bonds, and (iv) the residual (post-PSI) financing for the second Greek adjustment programme, including the necessary
financing for recapitalisation of Greek banks in case of financial stability concerns. The Eurogroup takes note that the
Eurosystem (ECB and NCBs) holdings of Greek government bonds have been held for public policy purposes. The
Eurogroup takes note that the income generated by the Eurosystem holdings of Greek Government bonds will contribute
to the profit of the ECB and of the NCBs. The ECB’s profit will be disbursed to the NCBs, in line with the ECB’s
statutory profit distribution rules. The NCBs’ profits will be disbursed to euro area Member States in line with the NCBs’
statutory profit distribution rules.
• The Eurogroup has agreed that certain government revenues that emanate from the SMP profits disbursed by NCBs
may be allocated by Member States to further improving the sustainability of Greece's public debt. All Member States
have agreed to an additional retroactive lowering of the interest rates of the Greek Loan Facility so that the margin
amounts to 150 basis points. There will be no additional compensation for higher funding costs. This will bring down the
debt-to-GDP ratio in 2020 by 2.8 percentage points and lower financing needs by around EUR 1.4 billion over the
programme period. National procedures for the ratification of this amendment to the Greek Loan Facility Agreement
need to be urgently initiated so that it can enter into force as soon as possible.
• Furthermore, governments of Member States where central banks currently hold Greek government bonds in their
investment portfolio commit to pass on to Greece an amount equal to any future income accruing to their national central
bank stemming from this portfolio until 2020. These income flows would be expected to help reducing the Greek debt
ratio by 1.8 percentage points by 2020 and are estimated to lower the financing needs over the programme period by
approximately EUR 1.8 billion.
The respective contributions from the private and the official sector should ensure that Greece's public debt ratio is
brought on a downward path reaching 120.5 percent of GDP by 2020. On this basis, and provided policy conditionality
under the programme is met on an on-going basis, the Eurogroup confirms that euro-area Member States stand ready to
provide, through the EFSF and with the expectation that the IMF will make a significant contribution, additional official
programme of up to EUR 130 billion, until 2014.
It is understood that the disbursements for the PSI operation and the final decision to approve the guarantees for the
second programme are subject to a successful PSI operation and confirmation, by the Eurogroup on the basis of an
assessment by the Troika, of the legal implementation by Greece of the agreed prior actions. The official sector will
decide on the precise amount of financial assistance to be provided in the context of the second Greek programme in
early March, once the results of PSI are known and the prior actions have been implemented.
We reiterate our commitment to provide adequate support to Greece during the life of the programme and beyond until it
has regained market access, provided that Greece fully complies with the requirements and objectives of the adjustment
programme."
European Commission
The economic adjustment programme for Greece
8
Table 3. Member States guarantees
to the EFSF
EFSF contribution
key (%)
AT 2.98
BE 3.72
CY 0.21
DE 29.07
EE 0.27
EL 0.00
ES 12.75
FI 1.92
FR 21.83
IE 0.00
IT 19.18
LU 0.27
MT 0.10
NL 6.12
PT 0.00
SI 0.50
SK 1.06
Total 100.0
Source: EFSF.
Box 2: Economic Adjustment Programme and Social Equity
A number of commentators have criticised the Greek adjustment programme given its social implications.
Although correcting large and unsustainable external and fiscal imbalances in the space of a few years does impose a
reduction in living standards which are borne by the entire Greek Society, social considerations have always been present
in the design of the programme. In the discussions between the staff teams and the Greek authorities there has always
been a concern to minimise the impact of the measures on the most vulnerable strata of the population. This
consideration is reflected by concrete steps made in pensions, other social programmes, labour market reforms,
healthcare reform and in the fight against tax evasion. More fundamentally, there is a clear perception that large
imbalances that risk, or would ultimately lead to abrupt changes in the economic regime create a particular large burden
for the less well off, and that a correction of these imbalances improves the medium-term economic opportunities of
everyone.
Cuts in pensions have been targeted, with the aim of protecting the lowest pensions. Greece had to adopt pension
cuts on several occasions over 2010-12. Given the large proportion of pension in total government expenditure, a
reduction in pensions was inevitable. To protect the most vulnerable, these cuts have been progressive, i.e., with larger
reductions in the highest pensions. Moreover, in 2010, Greece adopted a comprehensive pension reform simplifying the
highly fragmented pension system, enhancing transparency and fairness, increasing and equalising the retirement ages
and decreasing the generosity of benefits, while preserving an adequate pension for the low- and middle-income earners.
The pension reform has gone a long way in restoring the viability of the pension social protection systems. Moreover, the
new system is fairer among generations and among the several professional categories. In the same context, a special
contribution has been established for pensioners with a monthly pension above EUR 1 700. In addition, there has been
specific attention at fighting fraud in disability pensions and other pensions.
Healthcare is a very important component of the social protection system in Greece. This sector has also to
contribute substantially to fiscal consolidation, given the large share of the public budget spent on healthcare. This effort
has been made primarily through reduction in the prices of medicines paid by the State, the promotion of cheaper
medicines and other tools of fighting waste. The increase in co-payments also aims at reducing unnecessary demand for
1. Introduction
9
healthcare services. However, the increase in costs borne by patients has amounted to a small fraction of the overall
reduction in costs.
The on-going review of social programmes aims at better targeting beneficiaries and to protect the vulnerable
effectively. For long, there has not been in Greece a clear view on the objectives, and thus on the design and
implementation of social policies. As a result, the system was disproportionately expensive for the benefits it effectively
provided, and more important, it often failed at relieving poverty and hardship. The objective is identifying the specific
groups and situations that require social protection, while avoiding waste. This is reflected in the cuts in family
allowances for the most prosperous households for which there is no good reason of financial support.
Labour market policy changes have been driven by the aim of fighting unemployment, particularly youth and
low-skilled unemployed. Despite a considerable reduction in per capita income, downward rigidities in wage-setting
systems have prevented the necessary adjustment of private sector wages; this has contributed to a sharp increase in
unemployment. The government has adopted several measures in relation to collective bargaining, so as to reduce the
downward rigidity on wages and facilitate recruitments. The reduction in public wages, while a substantial source of
hardship for those concerned, aims at reducing the public deficit and restoring balanced wages between the private and
the public sectors.
A number of changes in the rates made the tax system more progressive. In particular, in the summer 2011, the
Parliament decided a solidarity surcharge levied on income. The increase in property taxes decided in the autumn 2011
will also contribute to a fairer taxation, though there is still scope to improve the modalities of collecting property taxes.
The fight against tax evasion is critical for the success of the programme, although to date, progress in improving the
revenue administration and in fighting tax evasion has been found wanting. This is not only because of the contribution to
fiscal consolidation of additional receipts, but also because of the social acceptability of adjustment programme as a
whole. Indeed, there is a widely agreed perception that tax evasion, while pervasive, is graver among the most affluent.
2. MACROECONOMIC DEVELOPMENTS
10
2. The contraction in economic activity in the fourth quarter of 2011 was far deeper than expected.
The quarterly accounts indicate that real GDP fell by more than 7 percent in the last three months of
2011, compared with the same quarter of 2010. For the year as a whole, real GDP is estimated to have
contracted by 6.9 percent. The contraction resulted from both a significant fall in internal demand and
a loss of dynamism in exports. Households' disposable income was hit by rising unemployment and
the fiscal measures. In addition, heightened social and political instability in the autumn had a
substantially negative impact on business and consumer sentiment. This was compounded by
difficulties in access to credit and contributed to firms and households postponing spending decisions.
Graph 1. Real GDP growth
(outcome and forecast)
-10
-5
0
5
10
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Forecast% change, y-o-y
Source: EL.STAT and Commission services.
3. All of the main components of domestic demand contracted significantly in 2011. Final domestic
demand is estimated to have shrunk, in real terms, by 9 percent. Private consumption is expected to
have contracted by around 7¼ percent, in line with the contraction in real disposable income, and
attempts by households to increase savings in response to the uncertainty in the labour market.
Government consumption has also declined strongly, while investment, now at a very low historical
level (half that in 2007 in real terms) has shrunk in double digits: by about17 percent. These trends are
expected to continue, although the pace of the contraction in consumption and investment should be
smaller than in 2011. Economic activity as a whole, in 2012, is projected to contract by 4¾ percent,
although with significant downside risks and carryover impacts for 2013. The recovery, which was
previously expected for next year, will be further delayed with, at best, a stagnation of activity in
2013. It is only in 2014 that positive annual real GDP growth rates are expected to return.
2. Macroeconomic developments
11
Graph 2. Business and Consumer Surveys
60
65
70
75
80
85
90
95
100
105
110
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
Economic sentiment
-100
-80
-60
-40
-20
0
20
40
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
Total construction confidence Consumer confidence
Industrial confidence Retail trade confidence
Services confidence
Sources : European Commission Sources : European Commission
Graph 3. Equipment
Graph 4. Housing investment
-40
-30
-20
-10
0
10
20
30
40
50
-40
-30
-20
-10
0
10
20
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
%
Industrial confidence (lhs)
Equipment investment (% y-o-y change QNA) (rhs)
-35
-30
-25
-20
-15
-10
-5
0
5
-30
-20
-10
0
10
20
30
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
%%
House loans (% change y-o-y)(lhs)
Building permits (% change y-o-y)(12m.Ac.)(lhs)
Housing investment (% change y-o-y)(rhs)
Sources : EL.STAT and European Commission Sources : Bank of Greece and Eurostat.
4. Net exports contributed an estimated 2.4 percentage points to GDP in 2011 and are likely to
remain the only source of growth in 2012. Overall, exports of goods and services rose by around
2½ percent in real terms in 2011, much less than previously expected, owing to the weakening of EU
and global demand. In the last quarter of 2011, goods export growth decelerated and, as result, for the
year as a whole, their growth rate was less than half than in 2010. Services exports, at 3½ percent,
surprised on the upside. While social unrest in Athens discouraged tourists, the rest of the country
performed well and appeared to benefit from the political uncertainty in Northern African countries.
Shipping performed below expectations, being affected by the hike in oil prices and increasingly
strong competition from Asia. In 2012, exports are expected to grow at moderate rates not much
above 3 percent. It remains to be seen, whether Greek exporters will manage to secure benefits from
the labour market reforms through increased productivity, lower production costs, and therefore gains
in competitiveness. The gains in market shares that are projected for 2012 and 2013 are only a
fraction of the losses during the previous decade, which suggests upside risks and a potential for
strong growth in a medium-term perspective.
European Commission
The economic adjustment programme for Greece
12
5. The current account deficit will substantially contract in 2012, but remains at an unsustainable
level. When calculated on the basis of national accounts, which may slightly differ from the balance
of payments standards, the current account deficit remained just above 10 percent of GDP in 2011, 2
points better than in 2010 and 4 points below 2009. The slow correction in the external imbalance will
continue in 2012 driven by the described developments in exports and an expected contraction in
imports, which mirrors developments in consumption and investment. After a contraction of 7 percent
in 2011, real imports are likely to fall by at least 5 percentage points in 2012. However, the
contraction in volumes is not fully reflected in the external balance because of an oil-price-induced
increase in the import deflator. The balance of goods and services is expected to stand at –4¾ percent
of GDP in 2012, almost 4 points below the 2010 deficit. Moreover, the balance of incomes will
benefit from the restructuring of government debt, which will reduce the flow of incomes paid to the
rest of the World. All in all, the 2012 current account deficit is forecast to be around 7 percent of
GDP.
Graph 5. Market shares:
Performance of Greek exports of goods and services
relative to the imports of 35 industrial countries
70
75
80
85
90
95
100
2000 2002 2004 2006 2008 2010 2012
2000=
100
Source: European Commission.
Graph 6. Exports and non-domestic industrial
orders
Graph 7. Industrial production and capacity utilisation
-60
-45
-30
-15
0
15
30
45
60
75
-40
-30
-20
-10
0
10
20
30
40
50
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
%%
Exports of goods (% change, y-o-y, lhs)
Industrial non-domestic orders (% change, rhs)
64
66
68
70
72
74
76
78
-14
-11
-8
-5
-2
1
4
7
10
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
%
Industrial production (3m.m.a., %change, y-o-y) (lhs)
Capacity utilisation (rhs)
Sources: EL.STAT and Bank of Greece. Sources: EL.STAT and European Commission
2. Macroeconomic developments
13
6. Inflation remains stubbornly and worryingly high for an economy that is entering its fifth year
of recession. In 2011, headline HICP inflation averaged 3.1 percent. The fall in inflation that was in
progress since mid-2010 was interrupted during the latter months of 2011 due to the hike in oil prices
and indirect tax increases. Although constant-tax inflation, at 1.2 percent, has been lower than
headline HICP, it has remained persistently positive, thus in contradiction to the expectation of a fast
internal devaluation. Moreover, the differential in the constant tax HICP with the euro area has not
been sizeable enough to quickly recover previous losses in price competitiveness. The low level of
economic activity in 2012, and the reduction in private sector wages will moderate prices, with
slightly negative inflation rates expected in 2012 and 2013. However, such a projected development
will only materialise if the labour market reform is accompanied by action to promote competition in
the goods and services market to allow the reduction in labour costs to be passed on to consumer
prices.
Graph 8. HICP inflation developments and projections
(% change, y-o-y)
-3
-2
-1
0
1
2
3
4
5
6
7
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
%
GR: constant-tax inflation
GR: headline inflation
EA17: constant-tax inflation
Source: EL.STAT.
Graph 9. HICP inflation: main drivers
(% change, y-o-y)
-30
-20
-10
0
10
20
30
40
50
0
1
2
3
4
5
6
7
8
9
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
%%
Core inflation (lhs)
Processed food (lhs)
Energy (rhs)
0
4
8
12
16
20
24
0
2
4
6
8
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
%
Headline inflation (lhs)
Transport (lhs)
Alcohol (rhs)
Source: EL.STAT. Source: EL.STAT.
European Commission
The economic adjustment programme for Greece
14
7. Employment has taken a heavy blow in the face of downwardly rigid wages. Total employment
declined by over 6 percent in 2011 and an additional fall of 5 percent is forecast in 2012, with the
unemployment rate projected to average 18 per cent in 2012 and to reach above 20 percent in some
quarters. The labour market reforms are expected to provide a significant contribution towards both
saving, and creating new, jobs. Nevertheless, employment is not expected to stabilise before 2013,
and the subsequent recovery in the number of jobs will be progressive.
8. The closure of the competitiveness gap is expected to accelerate. Following years of continued
growth, well in excess of its main trading partners, unit labour costs are clearly declining. After the
inertia observed in 2010, wages in the business sector fell by around 5 per cent in the year leading up
to the third quarter of 2011. This was insufficient to help recover competitiveness, also due to
continued cost reductions by Greece’s main trading partners. However, the latest labour market
measures (see below), together with those legislated in 2011 are expected to contribute to reduce
labour costs by at least 15 percent over the next three years. However, the product and service market
reform have also a crucial role to play to increase internal competition and improve external
competitiveness.
Graph 10. Employment
and unemployment rate
Graph 11. Nominal unit labour cost
(annual growth rate)
0
5
10
15
20
25
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
Employment (% change, y-o-y) (lhs)
Unemployment rate (rhs)
-10
-5
0
5
10
15
2001 2003 2005 2007 2009 2011 2013 2015
%
Greece European Union forecast
Source : EL.STAT (Labour force survey; these data may slightly differ from
national accounts data which appear in other tables of this report). Source : Commission services.
2. Macroeconomic developments
15
Table 4. Macroeconomic scenario
main features
2009 2010 2011 2012 2013 2014
Real GDP (growth rate) -3.2 -3.5 -6.9 -4.7 0.0 2.5
Final domestic demand contribution* -3.6 -7.0 -10.0 -7.2 -1.4 1.5
Net trade contribution 3.1 3.1 2.8 2.3 1.4 1.2
Employment (growth rate) -0.7 -1.9 -6.3 -4.8 -0.2 1.6
Unemployment rate (percent of labour force) 8.9 11.7 15.9 17.9 17.8 16.7
Compensation of employees, private sector per head 0.6 -0.3 -3.2 -13.0 -3.8 -2.2
Unit labour cost (growth rate) 4.3 -1.6 -1.0 -7.8 -1.3 -1.9
HICP inflation 1.3 4.7 3.1 -0.5 -0.3 0.1
HICP inflation at constant taxes 1.1 1.4 1.2 -1.2 -0.8 0.1
Current account balance (percent of GDP) -14.3 -12.3 -10.3 -6.9 -5.3 -4.6
Net borrowing vis-à-vis RoW (percent of GDP) -13.3 -10.6 -8.3 -4.8 -3.1 -2.4
Net external liabilities (percent of GDP) -112.9 -101.9 -116.0 -88.1 -90.0 -89.6
General Government deficit (percent of GDP) -15.8 -10.6 -9.3 -7.3 -4.6 -2.1
General Government primary surplus (percent of GDP) -10.6 -5.0 -2.4 -1.0 1.8 4.5
General Government debt (percent of GDP) 129.3 144.9 165.3 161.4 165.4 162.1
* Excluding change in inventories and net acquisition of valuables
3. FINANCIAL MARKETS AND FINANCIAL SECTOR
DEVELOPMENTS
16
9. The expectation of the debt exchange has weighed on financial market developments. Since the
European Council decisions on 21 July and 26/27 October 2011, financial sector developments were
influenced by the expectation of the debt exchange. Yield and CDS spreads on Greek sovereign debt
have skyrocketed and the Athens stock exchange index fell. Once the debt exchange is executed, there
is an expectation of a progressive improvement in these indicators. Following the announcement of
the debt exchange offer, rating agencies have further downgraded Greece. However, rating agencies
have pre-announced that the Greek sovereign rating would be revised upgraded (to CCC or similar) as
soon as the debt exchange is executed.
Graph 12. Athens Stock Exchange Indices
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
Ind
ex
ASE Banks Index[Mar-12]
ASE General Index[Mar-12] Source : ECOWIN
10. The Greek banks confront the challenge of a protracted recession and the low credit standing of
the economy as a whole. Non-performing loans (NPL) have continued to increase, reaching 15½
percent at the end of September 2011, up from 13¼ percent in June. Restructured loans account for
another 4 percent. The coverage of impaired loans with provisions remains stable at 46 percent,
however, when also taking into account restructured loans, the ratio is deteriorating. The banks have
continued their efforts to adjust their business models to the harsh economic environment. In the third
quarter, staff costs were cut by 8 percent (year-on-year) and the general administrative expenses fell 6
percent. This allowed an improvement in the pre-provisioning income despite a slight decline in net
interest income (-1.5 percent). The pre-provisioning income of the commercial banking system
amounted to EUR 2.7 billion and increased by 16 percent compared to the third quarter of 2010.
Nevertheless, massive impairment charges related to the restructuring of the government debt, as
decided in July, resulted in EUR 8.5 billion losses in the first nine months of 2011.
11. The deleveraging continues and the liquidity position of banks tightens further. The balance
sheet of the Greek banking sector contracted by 8.7 percent in 2011. Credit to the domestic economy
shrank by 3.8 percent, with a reduction in loans to both households (-4.6 percent) and corporations
(-2.8 percent). Domestic deposits decreased at a much faster pace (-18 percent) also due to political
uncertainty (especially in May and autumn), leading to the increases in loan-to-deposit ratios in most
banks. As banks are shut off wholesale funding markets, the funding gap was closed by central bank
financing, a growing portion of which is in the form of emergency liquidity assistance since August
2011.
12. The execution of the sovereign debt exchange will bring about major losses for banks. Although
it was not executed, PSI-I, i.e. the debt restructuring decided in July 2011, impacted negatively the
capital level of Greek banks in the second quarter of 2011. The average capital adequacy ratio
declined from 13.8 at the end of 2010 to 11.9 percent for banks in Greece and from 12.2 at the end of
3. Financial markets and financial sector developments
17
2010 to 10.4 percent for the banking groups. PSI-II, decided by the euro area summit in October 2011,
and confirmed by the Eurogroup in February 2012, will result in significant additional losses and
capital needs for Greek banks as the net present value losses of government bonds may reach, or even
exceed, 70 percent on the sector's bond portfolio of about EUR 43 billion. Anticipating the conclusion
of the debt exchange, both the government and the banking community prepared for restoring the
banking sector’s solvency. Meanwhile, the new minimum regulatory requirement for capital adequacy
is set at 9 percent of core tier 1 capital as from September 2012, and is expected to be raised to 10
percent from July 2013.
Table 5. Ratings
Rating Effective Rating Effective Rating Effective
Sovereign C* 2-Mar-12 RD** 9-Mar-12 SD*** 27-Feb-12
ATE Caa2 23-Sep-11 B- 14-Jul-11 --- ---
NBG Caa2 23-Sep-11 B- 14-Jul-11 CCC 15-Jun-11
Eurobank Caa2 23-Sep-11 B- 14-Jul-11 CCC 15-Jun-11
Alpha bank Caa2 23-Sep-11 B- 14-Jul-11 CCC 15-Jun-11
Piraeus Caa2 23-Sep-11 B- 14-Jul-11 CCC 15-Jun-11
Standard & Poor'sMoody's FitchLT Issuer Rating
* Moody's does not use a 'Default' or 'Selective Default' rating.
** Fitch announced that after the debt exchange the sovereign rating was likely to be 'low speculative grade.'
*** S&P stated that once the debt exchange is consummated, the sovereign rating would be raised to the CCC category.
Source: Bloomberg
Graph 13. Bank deposits
Graph 14. Greek banks' borrowing from the
Eurosystem via monetary policy operations
0
50
100
150
200
250
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
EUR billion
Total deposits Sight deposits
0
5
10
15
20
25
30
35
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Borrowing from the Eurosystem excluding
ELA (EUR million) (lhs)
Borrowing from the Eurosystem (EUR
million) (lhs)
as % of liabilities (rhs)
Source: Bank of Greece *Note: Estimate including ELA and ANFA
Source: IMF-IFS
European Commission
The economic adjustment programme for Greece
18
Graph 15. Credit to private sector
(per cent change, y-o-y)
Graph 16. Non-performing loans ratio
-10
-5
0
5
10
15
20
25
30
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
%
Households
Enterprises
Private sector(total)
4
6
8
10
12
14
16
18
2007 2008 2009 2010 2011
%
Source: Bank of Greece Source: Bank of Greece
3. Financial markets and financial sector developments
19
Graph 17. Loan to deposit ratio by bank
Sep-10
Dec-10Sep-10
Sep-10
Sep-10Sep-11
Sep-11
Sep-11
Sep-11
Sep-11
80
90
100
110
120
130
140
150
160
170
NBG Alpha Eurobank Piraeus ATE
Source : Banks' financial statements
Table 6. Banking sector soundness indicators
Aggregation
basis (1)2007 2008 2009 2010 2011 Q3
Capital adequacy ratio consolidated 11.3 9.5 11.9 12.3 10.5
solo 12.7 10.7 13.3 13.9 12.0
Tier I ratio consolidated 9.3 8.1 10.9 11.2 9.6
solo 9.4 8.8 12.3 12.5 10.8
Return on assets (after tax) consolidated 1.4 0.7 0.1 -0.3 -1.9
solo 1.0 0.2 -0.1 -0.6 -2.1
Return on equity (after tax) consolidated 17.8 10.0 2.3 -4.2 -28.2
solo 14.6 3.1 -1.7 -8.6 -34.2
Loan to deposit ratio (2) consolidated 106.0 114.0 113.8 121.9 132.7
Non-performing loans (3) solo 4.7 5.1 8.1 10.8 15.5
Coverage ratio (4) solo 53.9 49.5 42.1 46.3 45.6
Notes: (1) "Solo" refers to banks in Greece, "consolidated" to banking groups. (2) Loans to customers to liabilities due
to customers. (3) Non-performing loans as percentage of total gross loans. (4) Provisions as percentage of non-
performing loans. Source: Bank of Greece
13. The quality of domestic loan portfolios of Greek banks has been assessed in a diagnostic study
by BlackRock Solutions. After six months of field work, which consisted in the review of bank loan
books and calibrating the models, the contractor submitted its report to the Bank of Greece in January
2012. The estimated credit loss projections for the next three years have been adjusted by the Bank of
Greece for the foreign and state-related exposures and will, together with the results of PSI, the
forecasts of profitability and risk-weighted assets, feed in the final estimation of capital needs per
bank. For this exercise, banks have submitted their business plans, which are also the basis for
assessment of their long-term viability. The Bank of Greece endeavoured to take a view on the
optimal future structure of the Greek banking sector as a whole. The Bank of Greece has been
supported in this effort by a specialised consultant and has collaborated closely with the Commission,
the ECB and the IMF staff teams.
14. The HFSF is preparing to cover the remaining part of capital needs of the viable banks, which
will not be covered by the private sector. To this end, the financial resources of the HFSF will be
significantly increased under the second financing programme. Against the critical situation of the
Greek economy and the huge sums needed for restoring bank's solvency, the designed recapitalisation
European Commission
The economic adjustment programme for Greece
20
framework aims at maximising the participation of private investors by providing targeted incentives.
At the same time, it ensures that there is no full transfer of control over the Greek banking sector to
the State. In this context, the overhaul of the HFSF governance structure has also been launched. It
includes proposals to implement a two tier management system, with a General Council and an
Executive Board, and to separate the recapitalisation and resolution functions in the HFSF's internal
organisation.
15. Two small banks were resolved under the new resolution framework. Soon after implementation
of the new bank resolution framework, at the beginning of October, Proton Bank was split into a good
bank (Nea Proton) and a bad bank. The resolution arm of the Greek Deposit Insurance Fund (TEKE)
covered the funding gap between the assets and liabilities of Nea Proton, while the HFSF provided the
capital and assumed responsibility for management oversight of the new institution. In December,
another ailing bank, T-Bank, was resolved by a transfer of assets and liabilities to Hellenic Postbank,
which previously envisaged a merger with T-Bank. TEKE covered the funding gap between the assets
and liabilities of T-Bank that were transferred to TT Postbank. Other non-viable banks may be put in
resolution according to the financial sector strategy of the programme. In order to streamline and
improve efficiency of the resolution process, the relevant laws are to be amended, taking account of
the experience from the first two resolution cases.
16. The restructuring of individual banks is on-going. Due to the PSI I-related impairment losses, ATE
Bank had to be recapitalised by the State (EUR 290 million) in December. This was the second
recapitalisation within a year. Taking into account the track record of received state aid, credit loss
projections from the BlackRock diagnostic and the expected impact of PSI-II, the government carried
out an assessment of various options to address the bank, and committed to to take a final decision,
choosing a specific course of action by end-March 2012. The transfer of the commercial activities of
the Hellenic Consignment and Loan Fund (HCLF) to a separate entity was endorsed by an Inter-
Ministerial Decision in January 2012 and should be completed by July 2012. The merger of Alpha
Bank and Eurobank EFG was approved by the respective general assemblies in November, and
cleared by the Hellenic Competition Commission in January, but its finalisation has in the meantime
stalled due to the uncertainty surrounding the banks' final capital needs resulting from PSI-II.
17. The Bank of Greece has launched a comprehensive supervisory strategy for the insurance
sector. This is aimed at enhancing the soundness of Greek insurance undertakings, ensuring their
compliance with 'Solvency I' and preparing the sector to comply with the 'Solvency II' requirements in
the future. The Bank of Greece requested technical assistance to support the reorganisation of the two
Insurance Guarantee Funds (for life and for motor insurance) from the Commission. This technical
assistance will also explore solutions in terms of insurance resolution.
4. PROGRAMME IMPLEMENTATION AND POLICY DISCUSSIONS
21
18. In spite of particularly difficult economic circumstances, Greece made progress in the implementation
of the programme. This applies to fiscal consolidation even if, as anticipated earlier, the annual ESA-based
target for 2011 was missed. However, to mitigate this slippage and minimise its carry-over effect on future
years, the Greek authorities in 2011 adopted additional consolidation measures that went well beyond those
initially planned. It should be noted that, reflecting the higher-than-originally-estimated starting point of the
fiscal deficit in 2009, the pace of the reduction in the overall government deficit since 2009 is in line with the
original plans. The main objectives of the successor programme remain unchanged compared to the first
programme, but the growth-enhancing structural reforms are expected gain stronger momentum and the
fiscal targets for 2012-13 have been loosened.
Table 7. Summary of compliance with policy conditionality
Overall assessment Comments
Fiscal policy Partially observed
The agreed fiscal consolidation measures were partially implemented.
The end-December quarterly performance criteria on the cash general
government primary deficit and the state primary expenditure were
respected.
There was some reduction in the stock of arrears owed to suppliers.
The ESA-based 2011 deficit exceeded the ceiling established at
programme inception, although only slightly above the projection of the
previous review.
Privatisation and
structural fiscal reforms Partially observed
The quantitative cumulative criterion on privatisation receipts for end-
December was missed by a small margin; several transactions for 2012-
13 are under preparation.
Further measures have been adopted in relation to the fight against tax
evasion and public finance management, and restructuring of public
enterprises. However, the fight against tax evasion cannot yet be
considered as successful, and there were delays in several specific
revenue administration measures. Likewise, several measures to
strengthen public financial management were missed.
There were also issues in healthcare reform, and the framework law on
supplementary pensions.
Financial sector policy Largely observed
Payments into the intermediate account of the Hellenic Stability Fund
continued according to plans until end-2011.
A detailed diagnostic of loan portfolios of banks was prepared.
The State increased the ATE share capital.
Governance rules were reviewed in preparation of the post-PSI bank
recapitalisation.
Growth-enhancing
structural reforms Partially observed
After attempting a dialogue with social partners, the Government
adopted several labour market measures, including a reduction in
minimum wages and changes in wage bargaining.
Progress in several other areas has been slower, in particular on business
environment related measures and the opening of the energy market.
Source: European Commission.
19. In February and March 2012, Greece implemented several prior actions to bring the fiscal adjustment
back of track and enhance the credibility of the second programme. These prior actions concerned each
of the main chapters of the programme: fiscal consolidation, revenue administration, pension reform,
statistics, financial sector regulation and supervision, growth-enhancing structural reform (both labour and
liberalisation of regulated professions. The completion of these prior actions required acts adopted by the
Parliament and Council of Minister, Ministerial Decisions or Joint Ministerial Decisions and Circulars, and
administrative actions.
4.1. FISCAL POLICY
20. The end-December 2011 performance criteria for primary expenditures and the primary balance have
been met. Despite the sharp deterioration in economic conditions in the last quarter of 2011, the authorities
managed to keep fiscal developments close to previous projections. Tax and social contributions were hit by
the deepening recession, increasing unemployment and aggravating liquidity constraints. Moreover, tax
European Commission
The economic adjustment programme for Greece
22
collection was disrupted by frequent industrial action in October and November. However, these effects were
mitigated by higher receipts of EU structural funds and cutbacks in capital spending and in other
discretionary expenditure..
Table 8. Fiscal quantitative performance criteria
(EUR billion)
Data Criterion Data Criterion
General government primary cash balance -5.3 -5.0 -4.8 -5.1
State primary spending 42.0 44.5 59.1 60.8
Central government debt 371.0 394.0 371.0 394.0
New guarantees granted by the central government 0.6 1.0 0.6 1.0
end Sep. 2011 end Dec. 2011
Source: Commission services.
Graph 18. State primary payments - 2011
(cumulative, EUR million)
Outcomes and quarterly criteria
Graph 19. Government primary balance – 2011
(cash basis, cumulative balance, EUR million)
Outcomes and quarterly criteria
-7500
-6500
-5500
-4500
-3500
-2500
-1500
-500
500
1500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Outcome
Performance criteria Ceilings
0
10000
20000
30000
40000
50000
60000
70000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Performance criteria
Outcome
Source: GAO and Commission services. Source : GAO and Commission services..
21. The indicative criterion of non-accumulation of arrears was missed by a small margin. On the basis of
the currently available data, the stock of arrears to suppliers at end-2011 was above EUR 5.7 billion, around
EUR 0.4 billion higher than a year before. However, the government still made progress in the last months of
the year in reducing arrears (in particular those related to investment projects) with the help of retroactive
payments by EU structural funds in the context of the decision to increase the average EU cofinancing rate
from 75 to 95 percent and the additional facility of 10 percent. Most arrears are owed by hospitals and social
security funds to suppliers of medicines and other medical products. Since the ESA-based deficit is
calculated in an accruals basis, the delays in payments do not result in an underestimation of the government
deficit. However, such an underestimation may occur in relation to delays in tax refunds because taxes and
the respective refunds are predominantly recorded according to the effective cash inflows and outflows. The
new programme includes financing to settle arrears in a progressive manner. The mission stressed that the
clearance of arrears of the several government departments by the State should include a careful verification
of arrears claims, and after ensuring that the government entities requesting such a settlement are not
accumulating any further arrears and have made progress in their financial management.
4. Program implementation and policy discussions
23
Table 9. Implementation monitoring.
Estimated yield of fiscal measures agreed in June and October 2011
2011 2012 2011 2012 2011 2012
Total measures 7 570 18 186 6 729 18 740 -840 554
% of GDP 3.5 8.5 3.1 8.9 -0.4 0.3
Wage bill 743 1 712 735 1 663 -8 -49
% of GDP 0.3 0.8 0.3 0.8 0.0 0.0
Operational expenses 180 262 180 262 0 0
% of GDP 0.1 0.1 0.1 0.1 0.0 0.0
Extra-budgetary funds 304 396 297 404 -7 8
% of GDP 0.1 0.2 0.1 0.2 0.0 0.0
State-owned enterprises 0 414 0 414 0 0
% of GDP 0.0 0.2 0.0 0.2 0.0 0.0
Defence expenditure 0 0 0 0 0 0
% of GDP 0.0 0.0 0.0 0.0 0.0 0.0
Health care 53 267 11 225 -42 -42
% of GDP 0.0 0.1 0.0 0.1 0.0 0.0
Pharmaceutical spending 372 601 372 356 0 -245
% of GDP 0.2 0.3 0.2 0.2 0.0 -0.1
Social benefits 967 2 329 828 2 406 -139 77
% of GDP 0.4 1.1 0.4 1.1 -0.1 0.0
Investment spending 800 804 950 504 150 -300
% of GDP 0.4 0.4 0.4 0.2 0.1 -0.1
Other expenditure 150 360 150 611 0 251
% of GDP 0.1 0.1 0.1 0.3 0.0 0.1
Tax policy 4 001 11 042 3 207 11 895 -794 853
% of GDP 1.8 5.2 1.5 5.6 -0.4 0.4
Oct. 2011 Feb. 2012 Difference(*)
(*) Ratios to GDP are calculated on the basis of the latest GDP figures.
Note: This table does not include measures for 2012 adopted in February 2012.
Source: Commission services.
22. The ESA-based 2011 government deficit is estimated at 9¼ percent of GDP, 1 1/4 points lower than in
2010. The decline in the deficit ratio resulted from an increase in the revenue-to-GDP ratio by 1½ points,
while the primary expenditure ratio as a share of GDP fell 1 point. The increase in interest expenditure by
more than one point means that the improvement in the primary deficit was almost 2½ points. To achieve
this result, Greece is estimated to have adopted measures – including the carryover impacts from the
measures taken in 2010, and excluding the impact that carry into 2012 – of 7¾ percent of GDP with an
increased concentration of measures towards the end of the year. The amount of measures is significantly
higher than the reduction in the deficit, suggesting that, most of the measures effectively served to counteract
the upward drift in expenditure and downward pressure on revenue. The former mainly results from an
automatic trend increase in several large spending components such as pensions and healthcare; the latter
mainly stems from the recession but possibly also a deterioration in tax compliance.
European Commission
The economic adjustment programme for Greece
24
Graph 20. Government revenue, expenditure and gross debt
(% of GDP)
100
120
140
160
180
35
40
45
50
55
2007 2008 2009 2010 2011 2012 2013
% of GDP
Expenditure (lhs)
Revenue (lhs)
Debt (rhs)
Data in this chart refer to four consecutive quarters for revenue, expenditure
and GDP.
Source : Eurostat for statistics, Commission services for forecasts
Table 10. Developments in
public employment
(stock, persons) end-2009 end-2010 Nov. 2011
General government 715,882 683,627 664,223
Central government 465,609 446,789 428,041
Legal entities 6,971 6,034 5,490
Local government 95,585 93,194 98,790
Hospitals 88,230 88,564 89,838
Social security funds 31,519 29,471 26,855
SOEs chapter A 22,975 19,565 15,209
Other 4,993 10 0
Source: Ministry of Administrative Reform.
4.2. FISCAL STRATEGY IN 2012 AND SUBSEQUENT YEARS
23. The fiscal outlook for 2012 looks significantly worse than expected just a quarter ago. This mainly
results from the combination of a worse fiscal outturn for 2011, the deterioration in the macroeconomic
outlook (including the impact that the lowering in private sector wages resulting from the labour market
reforms included in the new programme has on social contribution and personal income tax) and lower-than-
envisaged yields of previously adopted measures. These deficit-increasing factors are partly compensated by
savings in interest expenditure arising from PSI. If no additional measures were adopted, the 2012 primary
deficit could be in the order of 2½ percent of GDP. This compares with a small surplus targeted for 2012 in
the previous review of the programme.
24. In order to accommodate the deterioration in the macroeconomic outlook, the target for the primary
balance for 2012 was set at -1.0 percent of GDP. The target was defined in a manner that requires a similar
fiscal effort as before, while letting automatic stabilisers operate. Given the substantial savings in interest
expenditure that result from PSI and the shift to a new financing programme, the overall deficit projections
for 2012 is only slightly different from the overall deficit target of the first programme.
4. Program implementation and policy discussions
25
Table 11. Main fiscal indicators 2010-14
(EUR billions, unless otherwise noted)
2011 2012 2013 2014
-5.2 -2.0 -4.0 -2.3% of GDP -2.4 -1.0 -2.0 -1.1
General government primary balance target -2.0 3.7 9.4% of GDP -1.0 1.8 4.5
-20.0 -14.8 -17.0 -16.1% of GDP -9.3 -7.3 -8.4 -7.7
-14.8 -9.4 -4.4% of GDP -7.3 -4.6 -2.1
ESA 95 general government balance (consistent with
primary targets)
ESA 95 general government primary balance (projections at
unchanged policies)
ESA 95 general government balance (projections at
unchanged policies)
Source: Commission services.
25. To achieve the revised fiscal target for 2012, the Government committed to reduce expenditures by 1.5
percent of GDP. Around three quarters of the cuts is of a permanent nature and have already been
introduced in the context of a supplementary budget and other legal acts:
! Reduction in pharmaceutical expenditure by at least EUR 1 080 million, in 2012 by reducing medicine
prices (generics and branded medicines), increasing co-payments, reducing pharmacists' and
wholesalers' trade margins, applying compulsory e-prescription by active substance and protocols,
updating the positive list of medicines and implementing a mechanism of quarterly rebates (automatic
claw-back) to be paid by the pharmaceutical industry.
! Reduction in overtime pay for doctors in hospitals by at least EUR 50 million.
! Reduction in the procurement of military equipment by EUR 300 million (cash and deliveries).
! Reduction in the number of deputy mayors and associated staff with the aim of saving at least EUR 30
million.
! Reduction in the central government's operational expenditure, and election-related spending, by at least
EUR 270 million, compared to the budget.
! Frontloading cuts in subsidies to residents in remote areas, and cuts in grants to several entities
supervised by the several ministries, with the aim of reducing expenditure in 2012 by at least EUR 190
million.
! Reduction in the public investment budget (PIB) by EUR 400 million: this cut will be implemented
through cuts in subsidies to private investments and domestically-financed investment projects. The
reduction in the PIB budget will not have any impact on projects that are co-financed by structural
funds (uncompleted project financed by the 2000-06 operational programmes, cohesion fund (2000-06)
projects, 2007-13 operational programmes, and non-eligible expenditure related to the above projects).
! Changes in supplementary pension funds and pension funds with high average pensions or which
receive high subsidies from the budget, with the aim of saving at least EUR 300 (net after taking into
account the impact of these cuts on taxes and social contributions).
! An average reduction by 12 percent in the so-called 'special wages' of the public sector, to which the
new wage grid does not apply. This will apply after 1 June 2012 and it should deliver savings of at least
EUR 205 million (net after considering the impact on taxes and social contributions).
European Commission
The economic adjustment programme for Greece
26
Table 12. Deficit and measures accounting:
from the deficit in one year to the next
2009 deficit (outcome) 36 624 15.8
primary deficit drift in 2010 5 681 2.5
change in interest expenditure 894 0.4
measures in 2010 1/ 19 074 8.4
impact on ratio of nominal GDP growth -- 0.3
2010 deficit (outcome) 24 125 10.6
primary deficit drift in 2011 10 592 4.9
change in interest expenditure 1 964 0.9
measures in 2011 1/ 16 680 7.7
impact on ratio of nominal GDP growth -- 0.6
2011 deficit (estimate) 20 002 9.3
primary deficit drift in 2012 10 020 4.9
change in interest expenditure -2 032 -1.0
measures identified for 2012 1/ 13 191 6.5
impact on ratio of nominal GDP growth -- 0.5
2012 deficit (projection) 14 799 7.3
primary deficit drift in 2013 3 572 1.8
change in interest expenditure 211 0.1
measures identified for 2013 1/ 1 584 0.8
measures to be identified in 2013 7 639 3.8
impact on ratio of nominal GDP growth -- 0.0
2013 deficit (target) 2/ 9 359 4.6
primary deficit drift in 2014 1 376 0.7
change in interest expenditure 749 0.4
measures identified for 2014 1/ 3 065 1.5
measures to be identified for 2014 4 016 1.9
impact on ratio of nominal GDP growth -- -0.1
2014 deficit (target) 2/ 4 404 2.1
EUR million % of GDP
Note: Deficit in year t = Deficit in year t-1 plus primary deficit drift plus change in interest expenditure minus
measures (and for the GDP ratios: plus impact on debt ratio of nominal GDP growth).
1/ Including carry-over impacts.
2/ Overall balance consistent with the primary fiscal balance targets.
Source: Commission services.
26. The Government aims at achieving primary surpluses of 1.8 percent and 4.5 percent of GDP in 2013
and 2014, respectively. These targets are in line with the debt projections on which the euro area summit
decided in October 2011 as a precondition for shifting to a second financing programme. However, the
current policies are not sufficient to bring the public accounts to these targets. Based on the current
projections at unchanged policies, there is a cumulated fiscal gap through 2014 of 5½ percent of GDP. The
Government will have to identify this amount of measures by June 2012 and adopt them in the 2013 and
2014 budgets to reach the targets. Given that the scope for horizontal spending cuts or higher taxes has been
exhausted and the baseline scenario already includes yields from improved tax compliance, these savings
will have to come from structural spending reforms. To identify well-targeted expenditure reductions, the
government has initiated a spending review. It will focus on pensions and social transfers (while preserving
basic social protection), defence spending (while leaving unaffected the national defence capacity) and
restructuring of central and local administrations. A further rationalization of pharmaceutical spending and
4. Program implementation and policy discussions
27
operational spending of hospitals, and welfare cash benefits will also be specified in the coming months. The
mission encouraged the government to draw on external technical assistance to prepare the spending review.
Box 3: Debt sustainability assessment
This box looks at the sustainability of the Greek sovereign debt in view of the latest macroeconomic developments,
PSI, OSI decision and the shift to a new official financing programme. The Greek government debt-to-GDP ratio is
projected until 2030, on the basis of a number of assumptions on real and nominal growth, primary surplus and other
financial transactions not captured in the ESA deficit, such as privatisation receipts and the recapitalisation of banks, as well
as on interest rates on official and market financing.
The projections show that Greece's public debt may return to a sustainable trajectory if the macroeconomic
projections materialise and the programme is fully implemented. Under a baseline scenario, the debt ratio-to-GDP would
decline to below 117 percent in 2020 and would keep declining to below 90 percent in 2030.
The main assumptions for the baseline debt projections are as follows:
! Economic activity. As discussed in this report, economic activity contracted by 6.9 percent in 2011. A further
contraction by 4¾ percent is projected for 2012. Positive growth rates are expected for 2014 as the economic activity
would stagnate (zero growth) in 2013. These are weaker growth rates than assumed in the autumn, given unfavourable
developments in the last quarter of 2011, and the deterioration in the macroeconomic outlook for Greece's trading
partners. The adoption in February 2012 of an ambitious package of labour market reforms (discussed in this report) will
reduce internal demand and output in 2012; however, by accelerating the internal devaluation it will help the recovery
from the second half of 2013 on. Provided that the agenda of structural reforms in product and service markets is
properly implemented, the previous projections for 2015-20 remain viable: Greece would register growth rates of
between 3 percent (at the beginning of this period and benefitting from the slack accumulated during the recession) to
2¼ percent, at the end of the decade. The economic activity would then decelerate to growth rates of 1½ percent per
annum when approaching 2030, on account of demographic developments.
! Deflator. The recession and the need of restoring competitiveness through an internal devaluation mean that the GDP
deflator will remain very low for several years. Negative inflation rates are expected for 2012 and 2013. The GDP
deflator would progressively converge to the euro area average (just below 2 percent) when approaching 2020.
! Fiscal stance. The baseline projections assume that the revised primary surplus targets for 2012-14 are met. Thus, the
primary balance would improve from a deficit of 1 percent of GDP in 2012 to a surplus of 4.5 percent of GDP in 2014.
While the primary accounts for 2011 and 2012 were/are weaker than assumed in the autumn report, the end-point for the
fiscal adjustment (2014: primary surplus of 4.5 percent of GDP) remains unchanged compared to the previous
projections. It should be noted that, while the measures that were announced by Greece for 2012 appear to suffice to
reach the 2012 target, there is still a sizeable fiscal gap for 2013-14 which will have to be bridged by deficit-reducing
measures. The debt projections have been prepared assuming that these measures will be promptly identified and
implemented so that the targets are met. After 2014, when Greece will eventually register an overall deficit below the
Treaty threshold of 3 percent of GDP, the primary surplus is assumed to remain high, although progressively declining
to 4 percent in 2021 and 3½ percent in 2030. Although these primary surpluses are ambitious, they are not without
precedent in international comparisons. Moreover, given the expected improvement in economic activity with a
progressive absorption in the output gap, they would be consistent with an effective relaxation of the cyclically-adjusted
fiscal stance from 2014 on.
! PSI. The debt projections take into account the debt exchange transaction which took place in March 2012 (see box).
The final impact on the Greek public debt of the debt exchange concerning foreign-law bonds will only be known by
end-March. It is assumed that no bondholders included in the debt exchange will be compensated ex post.
! OSI. The assumptions about OSI reflect the agreement reached at the Eurogroup meeting of 21 February 2012. Namely,
a reduction in the margin of the Greek Loan Facility (GLF) to a uniform 150 basis points; and the commitment by the
euro area Member States to transfer to Greece an amount which has been calculated based on the expected income
accruing on Greek bonds held by national central banks in their investment portfolio. The former reduces the debt ratio
by 2020 by 2.8 percent of GDP in 2020, and the latter by 1.8 percent of GDP. To ensure that these transfers will
effectively contribute to reduce the debt, the primary deficit/surplus targets are considered before these receipts.
European Commission
The economic adjustment programme for Greece
28
! Bank recapitalisation. The cost of the support to the Greek banking system is estimated at EUR 50 billion, EUR 10
million more assumed than in the previous compliance report. This reflects not only the impact of PSI, but also the
results of the diagnostic exercise by BlackRock.
! Privatisation. The privatisation receipts in the central scenario are in line with the revised programme targets. Although
the ultimate objective of Greece privatising EUR 50 billion of assets remains viable, such an objective will take much
longer to reach. The projections assume that EUR 12 billion receipts would be collected in 2012-14, and EUR 45 billion
until 2020. The assumed privatisation proceeds include EUR 16 billion of sales of shares bought by the State in the
context of the banks' recapitalisation.
! Other. The projections also take into account small technical differences between accrual and cash accounting, with the
latter driving the debt dynamics, the settlement of arrears to suppliers (discussed elsewhere in the report), and the Greek
contribution to ESM share capital. An increase in the cash buffer (currently EUR 3 billion) by EUR 5 billion is assumed
to be accumulated in 2013-14 to deal with unexpected developments in receipts and payments.
! Market access. The baseline projections assume Greece would be able to return to the medium- and long-term
financing market in 2015, although market access would be initially be at relatively short maturities. Projections show
that, provided market access is restored, small differences in spreads have only a small material impact on the
projections.
Graph 1. Debt sustainability assessment
Current baseline and autumn 2011 baseline
(% of GDP)
60
80
100
120
140
160
180
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Baseline
autumn 2011 baseline
As in previous projections, sensitivity scenarios illustrate the wide spectrum of outcomes, given policy choices and
macroeconomic developments. These scenarios show, in particular, that relatively small setbacks in terms of growth, because
of an unfavourable external context, or a slow implementation of structural reforms, may have a substantial unfavourable
impact on the debt dynamics. If the annual nominal growth rate is permanently lower than in the baseline scenario by 1
percentage point, the debt ratio in 2020 would be 129 percent of GDP. In contrast stronger growth rates (1 percent per year
above the baseline) would contribute to a debt ratio of 105 percent already in 2020.
To illustrate the impact of an incomplete fiscal adjustment, the debt was projected assuming that the primary surplus does not
exceed 1.5 or 2.5 percent of GDP, respectively and then remains stable at that level over the whole period. In these cases, the
reduction in the debt ratio will be much slower. Under the scenario according to which Greece does not manage to achieve a
primary surplus above 1.5 percent of GDP, the debt reduction would not become permanent, and the debt ratio could increase
again, as soon as the effect of privatisation disappears. Moreover, under the scenario with a primary surplus of 2.5 percent of
4. Program implementation and policy discussions
29
GDP, the debt ratio would be 131 percent of GDP in 2020 and stabilise at around 120 percent of GDP: a level that would not
be reached, in this case, before 2030.
In the case efforts to privatise State assets are blocked by market developments, or administrative and political obstacles,
with privatisation proceeds not exceeding EUR 10 billion by 2020, the debt ratio still declines if other parameters are
achieved. However, 2020, the debt ratio would still be above 130 percent of GDP.
A number of features may constitute a barrier to market access in 2015: after a reduction in the debt-to-GDP ratio in
2012, owing to the debt exchange, the debt ratio will increase again in 2013, given the contraction in nominal GDP and the
still low primary surplus. Under the current baseline projections, it is only in 2014 that the debt will start to progressively
decline from 164 percent of GDP in 2013 on the back of the fiscal adjustment effort, the return to growth and the
privatisation proceeds. Moreover, owing to the agreed co-financing structure, the restructured Greek bonds (estimated at
EUR 62 billion) will be senior to new debt issuances, which may complicate market access. Furthermore, the very large share
of Greek debt held by the official sector (two thirds of total debt at end-2014) may also discourage private investors owing to
a perceived subordination of debt to be issued after market access is regained.
Graph 2. Debt sustainability assessment
Baseline and alternative scenarios
60
80
100
120
140
160
180
2007 2012 2017 2022 2027
Baseline
Primary surplus not exceeding 1.5
% of GDP
Primary surplus not exceeding 2.5
% of GDP
Stronger growth (+1%)
Low growth (-1%)
Unsuccesful privatisation
30
Ta
ble
. D
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sust
ain
ab
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y a
sses
smen
t
Bas
elin
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io
in b
n E
UR
, unle
ss o
ther
wis
e no
ted
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2030
Fin
an
cin
g n
eed
s
A.
Gen
era
l g
overn
men
t ca
sh d
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1
2.2
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4.5
Pri
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2.0
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-9.7
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-11.0
-11.3
-13.4
Inte
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ts10.2
10.8
11.2
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GD
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203
208
216
225
235
245
256
266
383
Gen
eral
go
ver
nm
ent
deb
t (b
n E
UR
)356
327
333
335
331
327
322
319
315
310
337
Gro
ss d
eb
t (%
of
GD
P)
16
51
60
16
41
61
15
31
45
13
71
30
12
31
16
88
4. Programme implementation and policy discussions
31
4.3. STRUCTURAL FISCAL REFORMS
4.3.1. Privatisation
27. Although only a few transactions have occurred so far, mechanisms are progressively in place to
ensure a continuous supply of assets to the market. Due to negative market conditions, legal
complications and delays in implementing some intermediate steps, privatisation proceeds collected in
2011 were slightly below EUR 1.6 billion. In the months preceding the debt exchange operation
(PSI), the market was particularly hostile to Greek assets. Although the Privatisation Fund has
appointed the necessary technical, legal and financial advisers for the transactions that are expected
for 2012 and 2013, several assets are not yet mature enough for privatisation. The intermediate steps
include the restructuring of loss-making firms, state-aid clearance, rights clearance, and regulatory
changes, including the unbundling of utilities. All these intermediate steps are necessary to ensure
privatisation is successful in terms of receipts, but also that it contributes to the opening to
competition of some sectors. Concerning real estate, after long delays, a new General Secretariat for
Public Property has now become operational. It should accelerate the identification of assets to be
sold, and help in clear administrative steps like the reallocation of land uses.
28. The target of collecting EUR 50 billion in privatisation receipts remains viable, although over a
much longer horizon than envisaged initially. Annual revenue targets have been revised, whereby
at least EUR 5.2 billion should be collected by end-2012, EUR 9.2 billion by end-2013, EUR 14
billion by end-2014 and EUR 19 billion by end-2015. These figures are consistent with the debt
sustainability analyses prepared since autumn 2011, on the basis of which the euro-area summit
agreed in principle on designing a second programme.
Table 13: Privatisation plan: transactions so far
Assets Date of deal Stake sold
Remaining
stakes owned
by the Greek
Government
Proceeds
(cash, EUR
million)
Cumulative
since 2011
(EUR million)
Delayed
payment
OTE July 2011 10% 4% 392 392 -
OPAP 1 (license
extension 2020-
30)
October 2011 - - 375 767 85
(by Q4 2013)
OPAP 2 (sale of new
license for
VLTs)
October 2011 - - 474 1 241 85
(by Q4 2013)
Mobile
Telephony
Spectrum (license
extension)
December
2011 - - 317 1 558 -
Four aircraft
(sale)
February and
March 2012 - - - 1 558
31
(end-March
2012)
European Commission
The economic adjustment programme for Greece
32
Table 14: Planned privatisation receipts
Cumulative receipts,
cumulative since
2011
By the end of:
(EUR million)
2012 Q1 1 558
Q2 1 558
Q3 2 700
Q4 5 200
2013 9 200
2014 14 000
2015 19 000
4. Programme implementation and policy discussions
33
Table 15: Privatisation - transactions in the pipeline
Project Transferred Advisors Intermediate steps
to Fund by contracted by
I. State-owned enterprise/share sale
2012 Q1 Public Gas (DEPA) 1/ $ Call for tender launched in February 2012.
Q1 Public Gas (DESFA) 1/ $ Call for tender launched in February 2012.
Q1 Football Betting (OPAP) $ $ State aid clearance.
Q2 Hellenic Defense Systems (EAS) 1/ $ Clearance by Ministry of Defense. Adopt restructuring law by
April 2012. State aid clearance.
Q2 Hellenic Petroleum (HELPE) March 2012 2/ March 2012 Sign MoU with Paneuropean April 2012.
Q2 Horse Racing (ODIE) March 2012 2/ $ Adopt restructuring law and establish time-bound concession
rights by March 2012. State aid clearance.
Q2 Athens Water (EYDAP) March 2012 March 2012 Establish regulator and pricing policy by June 2012. Extend
Q2 Thessaloniki Water (EYATH) March 2012 March 2012 Establish regulator and pricing policy by June 2012. Extend
Q2 Mining and Metallurgical Company March 2012 2/ $ Adopt restructuring law by March 2012.
Q2 Hellenic Post (ELTA) 1/ March 2012 Adopt law determining the public service by February 2012.
Q2 Casino Mont Parnes 1/ March 2012 State aid clearance.
Q2 Electricity Company (PPC) 1/ March 2012 Restructuring to be decided by June 2012.
Q3 Hellenic Vehicle Industry (ELVO) 1/ March 2012 Adopt restructuring law by June 2012.
Q4 Railways (Trainose) 1/ August 2012 Ongoing restructuring and last phase of state aid clearance by
June 2012.
2013 Q1 Athens Airport (AIA) March 2012 2/ $
II. Concessions
2011 Q4 Hellenic Motorways $ March 2012 Complete negotiations. Parliamentary ratification of changes in
the concession. Establish regulatory framework by end of 2012.
Q4 State Lottery $ $ Expected financial offer from the three bidders by April 2012.
2012 Q2 Egnatia Odos $ March 2012 Unbundling into services/motorway rights. Establish regulatory
framework by end of 2012.
Q2 Small ports and marinas 1/ $ Identify proper policy. First lot of rights to be transferred by
March 2012. Establish regulatory framework by September
2012.
Q3 Regional airports $ March 2012 Identify proper policy. Establish regulatory framework by
September 2012.
Q4 Thessaloniki Port (OLTH) March 2012 2/ March 2012 Identify proper policy. All port shares voting rights to be
transferred by March 2012. Establish regulatory framework by
September 2012.
Q4 Piraeus Port (OLP) March 2012 2/ March 2012 Identify proper policy. All port shares voting rights to be
transferred by March 2012. Establish regulatory framework by
September 2012.
Q4 Large regional ports 1/ March 2012 Identify proper policy. All port shares voting rights to be
transferred by March 2012. Establish regulatory framework by
September 2012.
Q4 South Kavala Gas Storage $ March 2012 Clear legal obstacles by September 2012.
Mining rights
Digital Dividend
III. Real Estate
2011 Q4 Hellenikon 1 March 2012 2/ $ Adopt law on land use by March 2012.
2012 Q1 Sale/repo N buildings $ $ Government to sign rental contracts by May 2012. Transfer
clean title to the HRADF by May 2012.
Q1 Real Estate IBC March 2012 $ Strategic environmental study. ESCHADA to be issued by June
2012. 3/
Q1 Real Estate/Astir Vouliagmenis 1/ $ Negotiations with NBG. ESCHADA to be issued. Process led
by NBG by June 2012.
Q1 Real Estate/Cassiopi March 2012 $ Move NATO radar. ESCHADA to be issued by June 2012.
Q1 Real Estate lot 1 (Afantou) 1/ $ ESCHADA to be issued by June 2012.
Q2 Real Estate lot 2 1/ $ Identify assets by June 2012.
Q3 Real Estate lot 3 1/ $ Identify assets by September 2012.
Source: HRADF update on projects under development.
1/ Transfer of assets/rights at the point of privatization.
2/ Shares have already been transferred, but not yet voting rights.
3/ ESCHADA = Zoning and land planning permit.
Timing of Privatization
(Launch of Tender)
To be determined
To be determined
European Commission
The economic adjustment programme for Greece
34
4.3.2. Revenue administration, fight against tax evasion and tax reform
29. The tax reform has been delayed. The tax reform, whose adoption by Parliament was initially
planned for September 2011 and then postponed to March 2012, is now expected to be enacted by
end-June 2012. This revision in the time-schedule was in agreement with the staff teams, given that
the need to prepare the reform properly and in consultation with a wide range of stakeholders could
not be accommodated in view of other urgent tasks that are putting a strain on the authorities’
resources (such as the adoption of a wide range of prior actions for the new programme and PSI
implementation). However, to ensure that the process gains momentum now, the Government is
expected to announce a full schedule of intermediate steps already in March, to ensure consultation
and adequate review by the Commission, ECB and IMF staff. The reform should aim at making the
tax system simpler, lowering compliance costs, and improving its growth-friendliness. The reform
should concern personal income, corporate, VAT and property taxes, as well as the employers' social
contributions. In particular, the reform should decrease the high marginal rates on labour and broaden
tax bases. The mission was of the view that the tax burden from indirect taxes relative to direct taxes
and social contributions should not be reduced. Simplification of the tax system implies the need to
eliminate tax exemptions and preferential regimes, including those of a geographic nature. The reform
needs to be ambitious in scope but it has to be carefully designed to ensure it reaches its objectives
and is fiscally neutral.
30. The authorities committed to refrain from extending tax amnesties in the future. Greece has a
tradition of very frequent tax amnesties, partially in the form of very generous instalment plans for tax
debts. While some of them might have had a positive, albeit rather limited short-term impact on tax
collection, their frequent repetition has undermined incentives for tax compliance and the credibility
of the government in respect to its willingness and capacity to enforcing tax law, eroding tax morale
and thereby promoting evasion. The Government has committed to forego any new tax and social
contribution amnesties and to limit instalment plans to small debtors that can be clearly identified as
enduring acute financial hardship. In this respect, the Greek government repealed a recent law which
would have extended the payment terms for tax debt and overdue social security contributions.
31. Strengthening revenue administration and fighting tax evasion are amongst the top priorities of
the new programme. This is not only because of the need to increase revenue and reduce the
government deficit without further increases in tax rates. It is also important for the social
acceptability of the adjustment programme, as the reduction in tax evasion will lead to a fairer sharing
of the adjustment burden. Despite some progress, the implementation of those reforms has been slow
and results are not yet satisfactory. Tax and social security evasion may have actually increased in
2011, against the backdrop of negative economic growth and increased liquidity constraints of
taxpayers. To date, the government has adopted legislation and administrative reforms that aim at
enhancing the efficiency of tax administration and controls, putting in place effective project
management, and devising an anti-evasion strategy to restore tax discipline and improve compliance.
The focus has now shifted towards implementation and the increase in the number of tax audits
indicates that the government aims at stepping up its efforts in this regard. Furthermore, the
government is about to launch a new performance evaluation system of tax offices, which will help
strengthen incentive structures. The government has also initiated the process of merging local tax
offices and to equip them with a unified IT system, with a view to having it completed by end-2012.
Moreover, the Government is expected to adopt mechanisms to better protect whistle-blowers
reporting corruption in the tax administration, introduce procedures for the rotation of managers, and
set targets for audits of asset declarations of tax officials, leading to a fully-fledged anti-corruption
plan in the autumn 2012.
32. There are several parallel initiatives to improve tax collection. The most important are: a new tax
dispute resolution system which will make it compulsory to exhaust the administrative dispute phase
before moving on to the judicial stage; an increase in the number of tax auditors from 1 000 to 2 000;
4. Programme implementation and policy discussions
35
and the replacement of managers in tax offices that underperform relative to their performance targets
defined under the programme. The mission stressed the importance of making the tax administration
progressively more independent and accountable, with headquarters controlling local tax offices. It is
also critical to integrate the collection of taxes and social contributions and organise common audits in
the near future.
4.3.3. Expenditure control
33. Reforms to strengthen public expenditure management are progressing. Timely provision of
fiscal data has been improved due to the online submission of such data by line ministries, local
governments and legal entities. However, the system has to be further improved so as to also include
timely, comprehensive and accurate information on social security funds and on the public investment
budget. Expenditure control has also improved with the adoption of commitment registries in
ministries and other entities, which should effectively detect over-commitments and arrears for the
ordinary budget and the investment budget. The General Accounting Office has established a
coordination committee to monitor and strengthen the implementation of commitment controls to
prevent further accumulation of arrears.
34. The level of arrears remains high despite the current process of setting up commitment
registries. Although commitment registries are now operational in line ministries, the reform of
public finance management is delayed and the level of arrears is still high especially for the social
security funds and hospitals. The mission stresses that the high level of arrears, including in tax
refunds, has a very negative impact on the economy as a whole. It contributes to the lack of liquidity
in the economic system affecting mainly the private firms. In this regard, a settlement of arrears could
give a positive impulse to the economy indeed.
Table 16. Arrears to suppliers
(EUR million)
31-Dec-10 31-Mar-11 30-Jun-11 31-Jul-11 30-Sep-11 31-Dec-11
Total State 866.2 1 071.5 980.0 949.9 924.7 588.9
Local Government 577.0 852.8 917.4 955.8 928.5 817.8
Hospitals 1 522.9 1 687.1 1 848.6 1 747.4 1 700.8 1 281.2
Social Security Funds 2 086.4 2 388.0 2 594.8 2 684.1 2 716.1 2 825.6
Other government entities 284.4 245.0 230.3 221.9 233.7 219.1
Total General Government 5 336.8 6 244.4 6 571.1 6 559.1 6 503.8 5 732.5
Source: General Accounting Office.
4.3.4. Public administration, public procurement and social programmes
35. Public administration reforms are ongoing, although in certain cases it might take some time
before tangible results materialise. After the publication of the OECD report on the “Functional
Review of Public Administration in Greece” in December 2011, a new phase of reforms has started
with the authorities’ efforts reflecting the OECD recommendations in a law (which is currently still
under preparation) and the establishment of a concrete road map with the help of external technical
assistance. The aim is to tackle the basic deficiencies of the public administration in a comprehensive
manner. Progress has been made in the creation of a high-level transformation steering group under
the direct supervision of the Prime Minister, while an inter-ministerial coordination working group is
under way. Fifteen ministries are planned to be thoroughly restructured by this summer, starting with
the Ministry of Administrative Reform. Similar work is also being prepared at the regional and local
European Commission
The economic adjustment programme for Greece
36
levels. The reform of public administration should help the government become more effective, at a
time when public employment is falling.
36. The reduction in public employment has been slower than programmed, as the higher-than-
expected number of exits in 2011 was overcompensated by a higher-than-expected inflow. This
trend appears to be related to the lack of effective centralised coordination of public sector
employment decisions and the weak implementation of agreed measures aiming to reduce
employment. In particular, in 2011 new hiring exceeded the maximum level imposed by the 1:10
attrition rule (by which only one in ten employees exiting from the public sector in 2011 should be
replaced by a newly hired employee). Moreover, only a small number of redundant staff were
transferred to the labour reserve scheme. This slippage may have been counteracted by a tendency of
increased voluntary retirements which may have been induced by the establishment of the labour
reserve for redundant staff. The government has stated its commitment to reduce public employment
by at least 150 000 in the period 2011–15. To achieve this target, it is expected to strictly apply the
existing numerical rule between staff inflow and outflows, reduce contractual employment, and
transfer to the labour reserve for redundant staff 15 000 staff prior to their dismissal. The mission
stressed that the reduction in staff should not take place in an across-the-board manner, but by on a
targeted approach to identify redundancies in the different units or departments with administrative
overlap to other parts of the public sector and/or overstaffing. This targeted approach should be
supported by the ongoing public administration reform.
37. The Single Public Procurement Authority (SPPA), the new central body for the coordination of
public procurement policy and for the monitoring, planning and the implementation of procurement
procedures in Greece, needs to start operation. The government has delayed the issuing three key
ministerial decisions that are necessary for the authority to enter into force; these ministerial decisions
provide for the appointment of the members of the board of the SPPA, for the implementing
regulation of the authority, as well as for the establishment of positions and organization of human
resources in the SPPA. In parallel, following the signature of the contract for an e-procurement
platform, the first module on e-auctioning should be operational in March 2012.
38. Given the poor targeting of social programmes, there is quite some scope to generate additional
savings in this area, while, at the same time, more effectively protecting the most vulnerable. So
far, social policies in Greece seem to lack a stringent strategy on how to target those parts of society
that are truly in need of government assistance. In particular, while a wide-range of social benefits are
allocated without means-testing to particular groups of society which are not subject to acute social
hardship, certain groups of households at the lower end of the income distribution remain unprotected
and are subject to pronounced poverty risks. The OECD review under preparation is expected to
highlight areas where there is room for significant efficiency gains and savings can be generated,
while improving social fairness of the respective policies.
4.3.5. Healthcare and pension reform
39. Healthcare reform is a crucial component of Greece's fiscal consolidation efforts, given the high
share of public expenditure that is spent on healthcare. Despite efforts and some progress in reforming
the system, major weaknesses still need to be addressed to increase the efficiency, cost-effectiveness
and equity of the system. The institutional setup remains fragmented, leading to reduced policy
coherence. Corruption is reported, data availability is still inadequate; and the lack of effective
monitoring and control mechanisms for prescription of medicines is hampering the achievement of the
targets. In 2011, there were delays in the implementation of policy measures on pharmaceuticals.
Strong resistance by vested interests, combined with the lack of timely data and effective monitoring
mechanisms, has made healthcare reform difficult. However, progress has been observed in areas
4. Programme implementation and policy discussions
37
such as hospital accounting and centralised procurement, leading to some savings in the hospital
sector.
40. Major policy efforts are necessary in several areas. In particular, EOPYY, the new national health
organisation responsible for purchasing health services, needs to become fully operational in order to
induce savings through a more rational use of available resources. In order to reduce the
fragmentation and contribute to policy coherence, the Government has expressed the intention of
moving all health-related institutions and policies to the responsibility of the Minister of Health,
instead of the current distribution of tasks among the ministries of Health, of Labour and of Regional
Development. The rationalisation of the hospital network needs to be speeded up and operational
costs reduced further. A set of measures should be simultaneously implemented of such as
compulsory prescription by active substance (INN), compulsory e-prescription by doctors and
pharmacists, regular monitoring of doctors' prescription behaviour and their compliance with binding
prescription guidelines, mandatory generic substitution by pharmacies, further reduction of prices of
generics and off-patent medicines to move them closer to the prices paid in most other EU countries.
Moreover, the Government is putting in place an automatic claw-back mechanism (i.e. a rebate which
will be charged on pharmaceutical companies on a quarterly basis) will guarantee that outpatient
pharmaceutical spending for 2012-15 does not exceed the available annual financial envelope in the
budget.
41. A number of adjustments are still necessary to complete the pension reform. The reform of the
main pension schemes at the beginning of the adjustment programme has substantially improved the
dynamics of public pension expenditure. However, the supplementary pension schemes (including
welfare lump-sum schemes) remained unreformed, though both auxiliary pension and lump-sum
pensions of civil servants have been reduced in 2012. In the most recent projections by the National
Actuarial Authority, the budget of the supplementary pension schemes (and other, unreformed,
schemes) is projected to be consistently and increasingly in deficit over the coming decades: in 2011,
their deficit, about 0.4 percent of GDP, had to be financed through public resources. The current and
future deficit in several supplementary funds threatens the viability of these funds already in the short-
to medium-term and calls for both an immediate reduction in pension benefits and an in-depth
revision of their functioning. Moreover, the existing setup appeared to give rise to persistent inter- and
intra-generational differences, and as such is not socially equitable. The Government and mission staff
agreed that the forthcoming reform of the supplementary pension funds – initially via a framework
law, and later on, through other implementing acts – is of paramount importance to complete the
reform of the pension system and to ensure the long-term sustainability of public finances.
4.4. GROWTH-ENHANCING STRUCTURAL REFORMS
4.4.1. Labour market
42. In 2011, a number of measures were adopted to allow for a greater role of firm level
negotiations in the wage bargaining process There was action on three main inter-related fronts:
first, not extending occupational and sector collective agreements to non-signatory firms; second,
ensuring that firm-level agreements prevail over occupational and sector agreements by suspending
the so-called favourability clause; and, third, allowing firm-level agreements to be negotiated by
workers' associations (in addition to trade unions), with a view to increasing the number of firms that
can conclude those type of contracts. Although firm-level collective contracts have increased in
importance and helped some firms to adjust their labour costs, the continuing deterioration in
economic activity, the increase in unemployment, as well as the persistence of large external
imbalances is a clear indication that further labour market reforms are necessary—to allow wages and
European Commission
The economic adjustment programme for Greece
38
hours to adjust faster and in line with the needs of firms and economic activity more broadly, helping
to save jobs and create new employment opportunities.
43. A tripartite dialogue did not deliver a strategy to boost competitiveness and employment. In late
2011 and early 2012, the Government promoted discussions with, and between, the social partners.
However, the agreement reached between the social partners' representatives was not commensurate
with the needs of the Greek economy, and did not deliver a strategy to quickly address the large
challenges Greece is faced with. In a context of a sharp decline in employment, emergency action was
needed to ensure the quick responsiveness of wages to the fall in economic activity. The authorities
and the mission staff discussed and agreed on a package of actions to be taken by the Government in
the short term, which should contribute to reduce labour costs in the business sector by 15 percent
over the programme horizon.
44. The measures decided by the government build on two pillars: an adjustment of wage floors
and a revision of the collective bargaining system, with a view to spurring and easing contract
renegotiation and promoting wage flexibility. Frontloaded action is justified given the downward
rigidities in wage-setting systems, which have prevented the adjustment of private sector wages and
contributed to the sharp increase in unemployment, in particular among the low-skilled and youth.
The prompt adjustment in wages is particularly important in the context of the monetary union, as the
effective exchange rate needs to adjust through nominal prices and wages, rather than movements in
the nominal exchange. The downward wage flexibility helps viable companies to reduce their
production costs, thus creating a potential gains in external market shares, promote investment and
thus, to accelerate the much needed change in the structure of the economy. The mission noted,
however, that labour and product market reforms need to go in parallel to avoid that wage cuts simply
result in an increase in profit margins and rents, which could be socially damaging.
45. The Government has legislated a reduction in minimum wages. The wage floors in the National
General Collective Agreement (NGCA) have been reduced by 22 percent, or even by 32 percent for
those younger than 25. This is important as the level of minimum wages and of other wages regulated
by NGCA became more binding as the average wage declines. Thus, the reduction in the minimum
wage creates additional room for downward wage adjustment to be decided by employers and
employees in each firm or sector. In recent years, minimum wages in Greece ranked among the
highest in the EU, when compared, with prosperity indicators like the average wage or GDP per
capita. The Greek minimum wage is also nominally higher than in the main competitors, notably
neighbouring countries and other Southern European economies. By reducing minimum wage levels,
the government also aims to fight informality and undeclared work, pulling employment into the legal
sector, as well as helping to support the employment of low-skilled workers. The reduction in the
NGCA wages are expected to have a strong signalling role to other sectoral and firm-level wages. To
help this process, automatic wage increases (i.e. seniority bonuses) have also been suspended.
46. A broader reform of the wage setting system at national level will be prepared in the coming
months. The Government is expected to invite social partners to simplify the NGCA and to establish
a single-rate statutory minimum wage on a more permanent basis, similar to most other EU countries.
This is relevant as the current system sets different minimum wages according to, for instance, type of
work, education, marital status, and seniority, without these differences in wage levels necessarily
reflecting productivity. The overall objective of the reform will be to emphasise the nature of the
statutory minimum wage, notably to safeguard those workers that have less bargaining leverage, and
to avoid abuse.
4. Programme implementation and policy discussions
39
Graph 21. Recourse to arbitration to settle
negotiations disputes
0
5
10
15
20
25
30
35
National occupationalagreements
Local occupationalagreements
Sector agreement Firm-level agreement
%
% of agreements set through arbitration(1995-2010)
Source: Greek Government and Commission services calculations
Graph 22. Nominal Unit Labour Cost
(2001=100)
90
100
110
120
130
140
01-Q1 02-Q1 03-Q1 04-Q1 05-Q1 06-Q1 07-Q1 08-Q1 09-Q1 10-Q1 11-Q1
Greece[11-Q1] Eurozone[11-Q2]
Germany[11-Q4]Source: Eurostat and Commission services calculations
European Commission
The economic adjustment programme for Greece
40
Table 17: Minimum Monthly Wages
(EUR, annual wage divided by 12)
2001 2005 2008 2009 2010 2011
Belgium 1 129 1 210 1 323 1 388 1 388 1 429
Bulgaria 42 77 112 123 123 123
Czech Republic 145 238 318 303 307 324
Estonia 102 172 278 278 278 278
Ireland 977 1 238 1 462 1 462 1 462 1 462
Spain 506 599 700 728 739 748
France 1 105 1 252 1 301 1 329 1 344 1 365
Latvia 99 115 228 255 254 282
Lithuania 121 152 232 232 232 232
Luxembourg 1 274 1 467 1 590 1 662 1 704 1 758
Hungary 158 231 283 266 264 287
Malta 539 558 617 635 660 665
Netherlands 1 167 1 265 1 346 1 390 1 412 1 430
Poland 211 209 325 297 319 348
Portugal 390 437 497 525 554 566
Romania 49 82 138 146 139 158
Slovenia 391 490 553 589 666 748
Slovakia 102 168 255 296 308 317
United Kingdom 994 1 161 1 196 1 054 1 123 1 112
Greece 548 668 794 840 863 870 Source: Eurostat
47. The recently legislated reforms will give a big push to the re-negotiation of collective
agreements. In particular:
! Collective agreements can only be concluded for a maximum duration of 3 years. The
reason is that agreements that have a longer term, or without a fixed term may become inflexible
when an economy is going through a period of deflation to restore competitiveness.
! The regime of 'after effects' is revised. When a collective agreement expired it remained in
force for six months, after which its clauses became the basis of individual contracts. To promote
the renegotiation of collective agreements and restore the level-playing field between employers
and employees, the intermediate period following expiry is reduced to three months and – until a
new collective agreement or new individual contracts are agreed – total remuneration is
curtailed, as a number of allowances paid by firms are no longer applicable.
! Recourse to arbitration to settle negotiation disputes will be allowed only if both parties
(employee and employer representatives) agree to it. This is needed in order to ensure that
negotiation effectively takes place. This is expected to put an end to the very high recourse to
arbitration in Greece and the high share of agreements that used to be settled through arbitration.
! Privileged labour conditions in former state-owned firms will be better aligned with those
in the rest of the private sector. Privatised former SOEs are not competitive if they are forced
to inherit labour conditions from the public sector, which notably have included public-sector-
like tenure and very generous automatic wage increases. Such conditions will be aligned with
those in the wider private sector.
4. Programme implementation and policy discussions
41
48. Cuts in non-wage labour costs will also help the economy to become more competitive. Over the
coming quarters, social contribution rates are expected to be reduced by 5 percentage points. Given
the fiscal consolidation needs this must happen in a budget-neutral way, via a parallel reduction of
non-core social benefits. The reduction in non-wage labour costs should give an additional incentive
to employment creation. Additionally, formerly state-owned enterprises, have pension schemes that
entail higher contributions rates than for the general private sector scheme. This may lead to higher
production costs and hence prices. In so far as this concerns utilities, these costs are then effectively
spread over the whole economy. Such cases will be assessed through actuarial studies and where
necessary contributions and benefits will be adjusted.
49. The fight against undeclared work and social contribution evasion is very important. There is
evidence suggesting that the evasion of social contribution payments has increased in recent quarters.
Moreover, there has been less action in fighting social contribution evasion than in tax evasion. In this
context, increasing the effectiveness of the Labour Inspectorate is critical. Efforts to streamline social
contribution collection will have to be stepped up in the course of 2012.
4.4.2. Regulated professions
50. Work for the effective implementation of the 2011 law on professional freedom has finally
started in earnest. The government has updated the list of professions and economic activities falling
under the scope of this law and the line ministries have identified restrictions within the legislative
framework of each profession that conflict with it. The Hellenic Competition Commission (HCC) has
issued some opinions on the requests for derogations to the liberalizing provisions of that law
submitted by specific professions. Most of these opinions have been against reinstating previously
existing restrictions: a development that the mission has welcomed. These work streams should be
followed and enhanced by appropriate legislative amendments to the regulations of each profession to
ensure that restrictions are effectively identified and removed. With the support of external technical
assistance, the Government has started issuing circulars for a group of 20 professions and to finalize
all other amendments by end-year.
51. There have also been positive developments as regards the main regulated professions. Notaries'
fees have been cut by almost 30 percent as these are generally higher than in other euro area countries.
The mission has, however, expressed concerns that the planned increase in real estate legal values
could jeopardize such a reform and an additional cut in notarial fees would be warranted. The new
legislation providing for the freedom of incorporation of law firms in Greece and of law firms to open
branches is expected to increase competition, providing efficiency gains to Greek law firms and
benefits to clients. Moreover, the powers granted to the Technical Chamber of Greece to control
'unusually low fees' have been repealed. Looking forward, the mission argued that there remains a
need to change the rules governing minimum fees of lawyers, engineers and architects. At the same
time, additional measures are needed to increase the transparency of all professional bodies in
financial and disciplinary matters (an area where there has been limited progress, except for the legal
profession), as well as the urgent need to assess and revise the existing reserves of professional
services to holders of specific qualifications.
4.4.3. Energy and transport
52. Compliance with energy policy conditionality remains mixed. The priorities for the sector are
increasing competition in the generation side of the market, while at the same time catering for an
effective unbundling of transmission and distribution systems in gas and electricity. These
requirements should be considered against the backdrop of the privatisation process of gas and
electricity undertakings, scheduled for the next quarters. On electricity generation, measures agreed in
European Commission
The economic adjustment programme for Greece
42
previous quarters aim to give access to competitors to the lignite-fired generation capacity as well as
to hydro reserves of the Public Power Corporation (PPC), the state-owned vertically-integrated
electricity company. The Government has now committed to grant access to 40 percent of lignite
capacity to the incumbent's competitors by end-March 2012 and it has put forward the idea of selling
hydro plants, which could be combined with the sale of lignite plants.
53. Electricity and gas transmission systems need unbundling before privatisation. On electricity,
the transfer of assets and personnel to the unbundled transmission system operator (TSO) is now
likely to be finalized shortly. Regarding the gas company (DEPA/DESFA), the Greek authorities
introduced in December 2011 an amendment to the latest energy law to allow DEPA and DESFA to
be sold as a vertically-integrated company, in addition to the option of selling both companies
separately following the ownership unbundling of DESFA as originally provided for in that law.
Whilst the combined sale of DEPA and DESFA might be financially more attractive in the short term,
it may raise energy policy and security of supply issues. The mission has argued that the Greek
government should ensure strict adherence to the provisions of the so-called 'Third Energy Package,'
addressing also the concerns stemming from a potential joint sale of the two companies.
54. As transport opens up and implements its restructuring plans, subsectors are readier for
privatisation. The sector has rapidly changed in the last months. Road haulage is now open, with the
end of its transitional period in January 2012, and the reduction in costs for issuing new operator
licenses. The occasional passenger transport sector has been liberalised with the adoption of
secondary legislation in late 2011, and the Government expressed the intention of simplifying the
highly regulated structure of regular passenger transport. Concerning railways and regional airports,
which have been public monopolies so far, the respective firms are being prepared for privatisation.
Graph 23. Regulation of the airline industry
0
1
2
3
4
5
6
Bel
giu
m
Ger
man
y
Slo
vak
Rep
.
Net
her
lan
ds
Den
mar
k
Fra
nce
Sw
eden
Lu
xem
bo
…
Aust
ria
U.K
Hungar
y
Slo
ven
ia
EU
Spai
n
Ital
y
Fin
lan
d
Irel
and
Pola
nd
Est
on
ia
Port
ugal
Cze
ch R
ep.
Gre
ece
Note: 2008 data.
Data for Belgium, Germany and the Slovak Republic are equal to zero. Index scale of 0-6 from least to most restrictive.
Source: OECD, Economic Policy Reforms 2012 – Going for Growth (2012)
4.4.4. Business environment and reforms in product and service markets
55. The publication of the 'business-friendly Greece' (BFG) action plan continues to accumulate
delays. The action plan could serve as a communication tool on the Government's efforts to improve
the ease of doing business in Greece. In the meantime, a draft omnibus law has been tabled in
Parliament covering several of the actions that the BFG is expected to address, such as the provisions
on the new form of limited liability company, the simplification of the regulatory framework on
4. Programme implementation and policy discussions
43
exports, as well as the streamlining of archaic publication requirements of company data in
newspapers.
56. Draft legislation has also been prepared to strengthen the 'Invest in Greece' agency, the
strategic investment promotion agency. The objective is to adopt more flexible operational rules, as
well as enhancing its status vis-à-vis other government bodies involved in the licensing process and to
provide it with an adequate allocation of resources. The mission stressed, however, that strengthening
'Invest in Greece' should not reduce efforts to complete and simplify the general regulatory framework
of licensing for environmental purposes, for manufacturing activities, as well as the point of single
contact (PSC) for service providers. The rationale is that all investors and service providers should
benefit from speedier and more predictable procedures, not only those that have been identified as
strategic. The Government has pledged to complete the issuance of the pending implementing
legislation of both laws by the second quarter of 2012, with a clear view of simplifying procedures
and limiting permits and licenses in cases that are strictly need.
4.4.5. Absorption of structural funds
57. Changes in the co-financing rates have contributed to accelerate absorption of structural funds.
The annual target for the submission of 15 large projects was met, and the payment claims submitted
for reimbursement (EUR 3 301 million) were above 98 percent of the 2011 annual target. However,
this result would, most likely, not have been possible without the increase of the co-financing rate to
85 percent and the 10 percent top-up facility. This institutional change had a total financial impact in
2011 of EUR 958 million. Up to mid-February 2012, the absorption rate of the National Strategic
Reference Framework (NSRF), i.e., the reference document for the programming of European Union
Funds at national level, was above 40 percent, up from 25 percent one year earlier, and slightly above
the EU27 average of 35 percent.
4.4.6. Judicial reform
58. There has been progress in judicial reform. Steps have been taken to reduce the backlog of tax
cases in accordance with a work plan extending until July 2013 and which will be updated quarterly.
Moreover, on the backlog of non-tax cases an external advisory group of experts has been appointed
by the Government and concrete recommendations are expected in the second quarter of 2012. The
Government has continued to introduce various e-justice applications, including the launch of an e-
filing pilot project in the Athens Court of First Instance which, based on the e-justice work plan, will
accelerate procedures. A newly-established task force will oversee the gradual compilation and
publication of information on tax cases, civil cases and corporate insolvency cases starting from end-
March 2012, as the basis for the development of a performance and accountability framework.
59. Other initiatives also aim at increasing the efficiency of the judicial system. At the beginning of
March 2012, the Parliament adopted a multi-subject law addressing judicial case processing,
enforcement issues, the cost of civil litigation and the organisation of court and court officials. This
legislative initiative is without prejudice to the comprehensive review of the Code of Civil Procedure,
in line with international best practice. Also with the goal of increasing efficiency and accelerating
procedures, the Government has taken the first steps to promoting alternative dispute resolution,
especially mediation, within the business community. The law aims to set up magistrates courts as the
gateway to civil justice in Greece, by strengthening and concentrating voluntary jurisdiction at the
level of these courts, for example in matters relating to inheritance and setting up and administration
of legal entities. The Government has therefore embarked on the reorganisation of the magistrates
courts and the allocation of appropriate resources to the new court structure, deploying existing
resources available within Greece’s judiciary and public administration.
European Commission
The economic adjustment programme for Greece
44
4.5. FISCAL FINANCING AND TREASURY MANAGEMENT
60. The outstanding stock of T-bills remains large. After increasing substantially in the summer, the
stock of T-bills remained very high in autumn, as the fifth disbursement, initially planned for June
was delayed to July, and the sixth disbursement (which turned out to be the last of the first financing
programme) took place in December, instead of September. Greek banks and social security funds
were the main participants in short-term debt auctions. As a result, the Treasury was able to roll-over
maturing short term debt nearly in full and at a relatively low cost. The yields on Treasury bills were
thus slightly lower in the autumn auctions compared to the April to July auctions. The stock of short-
term debt was EUR 15.1 billion at end-2011. The second financing programme is expected to reduced
reliance on T-bills and the reduction in the outstanding stock of T-bills by EUR 8 billion in a gradual
manner.
Graph 24. Outstanding stock of T-bills
(EUR million)
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
Source: GAO.
Graph 25. T-bill auctions since July 2010
(amounts: EUR billion and yields)
4.05%
3.98%
3.75%
4.1%4.1%
3.85%
4.1% 4.06% 4.62% 4.58%4.50%
4.56% 4.61%4.63% 4.68%
4.64%
4.61%
4.65%
4.82%
4.54%
4.82%
4.9%
4.64%
4.75%
4.8% 4.88% 4.96% 4.90%
4.85%
4.80% 4.86%
4.89%4.95%
4.90%
4.86%
4.80%
0.0
1.0
2.0
3.0
4.0
5.0
Jul-10 Aug-10Sep-10 Oct-10Nov-10Dec-10 Jan-11 Feb-11Mar-11Apr-11May-11Jun-11 Jul-11 Aug-11Sep-11 Oct-11Nov-11Dec-11 Jan-12 Feb-12Mar-12
13w T-bills 26w T-bills
Source : PDMA
61. A mechanism to better tracing and monitoring the official borrowing and internally-generated
funds destined to service debt may contribute to improve Greece's credit standing. This
4. Programme implementation and policy discussions
45
mechanism includes a segregated account and the payment to this account before each quarter starts
of the necessary resources to service debt. However, the disbursements to Greece by the EFSF and the
IMF will still be conditional on compliance with conditionality. Moreover, the government has
expressed the intention of adopting legislation giving priority to the debt service vis-à-vis other cash
outflows. This legislation, the specific features of which still need to be discussed, could then find its
way into the Greek Constitution (as Spain did recently), as soon as a constitutional amendment is
possible.
Table 18. Interest rates and interest payments charged to Greece
by the euro area Member States
Date Interest
rate
Interest paid
EUR billion
Interest to be
reimbursed to Greece
(2nd
amendment of
facility agreement)
15 June 2010 3.423% 0.039 -
15 September 2010 3.719% 0.138 -
15 December 2010 3.879% 0.207 -
15 March 2011 4.026% 0.250 -
15 June 2011 4.173% / 2.673%** 0.408 0.147
15 September 2011 4.494% / 2.994%** 0.506 0.170
15 December 2011 4.528% / 3.028%** 0.539 0.179
15 March 2012* 4.426% / 2.926%** 0.527 0.179
* Calculated to be paid.
** Reduction of margin to 150 basis points flat. This reduction will be retroactively applied after the second Amendment enters into
force.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
46
Tab
le 1
9.
Sch
edu
le o
f d
isb
urs
emen
t fo
r th
e n
ew p
rogra
mm
e
(pro
vis
ion
al)
in b
n E
UR
, unle
ss o
ther
wis
e no
ted
Tota
l
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Fin
an
cin
g n
eed
s
A.
Gen
era
l g
overn
men
t ca
sh d
efi
cit
6
.91
.81
.81
.84
.21
.50
.70
.83
.20
.2-0
.9-0
.621.3
Pri
mar
y d
efic
it (
"-"
is s
urp
lus)
0.5
0.5
0.5
0.5
-0.9
-0.9
-0.9
-0.9
-2.3
-2.3
-2.3
-2.3
-11.0
Inte
rest
pay
men
ts6.4
1.3
1.3
1.3
5.2
2.4
1.6
1.7
5.5
2.5
1.5
1.7
32.3
o/w
inte
rest
on c
om
mer
cia
l fu
nd
ing
5.9
0.8
0.8
0.8
2.0
0.7
0.7
0.7
1.8
0.6
0.6
0.6
16.0
o/w
inte
rest
on E
U a
ssis
tance
0.4
0.3
0.3
0.3
3.0
1.5
0.6
0.6
3.4
1.6
0.5
0.8
13.4
o/w
inte
rest
on I
MF
ass
ista
nce
0.1
0.2
0.2
0.2
0.2
0.2
0.3
0.3
0.3
0.3
0.3
0.3
2.9
B.
Oth
er
go
vern
men
t ca
sh n
eed
s 1
.01
.21
.63
.01
.51
.91
.51
.51
.41
.81
.41
.419.1
Est
imat
ed c
ash a
dju
stm
ents
1.0
0.3
0.3
0.3
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.4
5.3
Arr
ears
0.0
0.0
1.3
2.7
0.8
0.8
0.8
0.8
0.0
0.0
0.0
0.0
7.0
Cas
h b
uff
er0.0
0.0
0.0
0.0
0.3
0.3
0.3
0.3
1.0
1.0
1.0
1.0
5.0
ES
M c
apital
0.0
0.9
0.0
0.0
0.0
0.5
0.0
0.0
0.0
0.5
0.0
0.0
1.8
C.
Ma
turi
ng
deb
t4
.86
.45
.32
.43
.77
.03
.81
.13
.31
1.9
7.7
2.4
59.9
Bo
nd
s &
lo
ans
afte
r ex
chan
ge
4.8
4.4
3.3
0.3
0.6
7.0
3.1
0.1
2.0
10.0
5.9
0.1
41.6
EU
rep
aym
ent
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
IMF
rep
aym
ent
0.0
0.0
0.0
0.0
0.0
0.0
0.7
1.0
1.3
1.9
1.9
2.3
9.1
Sho
rt-t
erm
deb
t (r
eductio
n w
ith o
ffic
ial fu
nd
s)0.0
2.0
2.0
2.0
3.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.2
D.
Co
st o
f P
SI
44
.51
0.0
23
.80
.00
.00
.00
.00
.00
.00
.00
.00
.078.3
Cas
h u
pfr
ont
29.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
29.5
Ban
k r
ecap
ital
isat
ion
15.0
10.0
23.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
48.8
E.
Gro
ss f
ina
ncin
g n
eed
s (A
.+B
.+C
.+D
.)5
7.1
19
.53
2.5
7.2
9.4
10
.55
.93
.47
.91
3.9
8.2
3.2
178.6
Fin
an
cin
g s
ou
rces
F.
Pri
va
te f
ina
ncin
g s
ou
rces
0.0
0.9
1.2
2.2
1.1
1.7
1.1
1.1
1.1
1.6
1.1
1.1
14.1
Mar
ket
fin
ancin
g0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Pri
vat
isat
ion 1
/0.0
0.0
1.0
2.2
1.1
1.1
1.1
1.1
1.1
1.1
1.1
1.1
11.8
G.
Ad
dit
ion
al
OS
I0
.00
.90
.20
.00
.00
.60
.00
.00
.00
.50
.00
.02.2
GL
F m
argin
red
uctio
n (
retr
oac
tive
app
licat
ion)
0.0
0.2
0.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
AN
FA
pro
fits
0.0
0.7
0.0
0.0
0.0
0.6
0.0
0.0
0.0
0.5
0.0
0.0
1.7
H.
Fin
an
cin
g n
eed
s p
er
qu
art
er
57
.11
8.6
31
.35
.08
.38
.84
.82
.36
.81
2.3
7.1
2.1
164.5
I. O
ffic
ial
ass
ista
nce d
isb
urs
em
en
ts
75
.73
1.3
5.0
8.3
8.8
4.8
2.3
6.8
12
.37
.11
.01
.0164.5
I
MF
dis
burs
emen
ts*
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
19.8
E
U d
isb
urs
emen
ts74.0
29.6
3.4
5.6
8.2
3.2
0.6
5.1
10.7
1.9
1.9
0.4
144.7
20
12
20
13
20
14
4. P
rog
ram
me
imp
lem
en
tatio
n a
nd
po
licy d
isc
uss
ion
s
47
47
So
urc
e: C
om
mis
sio
n s
erv
ices
.
European Commission
The economic adjustment programme for Greece
48
Box 4: Private Sector Involvement
In line with the conclusions of the euro area summit of 26 October 2011, Greece organised a debt exchange to which
the euro area Member States agreed to contribute up to EUR 30 billion via an EFSF loan. On 21 February 2012, the
Eurogroup acknowledged the common understanding that has been reached between the Greek authorities and its
private creditors on the general terms of the debt exchange offer. This common understanding provided for a nominal
haircut amounting to 53.5 percent.
Exchange Offer. On 24 February 2012, Greece launched an exchange offer for bonds with an aggregate outstanding
face amount of approximately EUR 206 billion. The exchange offer allowed private sector holders to exchange
eligible bonds for:
i) new bonds to be issued by Greece with a face value of 31.5 percent of the face amount of their exchanged bonds;
ii) EFSF notes with a maturity date of two years or less and having a face value of 15 percent of the face amount of
their exchange bonds, and
iii) detachable GDP-linked securities issued by Greece.
iv) on the PSI settlement date, Greece also delivers short-term EFSF notes in discharge of all unpaid interest accrued
on the exchanged bonds.
Maturity and coupon. The new Greek bonds have a term of 30 years (final maturity is in 2042) and an amortization
period starying on the eleventh anniversary of the issue date. They bear a coupon of 2.0 percent p.a. to the payment
date in 2015, 3.0 percent p.a. to payment date in 2020, 3.65 percent p.a. to payment date in 2021 and 4.3 percent p.a.
thereafter. Interest accrues starting from 24 February 2012.
English law and co-financing structure. The new bonds are governed by English law and contain standard market
clauses such as pari passu, negative pledge, events of default, collective action clauses and a waiver of immunity.
Holders of the new bonds will be entitled to benefit from a co-financing agreement among Greece, the new bond
trustee and the EFSF by linking the servicing of their bonds to the EFSF loan (up to EUR 30 billion). This will be
made effective by the appointment of a common paying agent, an inclusion of a turnover covenant, payments of
principal and interest on the new bonds and the EFSF loan on the same dates as the EFSF loan and on a pro rata
basis.
GDP-linked securities. In case of an increase of the Greek nominal GDP above a defined threshold and of a positive
GDP growth in real terms in excess of specified targets, the GDP-linked securities provide an amount of up to 1
percent of their notional amount for all annual payments beginning in 2015.
Credit Rating Action. On 27 February 2012, Greece had its long-term sovereign credit ratings cut from CC to SD
(selective default) by Standard & Poor’s Ratings Services, which called the action of Greece’s government regarding
its sovereign debt as a 'distressed debt restructuring.' The downgrade was triggered after Greece retroactively inserted
collective action clauses (CACs) in the documentation of certain sovereign debt series. On 9 March 2012, following
the confirmation from the Greek government that the exchange of Greek government bonds would proceed, Fitch
Ratings also downgraded Greek credit rating from C to RD (restricted default). Moody's Investor Service, which
downgraded the Greek rating from Ca to C on 2 March 2012, stated on 9 March 2012 that it considers Greece to have
defaulted. Greece's government bond rating remains unchanged at C, the lowest rating on Moody's rating scale.
The Law on CACs. The Law on "Rules on the modification of titles issued or guaranteed by the Greek State with the
Bondholders' agreement" was voted by the Greek Parliament on 23 February 2012. This Law introduced provisions
whereby bondholders may adopt by the qualified majority decisions that are binding on all holders of all eligible
titles. Only bonds governed by Greek law and issued or guaranteed by the State before 31 December 2011 fall within
the scope of this Law, which therefore, does not capture bonds governed by foreign law. Following the PSI invitation
deadline, the Greek Council of Ministers decided on 9 March 2012 to approve the bond holders decision to accept the
bond exchange. This decision binds all bondholders of eligible titles.
Foreign law bonds. In relation to bonds governed by foreign law, existing collective action clauses that are part of
the terms and conditions of those bonds may be used. The expiry date for the invitation on participation in the PSI for
the bonds governed by foreign law was extended until 23 March 2012 and bondholder meetings are planned to be
held on 27–29 March 2012 with a view to vote on the activation of CACs.
4. Programme implementation and policy discussions
49
Result of the Debt Exchange Offer. From a total of EUR 177 billion of Greek sovereign bonds governed by Greek
law and eligible to the exchange offer, Greece received tenders for exchange and consents from holders of EUR 152
billion of bonds, representing 85.8 percent of the outstanding face amount of these bonds. Holders of 5.3 percent of
the outstanding face amount of these bonds participated and opposed the proposed amendments. Greece has also
received tenders for exchange and consents to the proposed amendments from holders of approximately EUR 20
billion, or 69 percent, of its bonds issued under foreign law and of bonds issued by state-owned enterprises and
guaranteed by the Republic. The sum of the face amount of those bonds that will be exchanged and of the other bonds
eligible to the exchange offer for which Greece has received tenders for exchange and consents to the proposed
amendments amount to approximately EUR 197 billion, or 95.7 percent of the eligible bonds.
Table. Outcome of the Debt exchange offer (March 2012)
CategoryTotal Outstanding
Principal Amount EUR
Tendered for Exchange
and Vote In Favour
EUR
Consent and Vote
In Favor
%
Reject and Vote
Against
EUR
Reject and
Vote Against
%
GGB Greek Law € 177,252,131,542.39 € 152,042,932,772.40 85.8% € 9,308,013,293.14 5.3%
GGB Foreign Law € 18,644,227,751.00 € 12,680,381,327.41 68.0% € 588,146,961.51 3.1%
SOE € 9,671,766,956.00 € 6,832,321,956.00 70.6% € 462,762,000.00 4.9%
SOE Greek Law € 6,701,326,956.00 € 6,366,276,956.00 95.0% € 0.00 0.0%
SOE Foreign Law € 2,970,440,000.00 € 466,045,000.00 15.7% € 462,762,000.00 15.6%
Total € 205,568,126,249.39 € 171,555,636,055.81 83.5% € 10,358,922,254.65 5.0% Source: PDMA
Extension. Greece has decided to extend the invitation period until 23 March 2012 in respect of each series of its
bonds issued under laws other than Greek law and of bonds issued by state enterprises and guaranteed by Greece, to
allow holders of those bonds who have not yet tendered them for exchange or submitted consents to do so, and has
deferred the settlement date for the exchange offer until 11 April 2012. However, holders of such bonds will not have
the right to revoke any participation instructions previously submitted, unless otherwise permitted pursuant to the
relevant invitation. In addition, the government confirmed that it intends to issue an invitation to the holders of Greek
law-governed bonds issued by state enterprises and guaranteed by the Republic, including bonds that have been
tendered in the exchange offer but have not been accepted by the Republic, soliciting consents to amend these bonds
as contemplated by the Greek Bondholder Act in a manner similar to the amendments proposed for the Republic’s
bonds governed by Greek law.
Credit Default Swaps (CDS). On 9 March 2012, the International Swaps and Derivatives Association (ISDA)
Determinations Committee decided that the invoking of the collective action clauses by Greece to force all holders to
accept the exchange offer for existing Greek debt constituted a restructuring credit event under the 2003 ISDA Credit
Derivatives Definitions. According to the Depository Trust and Clearing Corporation’s CDS data warehouse, the
total net exposure of market participants who have sold CDS credit protection on Greek sovereign debt was
approximately USD 3.2 billion as of 2 March 2012. Market participants will conduct an auction through which the
recovery value of Greek debt and the net payouts to be made under CDS contracts will be determined. The
Determinations Committee decided that an auction will be held in respect of outstanding Greek sovereign CDS
transactions on 19 March 2012.
4.5. TECHNICAL ASSISTANCE AND MONITORING
62. Greece is receiving technical assistance coordinated by the Commission's taskforce and
provided by the Commission, Member States, the IMF and other sources. Technical assistance
(TA) concerns several areas which are crucial for the success of the programme, such as tax
administration and fight against tax evasion, public financial management, the reform of the public
administration, as well as in a range of projects improving the business environment. By providing
advice based on best practice, TA contributes to enhancing the government's capacity to implement
policies. It also helps to increase programme ownership, via the exchange of views and policy options
between the government and the TA providers. (For more details on the several TA projects, the
reader is referred to the quarterly reports by the Commission's Taskforce.) Greece, the Eurogroup and
European Commission
The economic adjustment programme for Greece
50
the Commission have agreed TA should help further strengthening of Greece's institutional capacity
in delivering the agreed policies. With this objective in mind, the Commission is significantly
strengthening its presence on the ground in Greece. This will bolster its capacity to provide and
coordinate technical assistance. Moreover, a continuous monitoring will contribute to the timely and
full implementation of the programme.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
51
An
ne
x 1
: A
sse
ssm
en
t o
f c
om
plia
nc
e w
ith
th
e
Me
mo
ran
du
m o
f U
nd
ers
tan
din
g o
n S
pe
cific
Po
lic
y C
on
ditio
na
lity
(fifth
up
da
te,
31
Oc
tob
er
20
11
)
Ta
ble
A1
- F
isca
l C
on
soli
da
tio
n
Bu
dg
et i
mp
lem
enta
tio
n
Th
e G
ov
ern
men
t im
ple
men
ts t
he
rev
enue
and
ex
pen
dit
ure
po
lici
es a
gre
ed i
n t
his
an
d p
rev
iou
s m
emo
ran
da
wit
h t
he
aim
of
min
imis
ing
any
def
icit
in
exce
ss o
f th
e d
efic
it c
eili
ng
of
EU
R 1
7 0
65
mil
lio
n i
n 2
01
1,
and
to
red
uce
th
e 2
01
2 d
efic
it t
o b
elo
w
EU
R 1
4 9
16 m
illi
on
, as
est
abli
shed
in t
he
Co
un
cil
Dec
isio
n.
Pa
rtia
lly
ob
serv
ed.
Th
e 2
01
1 g
ov
ern
men
t d
efic
it (
ES
A)
is c
urr
entl
y e
stim
ated
to
hav
e b
een
cl
ose
to
E
UR
2
0
bil
lio
n;
i.e.
ab
ov
e th
e ce
ilin
g
esta
bli
shed
in
May
20
10.
Ho
wev
er,
mo
st p
erfo
rman
ce c
rite
ria
for
Q4
-20
11
hav
e b
een
ob
serv
ed.
Qu
art
erly
per
form
an
ce c
rite
ria (
EU
R b
illi
on
)
C
rite
ria
A
ctu
al
Flo
or
on
the
mod
ifie
d g
ener
al g
ov
ern
men
t p
rim
ary
cas
h b
alan
ce
-5.1
-4
.8
Ob
serv
ed.
Cei
lin
g o
n S
tate
Bu
dg
et p
rim
ary
sp
end
ing
6
0.8
5
9.1
O
bse
rved
.
Cei
lin
g o
n t
he
ov
eral
l st
ock
of
cen
tral
go
ver
nm
ent
deb
t 3
94
.0
37
1.0
O
bse
rved
.
Cei
lin
g o
n t
he
new
gu
aran
tees
gra
nte
d b
y t
he
centr
al g
over
nm
ent
1.0
0
.6
Ob
serv
ed.
Cei
lin
g o
n t
he
accu
mu
lati
on
of
new
ex
tern
al p
aym
ents
arr
ears
on
ex
tern
al d
ebt
con
trac
ted
or
gu
aran
teed
by
gen
eral
go
ver
nm
ent
0
0
O
bse
rved
.
Flo
or
on
pri
vat
isat
ion r
ecei
pts
1
.7
1.6
P
art
iall
y o
bse
rved
(se
e b
elo
w)
Th
e G
ov
ern
men
t ad
op
ts a
nd
im
ple
men
ts t
he
foll
ow
ing
mea
sure
s p
rior
to t
he
sixth
dis
bu
rsem
ent
(i.e
. in
Dec
emb
er 2
01
1):
-A r
edu
ctio
n i
n t
ax e
xem
pti
on
s, i
n p
arti
cula
r th
e ta
x-f
ree
per
son
al i
nco
me
thre
sho
lds,
wit
h t
he
aim
of
incr
easi
ng
rev
enu
e by
at
leas
t E
UR
2 8
31 m
illi
on i
n 2
01
2;
-A p
erm
anen
t le
vy
on r
eal
esta
te,
coll
ecte
d t
hro
ugh t
he
elec
tric
ity
invoic
es,
wit
h t
he
aim
of
coll
ecti
ng a
t le
ast
EU
R 1
667
mil
lio
n i
n 2
01
1, an
d i
ncr
easi
ng
am
ou
nts
in
su
bse
qu
ent
yea
rs;
-An
im
med
iate
im
ple
men
tati
on
of
the
rev
ised
wag
e g
rid
fo
r ci
vil
ser
van
ts,
wh
ich
co
ntr
ibu
tes
to r
edu
ce e
xp
endit
ure
by
at
leas
t
EU
R 1
01
mil
lio
n i
n 2
01
1,
and
wit
h a
car
ry o
ver
of
at l
east
EU
R 5
52
mil
lio
n f
or
20
12
, ad
dit
ional
to
sav
ing
s p
rov
ided
in
th
e
MT
FS
(M
ediu
m-T
erm
F
isca
l S
trat
egy
th
rou
gh
2
01
5,
of
Jun
e 2
01
1).
T
his
re
form
sh
ou
ld co
ver
al
l g
ener
al g
ov
ern
men
t
emp
loy
ees,
exce
pt
tho
se c
over
ed b
y s
pec
ial
wag
e re
gim
es.
Th
ese
net
sav
ing
s ta
ke
into
acc
ou
nt
the
imp
act
of
this
mea
sure
on
inco
me
tax
an
d s
oci
al s
ecuri
ty c
oll
ecti
on,
as w
ell
as b
on
use
s to
be
pai
d t
o s
pec
ific
em
plo
yee
cat
ego
ries
;
-A c
ut
in m
ain,
and
su
pp
lem
enta
ry,
pen
sio
ns,
as
wel
l as
in l
um
p s
um
s pai
d o
n r
etir
emen
t, w
ith t
he
aim
of
savin
g a
t le
ast
EU
R
21
9 m
illi
on i
n 2
01
1 w
ith
a c
arry
ov
er o
f E
UR
446
mil
lio
n i
n 2
012
, ad
dit
ional
to s
avin
gs
pro
vid
ed f
or
in t
he
MT
FS
;
-Sp
end
ing
by
the
Gre
en F
un
d i
s ca
pp
ed a
t 5 p
erce
nt
of
thei
r dep
osi
ts,
wit
h t
he
aim
of
sav
ing
EU
R 3
60
mil
lio
n i
n 2
01
2.
Ob
serv
ed.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
52
Th
e G
ov
ern
men
t al
so a
do
pts
th
e fo
llo
win
g
acts
(w
hic
h c
on
cern
mea
sure
s in
clu
ded
in
the
MT
FS
), p
rior
to t
he
sixth
dis
bu
rsem
ent:
-Min
iste
rial
Dec
isio
ns
or
circ
ula
rs t
o s
tart
co
llec
tio
n o
f ex
cise
s o
n n
atu
ral
gas
, hea
tin
g o
il a
nd v
ehic
le t
ax m
easu
res;
-Min
iste
rial
Dec
isio
ns
to u
nif
orm
ly r
egu
late
hea
lth
ben
efit
s fo
r so
cial
sec
uri
ty f
un
ds;
-Leg
isla
tio
n f
or
the
coll
ecti
on
of
the
soli
dar
ity
surc
har
ge
thro
ug
h w
ith
ho
ldin
g;
-Min
iste
rial
Dec
isio
ns
that
in
itia
te c
losi
ng
, m
erg
ing
or
sub
stan
tial
ly d
ow
nsi
zin
g e
nti
ties
are
ad
opte
d.
Th
is a
ffec
ts K
ED
, E
TA
,
OD
DY
, N
atio
nal
Yo
uth
In
stit
ute
, E
OM
EX
, IG
ME
, O
SK
, D
EP
AN
OM
, T
HE
MIS
, E
TH
YA
GE
an
d E
RT
, an
d 3
5 o
ther
sm
alle
r
enti
ties
sp
ecif
ied i
n t
he
'sec
on
d i
mp
lem
enta
tio
n b
ill';
-Min
iste
rial
Dec
isio
ns
spec
ify
ing t
he
dis
abil
ity
cri
teri
a co
nsi
sten
t w
ith
ach
ievin
g t
he
MT
FS
sav
ing o
bje
ctiv
es;
-A L
aw t
o f
reez
e th
e in
dex
atio
n o
f m
ain a
nd
su
pp
lem
enta
ry p
ensi
on
s th
rou
gh
20
15
;
-Fin
alis
e th
e p
osi
tiv
e li
st f
or
ph
arm
aceu
tica
ls t
hat
est
abli
sh p
rice
s ch
arg
ed t
o s
oci
al s
ecu
rity
fu
nd
s.
Ob
serv
ed.
Th
e G
ov
ern
men
t p
rep
ares
th
e b
ud
get
fo
r 2
01
2 [
No
vem
ber
20
11]
in l
ine
wit
h t
he
MT
FS
tar
get
s, t
his
Mem
ora
nd
um
, an
d t
he
Co
un
cil
Dec
isio
n's
def
icit
cei
ling
s. I
nfo
rmat
ion
on
th
e se
ver
al m
easu
res
pro
vid
ed f
or
in t
he
MT
FS
wil
l b
e u
pd
ated
an
d m
ade
pu
bli
c.
Th
e se
ver
al t
ax a
nd
ex
pen
dit
ure
leg
isla
tive
acts
th
at a
re n
eces
sary
to
im
ple
men
t th
e b
ud
get
are
ado
pte
d a
t th
e sa
me
tim
e o
f
the
bu
dget
. [D
ecem
ber
2011]
Ob
serv
ed.
In o
rder
to
pre
par
e th
e m
easu
res
that
wil
l b
e ad
op
ted
wit
h t
he
201
3 a
nd
20
14 b
ud
get
s, t
he
Go
ver
nm
ent
init
iate
s a
rev
iew
of
pu
bli
c ex
pen
dit
ure
pro
gra
mm
es t
hat
sh
ou
ld b
e co
mp
lete
d b
y J
un
e 2012,
wit
h t
he
aim
of
iden
tify
ing m
easu
res
amo
un
tin
g t
o 3
per
cent
of
GD
P (
incl
udin
g o
ne
per
cen
t o
f G
DP
in
co
nti
ng
ency
mea
sure
s).
The
revie
w w
ill
dra
w o
n e
xte
rnal
tec
hn
ical
assi
stan
ce a
nd
wil
l fo
cus
on
pen
sio
ns
and
so
cial
tra
nsf
ers
(in
a m
ann
er t
hat
wil
l p
rese
rve
bas
ic s
oci
al p
rote
ctio
n);
def
ence
spen
din
g w
ithout
pre
judic
e to
th
e def
ence
cap
abil
ity
of
the
countr
y;
and r
estr
uct
uri
ng o
f ce
ntr
al a
nd l
oca
l ad
min
istr
atio
ns.
By
the
sam
e d
ate,
ad
just
men
ts t
o s
pec
ial
wag
e re
gim
es;
furt
her
rat
ional
izat
ion
of
ph
arm
aceu
tica
l sp
end
ing
an
d o
per
atio
nal
spen
din
g o
f h
osp
ital
s, a
nd w
elfa
re c
ash
ben
efit
s w
ill
also
be
spec
ifie
d.
No
t ye
t a
ppli
cable
.
Th
e M
inis
try
of
Fin
ance
en
sure
s a
tig
ht
sup
ervis
ion
of
exp
end
iture
co
mm
itm
ents
by
the
go
ver
nm
ent
dep
artm
ents
, in
clu
din
g
extr
a-b
ud
get
ary
fu
nd
s, p
ub
lic
inv
estm
ent
bu
dg
et,
soci
al s
ecu
rity
fu
nd
s an
d h
osp
ital
s, l
oca
l g
ov
ern
men
ts a
nd
sta
te-o
wn
ed
ente
rpri
ses,
an
d a
n e
ffec
tive
tax
co
llec
tio
n,
in o
rder
to
sec
ure
th
e p
rog
ram
me
qu
anti
tati
ve
crit
eria
(A
rtic
le 1
(2
an
d 3
) o
f th
e
Co
un
cil
Dec
isio
n,
and o
f th
e M
EF
P).
Th
e G
ov
ern
men
t st
and
s re
ady
to d
efin
e an
d e
nac
t ad
dit
ional
mea
sure
s, i
f n
eed
ed,
in o
rder
to
res
pec
t th
e b
ud
get
ary
cei
lin
gs
esta
bli
shed
in t
he
Co
un
cil
Dec
isio
n.
Ob
serv
ed.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
53
Tab
le A
2-S
tru
ctu
ral
Ref
orm
s
C
om
men
ts
Ass
et m
an
ag
emen
t a
nd
pri
vati
sati
on
Th
e G
ov
ern
men
t im
ple
men
ts t
he
pri
vat
isat
ion p
rog
ram
me
wit
h t
he
aim
of
coll
ecti
ng
EU
R 3
5 b
illi
on
by
en
d-2
01
4 a
nd
EU
R
50
bil
lio
n b
y e
nd-2
01
5 (
see
cum
ula
tive
quar
terl
y t
arget
s in
Annex
1,
plu
s th
e ban
k e
quit
y a
cquir
ed t
hro
ug
h r
ecap
ital
isat
ion
).
Th
e G
ov
ern
men
t st
and
s re
ady
to
off
er f
or
sale
its
rem
ain
ing
sta
kes
in
sta
te-o
wn
ed e
nte
rpri
ses,
if
nec
essa
ry i
n o
rder
to r
each
the
pri
vat
isat
ion o
bje
ctiv
es.
Pu
bli
c co
ntr
ol
wil
l b
e li
mit
ed o
nly
to
cas
es o
f cr
itic
al n
etw
ork
in
fras
truct
ure
.
Pa
rtia
lly
ob
serv
ed.
Co
mp
ared
to t
he
targ
et o
f E
UR
1 7
00 m
illi
on (
whic
h w
as
def
ined
io
n a
cas
h b
asis
), t
he
Go
ver
nm
ent
coll
ecte
d E
UR
1 5
58
mil
lio
n i
n c
ash
(si
nce
Ju
ne
20
11
).
To
en
sure
that
the
pla
n o
bje
ctiv
es a
re a
chie
ved
, th
e G
over
nm
ent
conti
nuousl
y t
ransf
ers
asse
ts t
o t
he
Hel
len
ic R
epub
lic
Ass
et
Dev
elopm
ent
Fund (
HR
AD
F).
In
par
ticu
lar,
pri
or
to t
he
sixth
dis
bu
rsem
ent,
it
wil
l tr
ansf
er t
o t
he
pri
vat
isat
ion
fun
d t
he
foll
ow
ing
ass
ets:
Alp
ha
Ban
k (
0.6
19
% o
f sh
ares
);
Nat
ion
al B
ank o
f G
reec
e (1
.23
4%
of
shar
es);
Pir
aeu
s B
ank (
1.3
08
% o
f sh
ares
);
Pir
aeu
s P
ort
Au
tho
rity
(2
3.1
% o
f sh
ares
);
Th
essa
lon
iki
Po
rt A
uth
ori
ty (
23.3
% o
f sh
ares
);
Ele
fsin
a, L
avri
o,
Igo
um
ents
ia,
Ale
xan
dro
po
uli
s, V
olo
s, K
aval
a, C
orf
u,
Pat
ras,
Raf
ina,
Her
akli
on p
ort
auth
ori
ties
(1
00
%);
Ath
ens
Wat
er a
nd
Sew
erag
e C
om
pan
y (
27.3
%);
Thes
salo
nik
i W
ater
and S
ewer
age
Co
mp
any
(4
0%
);
Reg
ional
sta
te a
irport
s (t
ransf
er o
f co
nce
ssio
n r
igh
ts);
Off
-sh
ore
nat
ura
l g
as s
tora
ge
faci
lity
'So
uth
Kav
ala'
(tr
ansf
er o
f ri
gh
ts o
f cu
rren
t an
d f
utu
re c
once
ssio
ns)
;
Hel
lenic
mo
torw
ays
(tra
nsf
er o
f ec
on
om
ic r
ights
of
curr
ent
and
futu
re c
once
ssio
ns)
;
Eg
nat
ia o
do
s (1
00
%);
Hel
lenic
Po
st (
90
%);
OP
AP
, S
A (
29%
)
4 s
tate
buil
din
gs.
Th
e le
gal
, te
chn
ical
an
d f
inan
cial
ad
vis
ors
fo
r at
lea
st f
ou
rtee
n o
f th
ese
tran
sact
ion
s th
at a
re p
lan
ned
un
til
end
-20
12 a
re
app
oin
ted
pri
or
to t
he
sixth
dis
bu
rsem
ent.
Ob
serv
ed.
Fo
r th
e oth
er t
ran
sact
ion
s pla
nn
ed f
or
20
12, ad
vis
ors
are
ap
po
inte
d b
y e
nd
-Novem
ber
2011
Pa
rtia
lly
ob
serv
ed.
10
ou
t o
f th
e 1
4 p
roje
cts
for
20
12
an
d 6
ou
t o
f 1
7 p
roje
cts
for
2013 a
re f
ull
y s
taff
ed
Th
e G
ov
ern
men
t co
nti
nu
es c
om
pil
ing
an
d p
ubli
shin
g a
n i
nven
tory
of
stat
e-o
wn
ed a
sset
s, i
ncl
ud
ing s
tak
es i
n l
iste
d a
nd
no
n-
list
ed e
nte
rpri
ses
and
co
mm
erci
ally
via
ble
rea
l es
tate
an
d l
and t
o e
nsu
re i
t is
co
mp
reh
ensi
ve.
Th
e in
ven
tory
wil
l be
pu
bli
shed
in
su
cces
siv
e st
ages
by
en
d-2
011,
mid
-2012 a
nd
en
d-2
012.
On
go
ing
.
Th
e st
rate
gic
pla
n f
or
the
dev
elo
pm
ent
of
real
est
ate
asse
ts
wh
ich
incl
ud
es c
ateg
ori
zati
on o
f re
al e
stat
e as
sets
in
gro
up
s is
exp
ecte
d t
o b
e co
mp
lete
d b
y J
une
20
12
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
54
Th
e G
ov
ern
men
t ac
cele
rate
s st
ate
lan
d o
wn
ersh
ip r
egis
trat
ion
, an
d a
do
pts
sec
on
dar
y l
egis
lati
on
on t
ou
rism
ho
usi
ng
an
d o
n
land u
se [
Q4
-201
1].
Pa
rtia
lly
ob
serv
ed.
Th
e F
irst
Im
ple
men
tati
on B
ill
(Ch
apte
r 2
, A
rts
10
-17
) in
clu
des
the
dev
elo
pm
ent
of
stat
e p
rop
erty
(p
ub
lic
lan
d).
Sti
ll p
end
ing:
Rev
isio
n o
f M
inis
teri
al D
ecis
ion
on S
trat
egic
Spat
ial
Pla
nnin
g
Fra
mew
ork
fo
r T
ou
rism
; an
d r
evis
ion
of
Law
on l
and
-use
pla
nn
ing.
A n
ew G
ener
al S
ecre
tari
at o
f P
ub
lic
Pro
per
ty i
s es
tab
lish
ed a
nd m
ade
oper
atio
nal
wit
h t
he
aim
of
impro
vin
g m
anag
emen
t of
real
est
ate
asse
ts,
clea
rin
g t
hem
of
encu
mb
rance
s an
d p
repar
ing t
hem
fo
r p
rivat
isat
ion
. T
he
real
est
ate
enti
ties
KE
D a
nd
ET
A
are
mer
ged
an
d p
rofe
ssio
nal
ly m
anag
ed i
n c
oo
rdin
atio
n w
ith
th
e H
RD
AF
. T
he
HR
DA
F c
reat
es s
ix r
eal
esta
te p
ort
foli
os.
[Q4
-20
11
].
Pro
ceed
s fr
om
pri
vat
isat
ion o
f fi
nan
cial
an
d n
on
-fin
anci
al a
sset
s d
o n
ot
sub
stit
ute
fis
cal
con
soli
dat
ion
eff
ort
s an
d w
ill
not
be
con
sid
ered
wh
en a
sses
sin
g c
om
pli
ance
of
the
annu
al g
ener
al g
over
nm
ent
def
icit
wit
h t
he
ceil
ing e
stab
lish
ed i
n t
he
Co
un
cil
Dec
isio
n (
see
tech
nic
al m
emora
ndum
of
under
stan
din
g).
When
res
truct
uri
ng s
tate
-ow
ned
ente
rpri
ses
wit
h a
vie
w t
o p
rep
arin
g t
hem
fo
r p
rivat
isat
ion,
spec
ific
att
enti
on w
ill
be
giv
en
to a
tim
ely
cle
aran
ce o
f st
ate
aid i
ssues
.
Ob
serv
ed.
Th
e G
ener
al S
ecre
tari
at o
f P
ub
lic
Pro
per
ty h
as b
een
est
abli
shed
.
KE
D a
nd
ET
A h
ave
bee
n m
erged
(E
TA
D).
The
HR
AD
F h
as
crea
ted t
he
six
rea
l es
tate
po
rtfo
lios.
Fig
hti
ng
wa
ste
in p
ub
lic
ente
rpri
ses
an
d o
ther
pu
bli
c en
titi
es
Th
e le
gal
act
on t
he
tran
sfer
to t
he
Sta
te o
f th
e m
ob
ile
and i
mm
ob
ile
asse
ts o
f en
titi
es t
hat
are
clo
sed i
s ad
opte
d.
[en
d-2
011]
O
bse
rved
.
Th
e as
sets
are
tra
nsf
erre
d t
o t
he
Sta
tes
acco
rdin
g t
o e
ach
act
s
that
clo
ses
pu
bli
c en
titi
es.
Tar
iffs
in
OA
SA
, O
SE
gro
up a
nd o
ther
sta
te-o
wned
ente
rpri
ses
incr
ease
by
at
leas
t 2
5 p
erce
nt,
wh
ile
thei
r b
usi
nes
s p
lan
s ar
e
app
rop
riat
ely
upd
ated
. [Q
1-2
01
3]
No
t ye
t a
ppli
cable
.
Tax p
oli
cy a
nd r
even
ue
adm
inis
trati
on
ref
orm
s
In l
ine
wit
h t
he
anti
-tax
evas
ion
act
ion p
lan, th
e G
ov
ern
men
t w
ill
step
up a
udit
s o
f la
rge-
scal
e ta
x p
ayer
s, h
igh
-wea
lth
ind
ivid
ual
s an
d s
elf-
emp
loy
ed,
it w
ill
acce
lera
te t
he
reso
luti
on o
f ta
x a
rrea
rs,
and b
ette
r in
teg
rate
anti
-lau
nder
ing t
ools
in
to
the
stra
tegy
. P
rog
ress
wil
l be
mon
ito
red b
y q
uan
tita
tiv
e in
dic
ato
rs.
Thes
e q
uan
tita
tiv
e in
dic
ato
rs a
nd
co
mp
lian
ce w
ith
thes
e
targ
ets
wil
l be
monit
ore
d a
nd m
ade
pu
bli
c.
Th
e au
dit
s o
f 1 7
00
hig
h-w
ealt
h a
nd
sel
f-em
plo
yed
in
div
idual
s id
enti
fied
by
th
e an
ti-e
vas
ion t
ask f
orc
e w
ill
be
init
iate
d
imm
edia
tely
.
Ob
serv
ed w
ith
del
ay
.
To
ad
van
ce t
he
refo
rms
of
rev
enue
adm
inis
trat
ion
, th
e G
ov
ern
men
t:
- ac
tiv
ates
a l
arge-
tax
pay
ers
unit
; [e
nd
-Oct
ob
er 2
011]
- re
mo
ves
bar
rier
s to
eff
ecti
ve
tax
ad
min
istr
atio
n b
y i
mp
lem
enti
ng t
he
key
ref
orm
s o
f th
e n
ew t
ax l
aw,
incl
ud
ing r
epla
cin
g
man
ager
s w
ho
do
no
t m
eet
per
form
ance
tar
get
s [e
nd
-2011],
rea
sses
sin
g t
ax a
udit
ors
’ q
ual
ific
atio
ns
[en
d-2
011]
and h
irin
g
new
au
dit
ors
in t
he
cou
rse
of
20
12
- m
akes
op
erat
ion
al t
he
new
ly c
reat
ed f
ast-
trac
k a
dm
inis
trat
ive
dis
pu
te r
eso
luti
on
bo
dy
to
dea
l ra
pid
ly w
ith l
arge
dis
pu
te
case
s (i
.e.
wit
hin
90
day
s).
[No
vem
ber
20
11
]
- ce
ntr
alis
es t
he
fu
nct
ion
s o
f, a
nd m
erg
es, at
lea
st 3
1 t
ax o
ffic
es b
y e
nd
-Oct
ob
er 2
011,
and m
erg
es,
31 t
ran
sfer
s
com
pet
ence
s, e
lim
inat
es m
anag
emen
t posi
tions
and c
lose
s so
me
20
0 l
oca
l ta
x o
ffic
es i
den
tifi
ed a
s in
effi
cien
t, i
n t
he
cours
e of
20
12
-
puts
in p
lace
a n
ew I
T s
yst
em t
hat
in
terc
on
nec
ts a
ll t
ax o
ffic
es.
Pa
rtia
lly
ob
serv
ed.
31
tax
off
ices
clo
sed
or
mer
ged
an
d k
ey f
un
ctio
ns
con
soli
dat
ed
Per
form
ance
-bas
ed c
ontr
acts
fo
r au
dit
ors
hav
e b
een
ap
pro
ved
.
Rea
sses
smen
t o
f ta
x a
udit
ors
’ q
ual
ific
atio
ns
is o
ng
oin
g.
Th
e la
rge
tax
pay
er u
nit
has
bee
n e
stab
lish
ed,
but
not
yet
full
y
staf
fed
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
55
Th
e p
rep
arat
ion o
f th
e n
ew I
T s
yst
em i
nv
olv
es t
he
foll
ow
ing
mai
n s
tep
s in
rel
atio
n t
o t
he
new
dat
a ce
ntr
e, w
eb-f
acin
g a
nd
bac
k-o
ffic
e ap
pli
cati
on
s:
-15
new
ele
ctro
nic
ser
vic
es a
nd e
nh
ance
men
ts a
re r
un
nin
g b
y e
nd
-Dec
emb
er 2
01
1.
Thes
e co
nce
rn m
ain
ly t
he
corp
ora
te
inco
me
tax.
- th
e n
ew d
ata
cen
tre
har
dw
are
is i
n p
lace
an
d r
unn
ing
by
en
d-M
arc
h 2
01
2;
- 2
0 m
ore
new
ele
ctro
nic
ser
vic
es a
nd
en
han
cem
ents
by
en
d-J
un
e 2012.
Th
ese
con
cern
mai
nly
tax
es w
ith
hel
d a
t so
urc
e.
-dat
abas
e an
d a
pp
lica
tio
n d
esig
n a
nd
im
ple
men
tati
on
, b
y e
nd
-Oct
ob
er 2
01
2;
-8 r
emai
nin
g n
ew e
lect
ron
ic s
erv
ices
an
d e
nh
ance
men
ts b
y e
nd
-Dec
emb
er 2
01
2.
Thes
e co
nce
rn f
orm
s fi
led
lat
e w
ith
a f
ine,
real
-est
ate
tax,
and
VA
T a
dm
inis
trat
ion.
-sy
stem
an
d u
ser
test
s, u
ser
trai
nin
g,
and m
igra
tion
of
all
tax o
ffic
es t
o t
he
centr
aliz
ed d
atab
ase:
by
en
d-D
ecem
ber
20
12
;
-op
erat
ion
al u
se o
f th
e n
ew I
T i
nfr
astr
uct
ure
by
all
tax
off
ices
: 1 J
an
ua
ry 2
01
3.
Ob
serv
ed.
or
No
t ye
t a
ppli
cable
.
To
sp
eed u
p t
ax-r
elat
ed j
ud
icia
l ap
pea
ls, th
e gover
nm
ent
has
cre
ated
the
poss
ibil
ity
of
ded
icat
ed c
ourt
cham
ber
s fo
r ta
x c
ases
;
24
ch
amb
ers
are
exp
ecte
d t
o b
e op
erat
ion
al b
y e
nd
-2011.
O
bse
rved
.
Th
e G
over
nm
ent
pre
par
es a
tax
ref
orm
th
at a
ims
at s
impli
fyin
g t
he
tax s
yst
em,
elim
inat
ing e
xem
pti
ons,
incl
udin
g a
nd
bro
aden
ing b
ases
, th
us
allo
win
g r
edu
ctio
ns
in t
ax r
ates
in a
pru
den
t an
d f
isca
lly
-neu
tral
man
ner
. T
his
rel
ates
to
th
e p
erso
nal
inco
me
tax
, co
rpo
rate
in
com
e ta
x a
nd
VA
T, as
wel
l as
so
cial
co
ntr
ibu
tio
ns.
Th
e re
form
wil
l al
so s
imp
lify
th
e C
od
e o
f B
oo
ks
and
Rec
ord
s. [
Ma
rch
20
12
]
No
t ye
t a
ppli
cable
Pu
bli
c fi
na
nci
al
ma
na
gem
ent
refo
rms
A p
lan
for
the
clea
rance
of
arre
ars
is p
ub
lish
ed i
n N
ov
emb
er 2
01
1.
The
Go
ver
nm
ent
ensu
res
that
the
sto
ck o
f ar
rear
s st
ead
ily
dec
lin
es f
rom
the
sixth
dis
bu
rsem
ent
on
wa
rds.
Dat
a o
n a
rrea
rs a
re p
ub
lish
ed m
on
thly
wit
h a
lag
of
no
t m
ore
th
an 2
0 d
ays
afte
r th
e en
d o
f ea
ch m
on
th.
No
t o
bse
rved
.
Th
e del
ays
in t
he
sist
h d
isb
urs
emen
t d
id n
ot
allo
w p
rep
arin
g a
pla
n f
or
the
clea
ran
ce o
f ar
rear
s. H
ow
ever
, av
aila
ble
dat
a
ind
icat
ed t
hat
the
sto
ck o
f ar
rear
s to
su
pp
lier
s d
ecli
ned
in t
he
fou
rth
qu
arte
r o
f 2
01
1.
To
str
ength
en e
xp
end
itu
re c
ontr
ol,
th
e G
ov
ern
men
t:
app
oin
ts p
erm
anen
t fi
nan
cial
acc
ou
nti
ng
off
icer
s in
all
Min
istr
ies
[en
d-N
ov
emb
er 2
01
1];
conti
nues
the
pro
cess
of
esta
bli
shin
g c
om
mit
men
t re
gis
trie
s, w
hic
h s
ho
uld
co
ver
th
e w
ho
le g
ener
al g
ov
ern
men
t; [
Q1
-20
12
]
enfo
rces
th
e o
bli
gat
ion o
f a
cco
un
tin
g o
ffic
ers
to r
epo
rt c
om
mit
men
ts, in
clu
din
g b
y e
nac
tin
g s
anct
ion
s to
enti
ties
not
sub
mit
tin
g t
he
dat
a an
d d
isci
pli
nar
y a
ctio
n f
or
acco
un
tin
g o
ffic
ers;
[Q
1-2
01
2]
tab
les
legis
lati
on s
trea
mli
nin
g t
he
pro
ced
ure
fo
r su
bm
issi
on
an
d a
pp
rov
al o
f su
pp
lem
enta
ry b
ud
get
s. [
Feb
ruary
2012]
Ob
serv
ed.
or
No
t ye
t a
ppli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
56
To
mo
der
nis
e pu
bli
c a
dm
inis
tra
tio
n
Fu
nct
ion
al
revi
ews
Th
e G
ov
ern
men
t as
sess
es t
he
resu
lts
of
the
firs
t ph
ase
of
the
indep
end
ent
fun
ctio
nal
rev
iew
of
cen
tral
ad
min
istr
atio
n.
This
asse
ssm
ent
wil
l re
sult
in
an
act
ion
pla
n f
or
the
imp
lem
enta
tio
n o
f o
per
atio
nal
po
licy
rec
om
men
dat
ion
s. T
hes
e
reco
mm
end
atio
ns
sho
uld
det
erm
ine
ho
w t
o a
chie
ve
a m
ore
str
eam
lin
ed a
nd
eff
ecti
ve
pu
bli
c se
rvic
e, t
o d
efin
e cl
ear
resp
on
sib
ilit
ies
and
co
mm
and
lin
es o
f m
inis
teri
al d
epar
tmen
ts,
elim
inat
ing
over
lapp
ing
co
mp
eten
ces,
an
d t
o i
mp
rov
e in
ter-
and
intr
a- m
ob
ilit
y.
[Oct
ob
er 2
01
1]
A s
eco
nd
phas
e o
f th
e re
vie
w w
ill
lead
to
an
act
ion
pla
n a
nd t
o t
he
dra
ftin
g o
f fr
amew
ork
leg
isla
tion
by
en
d-2
011.
On
go
ing
.
Th
e O
EC
D R
epo
rt o
n c
entr
al a
dm
inis
trat
ion r
eform
s w
as
pu
bli
shed
in
Dec
emb
er 2
01
1.
The
reco
mm
end
atio
ns
of
this
rep
ort
are
bei
ng
co
nsi
der
ed b
y t
he
auth
ori
ties
.
A r
oad
map
has
bee
n i
den
tifi
ed t
o i
mp
lem
ent
thes
e re
form
s
thro
ug
ho
ut
20
12.
A d
raft
law
is
bei
ng
pre
par
ed.
Th
e o
ng
oin
g f
unct
ional
rev
iew
of
exis
tin
g s
oci
al p
rog
ram
mes
is
final
ised
[Q
4-2
01
1].
A s
eco
nd
phas
e w
ill
incl
ude
a m
ore
det
aile
d r
evie
w o
f sp
ecif
ic s
oci
al p
rog
ram
mes
, ai
min
g a
t re
du
cin
g e
xce
ssiv
e
frag
men
tati
on
, gen
erat
ing
sav
ings
and
cre
atin
g e
ffic
ien
cies
. [Q
1-2
01
2]
On
go
ing
.
A j
oin
t O
EC
D-I
MF
Tec
hn
ical
Ass
ista
nce
tea
m h
as c
oll
ecte
d
dat
a on s
oci
al p
rogra
mm
es f
rom
all
lin
e m
inis
trie
s. A
fin
al
rep
ort
is
expec
ted
sh
ort
ly.
Th
e se
con
d p
has
e w
ill
be
mer
ged
wit
h t
he
fun
ctio
nal
rev
iew
and
the
fin
al r
epo
rt w
ill
be
read
y s
ho
rlty
.
Pu
bli
c se
cto
r w
ag
es a
nd
hu
ma
n r
eso
urc
e m
an
ag
emen
t
Th
e G
ov
ern
men
t p
ub
lish
es a
med
ium
-ter
m s
taff
ing
pla
n [
end
-Dec
emb
er 2
01
1]
for
the
per
iod
up t
o 2
01
5,
in l
ine
wit
h t
he
rule
of
1 r
ecru
itm
ent
for
5 e
xit
s. T
he
recr
uit
men
t/ex
it r
ule
ap
pli
es t
o g
ener
al g
ov
ern
men
t as
a w
ho
le w
ith
out
sect
ora
l
exce
pti
on
s.
No
t o
bse
rved
.
Med
ium
-ter
m s
taff
ing
pla
ns
iden
tify
ing t
he
recr
uit
men
t nee
ds
of
each
min
istr
y h
ave
no
t y
et b
een
pu
bli
shed
.
Bef
ore
en
d-2
011,
abo
ut
15 0
00
sta
ff c
urr
entl
y e
mp
loy
ed b
y v
ario
us
go
ver
nm
ent
enti
ties
are
tra
nsf
erre
d t
o t
he
labo
ur
rese
rve,
wh
ile
abo
ut
15
00
0 w
ill
be
pla
ced
in
pre
-ret
irem
ent.
Sta
ff i
n t
he
lab
ou
r re
serv
e, a
nd
in
pre
-ret
irem
ent,
wil
l be
pai
d a
t 6
0
per
cent
of
thei
r b
asic
wag
e (e
xcl
ud
ing
ov
erti
me
and o
ther
extr
a pay
men
ts)
for
not
more
th
an 1
2 m
on
ths,
aft
er w
hic
h t
hey
wil
l
be
dis
mis
sed
. T
his
per
iod o
f 1
2 m
on
ths
may
be
exte
nd
ed u
p t
o 2
4 m
on
ths
for
staf
f cl
ose
to r
etir
emen
t. P
aym
ents
to s
taff
wh
ile
in t
he
lab
ou
r re
serv
e ar
e co
nsi
der
ed p
art
of
thei
r se
ver
ance
pay
men
ts.
No
t o
bse
rved
.
Appro
xim
atel
y, 10 0
00 e
mplo
yee
s le
ft t
he
publi
c se
ctor
under
the
pre
-ret
irem
ent
sch
eme.
As
a re
sult
of
mer
ges
an
d c
lose
rs,
63
0 e
mp
loy
ees
wer
e sh
ifte
d i
n t
he
lab
ou
r re
serv
e.
Ad
dit
ion
al r
edu
nd
ant
staf
f w
ill
be
tran
sfer
red
to
the
lab
ou
r re
serv
e in
the
cou
rse
of
20
12,
in c
on
nec
tio
n w
ith t
he
iden
tifi
cati
on
of
enti
ties
or
unit
s th
at a
re c
lose
d o
r d
ow
nsi
zed
, an
d i
n c
ase
the
recr
uit
men
t ru
le i
s v
iola
ted
. S
taff
tra
nsf
erre
d t
o t
he
Go
ver
nm
ent
from
eit
her
sta
te-o
wn
ed e
nte
rpri
ses
or
oth
er e
nti
ties
un
der
res
truct
uri
ng
are
co
nsi
der
ed a
s n
ew r
ecru
itm
ents
. T
he
sam
e ap
pli
es t
o s
taff
in
th
e la
bo
ur
rese
rve
that
is
tran
sfer
red t
o o
ther
go
ver
nm
ent
enti
ties
, af
ter
scre
enin
g o
f p
rofe
ssio
nal
qu
alif
icat
ion
s by
AS
EP
un
der
its
reg
ula
r ev
alu
atio
n c
rite
ria.
The
ov
eral
l in
take
in t
he
pro
fess
ional
sch
ools
(e.
g.
mil
itar
y a
nd
po
lice
aca
dem
ies)
is
adju
sted
in
lin
e w
ith
the
staf
fin
g p
lan
s.
No
t ye
t a
ppli
cable
.
Th
e st
affi
ng p
lan
s p
er M
inis
try
an
d e
ach
gro
up o
f p
ub
lic
enti
ties
wil
l in
clu
de
tig
hte
r ru
les
for
tem
po
rary
sta
ff,
cance
llat
ion
of
vac
ant
job p
ost
an
d r
eall
oca
tio
n o
f q
ual
ifie
d s
taff
to
pri
ori
ty a
reas
an
d t
akes
in
to a
cco
un
t th
e ex
ten
sio
n o
f w
ork
ing h
ou
rs i
n
the
pu
bli
c se
cto
r. T
he
staf
fin
g p
lan
s an
d m
on
thly
dat
a o
n s
taff
mo
vem
ents
(en
trie
s, e
xit
s, t
ran
sfer
s am
on
g e
nti
ties
) o
f th
e
sev
eral
go
ver
nm
ent
dep
artm
ents
are
pu
bli
shed
on t
he
web
. [m
on
thly
sta
rtin
g e
nd
-No
vem
ber
20
11
]
No
t o
bse
rved
.
Med
ium
-ter
m s
taff
ing
pla
ns
iden
tify
ing t
he
recr
uit
men
t nee
ds
of
each
min
istr
y h
as n
ot
yet
bee
n p
rep
ared
.
Th
e G
ov
ern
men
t co
mm
issi
on
s an
ex
per
t as
sess
men
t of
the
new
wag
e gri
d.
[en
d-2
011]
Th
is a
sses
smen
t w
ill
focu
s o
n t
he
wag
e d
rift
that
is
emb
edd
ed i
n t
he
new
pro
mo
tio
n m
ech
anis
m.
If t
he
asse
ssm
ent
rev
eals
any
exce
ssiv
e w
age
dri
ft,
the
pro
mo
tio
n r
ule
s ar
e ad
just
ed b
efo
re e
nd
-2012.
No
pro
mo
tio
n t
akes
pla
ce b
efo
re t
he
asse
ssm
ent
and
adju
stm
ent
to t
he
pro
mo
tio
n r
ule
s.
No
t o
bse
rved
or
not
yet
appli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
57
Pu
bli
c p
rocu
rem
ent
Th
e G
ov
ern
men
t la
unch
es t
he
dev
elo
pm
ent
of
an e
-pro
cure
men
t IT
pla
tfo
rm a
nd s
ets
inte
rmed
iate
mil
esto
nes
in l
ine
wit
h t
he
acti
on
pla
n.
Thes
e m
iles
ton
es i
ncl
ud
e te
stin
g a
pil
ot
ver
sio
n,
avai
lab
ilit
y o
f al
l fu
nct
ional
itie
s fo
r al
l co
ntr
acts
an
d p
has
ing
-in
of
the
man
dat
ory
use
of
e-p
rocu
rem
ent
syst
em f
or
suppli
es,
serv
ices
and w
ork
s. [
Oct
ob
er 2
01
1]
Ob
serv
ed.
Th
e co
ntr
act
to d
evel
op a
n e
-pro
cure
men
t p
latf
orm
was
sig
ned
on
14
Oct
ober
20
11
. T
he
firs
t m
od
ule
on e
-au
ctio
ns
is e
xp
ecte
d
to b
e o
per
atio
nal
in
Mar
ch 2
01
2. T
he
e-p
rocu
rem
ent
pla
tfo
rm i
s
for
sup
pli
es o
nly
. It
wil
l at
a l
ater
sta
ge
acco
mm
od
ate
serv
ices
and
even
tual
ly, p
ub
lic
wo
rks.
A t
ho
rou
gh
rev
iew
of
the
syst
em o
f re
dre
ss a
gai
nst
aw
ard p
roce
du
res
and t
he
role
to
co
nfe
r to
th
e S
PP
A i
s ca
rrie
d o
ut,
in
agre
emen
t w
ith t
he
Eu
ropea
n C
om
mis
sio
n. [Q
4-2
01
1]
On
goin
g.
Th
e C
om
mis
sio
n h
as r
ecei
ved
so
me
dat
a o
n a
ppea
ls l
od
ged
thro
ug
ho
ut
the
var
iou
s st
ages
of
the
life
of
pro
cure
men
t
con
trac
ts b
ased
on
a q
ues
tio
nnai
re s
ub
mit
ted t
o 5
00
pu
bli
c
bo
die
s. D
ata
refe
r to
20
10 a
nd t
o t
he
firs
t hal
f of
20
11
to
pro
cure
men
t o
f g
oo
ds
and
ser
vic
es.
Lo
okin
g f
orw
ard
, dat
a
sho
uld
als
o i
nd
icat
e am
on
g o
ther
s, h
ow
man
y a
ppea
ls r
each
the
jud
icia
l sy
stem
an
d c
ov
er o
ther
ty
pes
of
pro
cure
men
t co
ntr
acts
,
such
as
wo
rks.
Th
e M
inis
try
of
Dev
elo
pm
ent,
Co
mp
etit
iven
ess
and
Sh
ipp
ing
is
wo
rkin
g o
n d
raft
leg
isla
tio
n t
o r
edu
ce t
he
nu
mb
er o
f st
eps
wit
hin
the
life
of
a p
rocu
rem
ent
con
trac
t w
her
e dec
isio
ns
of
the
con
trac
tin
g a
uth
ori
ties
th
at c
an b
e ap
pea
led
.
Th
e G
ov
ern
men
t u
nd
erta
kes
a r
evie
w i
den
tify
ing
are
as t
o i
ncr
ease
th
e ef
fici
ency
of
the
pu
bli
c p
rocu
rem
ent
syst
em o
uts
ide
the
SP
PA
, as
spec
ifie
d i
n t
he
Act
ion P
lan
. T
he
revie
w i
ncl
udes
co
ncl
usi
ons
and a
ctio
ns
in a
gre
emen
t w
ith t
he
Euro
pea
n
Co
mm
issi
on
. [Q
4-2
011]
On
goin
g.
Gre
ece
has
alr
eady
su
bm
itte
d a
pre
lim
inar
y s
tudy
whic
h m
aps
nu
mer
ou
s o
ther
pu
bli
c b
od
ies
wit
h p
ub
lic
pro
cure
men
t
com
pet
ence
s an
d p
oin
ts t
o p
oss
ible
fri
ctio
ns
wit
h t
he
man
dat
e
of
the
Sin
gle
Publi
c P
rocu
rem
ent
Auth
ori
ty (
SP
PA
). T
he
Tas
kfo
rce
Gre
ece
(TF
GR
) is
rea
dy
to
pro
vid
e te
chn
ical
assi
stan
ce o
n p
ub
lic
pro
cure
men
t co
mm
itm
ents
an
d i
n t
his
resp
ect,
a s
tudy
sy
nth
esis
ing m
ain
pro
vis
ion
s o
f nat
ional
pu
bli
c
pro
cure
men
t le
gis
lati
on i
s b
ein
g p
rep
ared
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
58
Th
e G
ov
ern
men
t is
sues
dec
isio
ns,
in c
on
sult
atio
n w
ith
the
Co
mm
issi
on
ser
vic
es
- to
pro
vid
e fo
r th
e in
stit
uti
on
and
est
abli
shm
ent
of
posi
tions
for
the
SP
PA
’s p
erso
nnel
, as
wel
l as
for
the
org
anis
atio
n o
f hu
man
res
ou
rces
an
d s
erv
ices
of
the
Au
tho
rity
in a
cco
rdan
ce w
ith t
he
pro
vis
ion
s o
f th
e la
w o
n t
he
SP
PA
; [O
ctob
er 2
011]
- to
ap
po
int
the
mem
ber
s o
f th
e S
PP
A;
[O
ctob
er 2
011]
- to
pro
vid
e fo
r th
e oper
atio
nal
reg
ula
tion o
f th
e S
PP
A.
[Q4
-20
11
]
Th
e S
PP
A s
tart
s it
s o
per
atio
ns
wit
h t
he
nec
essa
ry r
eso
urc
es t
o f
ulf
il i
ts m
and
ate,
obje
ctiv
es,
com
pet
ence
s an
d p
ow
ers
as
def
ined
in t
he
law
on t
he
SP
PA
and t
he
Act
ion P
lan a
gre
ed w
ith t
he
Eu
ropea
n C
om
mis
sio
n i
n N
ov
emb
er 2
01
0.
Th
is i
ncl
ud
es
the
adopti
on o
f th
e oper
atio
nal
reg
ula
tion o
f th
e S
PP
A.
[Ja
nu
ary
20
12
]
No
t o
bse
rved
.
Th
e e-
pro
cure
men
t pla
tfo
rm i
s fu
lly
oper
atio
nal
, an
d a
co
mm
on
web
site
is
crea
ted
fo
r th
e p
ubli
cati
on
of
all
pro
cure
men
t
pro
ced
ure
s an
d o
utc
om
es.
[Oct
ob
er 2
01
2]
No
t ye
t a
ppli
cable
.
To
com
ple
te t
he
pen
sio
n r
efo
rm
Th
e N
atio
nal
Act
uar
ial
Au
tho
rity
(N
AA
) co
nti
nues
th
e su
bm
issi
on
of
lon
g-t
erm
pro
ject
ion
s o
f p
ensi
on
ex
pen
dit
ure
up
to
20
60
un
der
th
e ad
op
ted
ref
orm
. T
he
pro
ject
ion
s en
com
pas
s th
e m
ain
su
pp
lem
enta
ry (
aux
ilia
ry)
sch
emes
(E
TE
AM
, T
EA
DY
,
MT
PY
), b
ased
on
co
mp
reh
ensi
ve
dat
a co
llec
ted a
nd e
labora
ted b
y t
he
NA
A.
The
pro
ject
ion
wil
l b
e p
eer-
revie
wed
an
d
val
idat
ed b
y t
he
EU
Eco
no
mic
Po
licy
Co
mm
itte
e an
d t
he
Eu
ropea
n C
om
mis
sio
n,
EC
B, an
d I
MF
sta
ff.
Fo
r th
e re
mai
nin
g
sup
ple
men
tary
sch
emes
, th
e sa
me
pro
ced
ure
is
foll
ow
ed. [e
nd
-No
vem
ber
20
11
]
Ob
serv
ed.
Lo
ng
-ter
m p
roje
ctio
ns
of
pen
sion
ex
pen
dit
ure
wer
e su
bm
itte
d
and
pre
sente
d a
t th
e A
WG
, p
eer-
rev
iew
ed a
nd e
ndo
rsed
by
the
AW
G o
f th
e E
con
om
ic P
oli
cy C
om
mit
tee.
Th
e li
st o
f h
eavy
an
d a
rdu
ou
s p
rofe
ssio
ns
is r
evis
ed a
nd
its
co
ver
age
is r
edu
ced
to
les
s th
an 1
0 p
erce
nt
of
emplo
ym
ent.
The
new
lis
t o
f dif
ficu
lt a
nd
haz
ard
ous
occ
up
atio
ns
(Law
38
63
/20
10
) is
pu
bli
shed
by
en
d-O
ctob
er 2
011 a
nd
ap
pli
es
imm
edia
tely
to a
ll w
ork
ers.
No p
rofe
ssio
n w
ill
be
added
to
the
list
aft
er i
ts r
evis
ion
.
Ob
serv
ed.
Th
e li
st h
as b
een r
evis
ed w
ith c
ateg
ori
es b
ein
g r
emo
ved
an
d
som
e n
ew o
nes
ad
ded
in.
It n
ow
co
ver
s le
ss t
han
10
per
cen
t o
f
curr
ent
emp
loy
men
t.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
59
In a
dd
itio
n t
o a
n i
nit
ial
cut
(see
above)
, th
e G
over
nm
ent
pro
ceed
s w
ith
an i
n-d
epth
rev
isio
n o
f th
e fu
nct
ion
ing o
f
seco
nd
ary
/su
pp
lem
enta
ry p
ubli
c p
ensi
on
fu
nd
s, i
ncl
ud
ing w
elfa
re f
un
ds
and l
um
p-s
um
sch
emes
. T
he
aim
of
the
revis
ion
is
to
stab
ilis
e p
ensi
on e
xp
endit
ure
, g
uar
ante
e th
e b
ud
get
ary
neu
tral
ity
of
thes
e sc
hem
es,
and e
nsu
re m
ediu
m-
and
lo
ng-t
erm
sust
ainab
ilit
y o
f th
e sy
stem
. T
he
revis
ion a
chie
ves
:
- a
furt
her
red
uct
ion
in t
he
nu
mb
er o
f ex
isti
ng f
und
s;
- th
e el
imin
atio
n o
f im
bal
ance
s in
th
ose
fu
nd
s w
ith
def
icit
s;
- th
e st
abil
isat
ion
of
the
curr
ent
spen
din
g a
t su
stai
nab
le l
evel
, th
rou
gh
ap
pro
pri
ate
adju
stm
ents
to b
e m
ade
fro
m 1
Jan
uar
y
20
12
;
- th
e lo
ng
-ter
m s
ust
ain
abil
ity
of
seco
nd
ary
sch
emes
thro
ug
h a
str
ict
lin
k b
etw
een
co
ntr
ibu
tio
ns
and
ben
efit
s. [
Q4-2
01
1]
Th
e re
form
of
the
seco
ndar
y/s
upp
lem
enta
ry s
chem
es i
s d
esig
ned
in
co
nsu
ltat
ion
wit
h E
uro
pea
n C
om
mis
sio
n,
EC
B a
nd
IM
F
staf
f, a
nd
its
est
imat
ed i
mp
act
on l
on
g-t
erm
su
stai
nab
ilit
y i
s v
alid
ated
by
the
EU
Eco
no
mic
Po
licy
Co
mm
itte
e. T
he
par
amet
ers
of
the
new
sec
on
dar
y n
oti
onal
def
ined
-co
ntr
ibuti
on
syst
em e
nsu
re l
on
g-t
erm
act
uar
ial
bal
ance
, as
ass
esse
d b
y t
he
NA
A.
[leg
isla
tion
: Q
4-2
01
1;
imple
men
tati
on
: Q
1-2
01
2]
Ob
serv
ed w
ith
del
ay
.
The
NA
A p
roje
ctio
ns
show
that
ther
e ar
e su
bst
anti
al d
efic
its
in
sup
ple
men
tary
pen
sio
n f
un
ds
(clo
se t
o 0
.4%
of
GD
P)
wh
ich
wil
l in
crea
se o
ver
tim
e if
no r
efo
rm t
oo
k p
lace
.
A f
ram
ework
law
to r
eform
su
pp
lem
enta
ry p
ensi
on
sch
emes
was
ad
op
ted i
n F
ebru
ary
20
12
Th
e G
ov
ern
men
t id
enti
fies
the
sch
emes
fo
r w
hic
h l
um
p s
um
s p
aid o
n r
etir
emen
t ar
e o
ut
of
lin
e w
ith
co
ntr
ibu
tio
ns
pai
d,
[No
vem
ber
20
11
] an
d a
dju
sts
the
pay
men
ts.
[Q1-2
01
2]
No
t o
bse
rved
.
Ho
wev
er, th
ere
has
alr
eady
bee
n a
dju
stm
ent
to l
um
p s
um
s p
aid
on
ret
irem
ent.
Th
e re
form
co
ntr
ibu
tes
to a
chie
vin
g t
he
over
arch
ing
tar
get
of
red
uci
ng
th
e o
ver
all
(bas
ic,
contr
ibu
tory
, su
pp
lem
enta
ry a
nd
any
oth
er r
elat
ed s
chem
e, i
ncl
ud
ing
lu
mp
sum
s at
ret
irem
ent)
in
crea
se o
f p
ub
lic
sect
or
pen
sio
n s
pen
din
g,
over
th
e per
iod
20
09
-60
, to
un
der
2.5
per
cen
tag
e p
oin
ts o
f G
DP
. If
the
pro
ject
ions
by
the
NA
A s
how
th
at, ev
en a
fter
th
e re
form
s o
f th
e
sup
ple
men
tary
sch
emes
, th
e pro
ject
ed i
ncr
ease
in t
he
tota
l p
ub
lic
pen
sio
n e
xpen
dit
ure
exce
eds
the
lim
it o
f 2.5
per
cen
tag
e
po
ints
of
GD
P o
ver
20
09
-60,
The
Go
ver
nm
ent
rev
ises
als
o t
he
mai
n p
aram
eter
s o
f th
e pen
sio
n s
yst
em p
rov
ided
by
Law
38
63
/20
10
. [Q
4-2
01
1]
No
t ye
t a
ppli
cable
.
Th
e H
ealt
h C
om
mit
tees
set
up b
y L
aw 3
86
3/2
01
0 w
ill
star
t o
per
atin
g t
he
pla
nn
ed r
evis
ion
of
dis
abil
ity
sta
tus
and
pro
du
ce a
firs
t q
uar
terl
y r
epo
rt o
f it
s ac
tiv
itie
s by
en
d-D
ecem
ber
20
11.
Pa
rtia
lly
ob
serv
ed.
Th
e C
om
mit
tee
has
sta
rted
oper
atin
g w
ith s
ub
stan
tial
del
ay
com
par
ed t
o i
nit
ial
tim
etab
le a
nd h
as j
ust
sta
rted
rev
isin
g t
he
dis
abil
ity
cat
egori
es. T
he
rep
ort
has
no
t bee
n s
ub
mit
ted
.
Th
e o
bje
ctiv
e is
to
red
uce
th
e d
isab
ilit
y p
ensi
on
s to
no
t m
ore
than
10
per
cent
of
the
ov
eral
l n
um
ber
of
pen
sio
ns.
Fo
r th
is
pu
rpo
se,
the
def
init
ion
of
dis
abil
ity
an
d r
esp
ecti
ve
rule
s w
ill
be
revis
ed, an
d t
he
centr
al e
val
uat
ion
off
ice
is o
per
atio
nal
sin
ce
Sep
tem
ber
2011
.
Pa
rtly
ob
serv
ed.
Cen
tral
eval
uat
ion
off
ice
is i
n o
per
atio
n b
ut
no
rep
ort
has
bee
n
pro
du
ced
.
Th
e G
ov
ern
men
t im
ple
men
ts t
he
refo
rm o
f th
e se
con
dar
y/s
up
ple
men
tary
pen
sio
n s
chem
es,
by
mer
gin
g f
un
ds
and s
tart
ing
th
e
calc
ula
tio
n o
f ben
efit
s o
n t
he
bas
is o
f th
e n
ew n
oti
on
al d
efin
ed-c
ontr
ibu
tio
n s
yst
em.
The
Gover
nm
ent
free
zes
no
min
al
sup
ple
men
tary
pen
sio
ns
and
red
uce
s th
e re
pla
cem
ent
rate
s fo
r ac
cru
ed r
ights
in f
und
s w
ith
def
icit
s, b
ased
on
th
e ac
tuar
ial
study
pre
par
ed b
y t
he
NA
A.
In c
ase
the
actu
aria
l st
udy
is
not
read
y,
repla
cem
ent
rate
s ar
e re
duce
d,
star
ting f
rom
1 J
anuar
y
20
12
, to
av
oid
def
icit
s. A
ll f
un
ds
set
up a
co
mp
ute
rise
d s
yst
em o
f in
div
idual
pen
sion a
ccounts
. [Q
1-2
012]
Th
e B
ank
of
Gre
ece
com
mit
s n
ot
to g
rant
pen
sio
n p
riv
ileg
es t
o i
ts s
taff
an
d t
o r
evis
e th
e m
ain p
aram
eter
s of
its
pen
sion
sch
eme,
so
th
at t
hey
rem
ain a
lig
ned
to t
ho
se o
f IK
A.
No
t ye
t a
ppli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
60
To
mo
der
nis
e th
e h
ealt
h c
are
sys
tem
Th
e G
ov
ern
men
t co
nti
nu
es t
o i
mp
lem
ent
the
com
pre
hen
siv
e re
form
of
the
hea
lth c
are
syst
em s
tart
ed i
n 2
01
0 w
ith t
he
ob
ject
ive
of
kee
pin
g p
ub
lic
hea
lth
ex
pen
dit
ure
at
or
bel
ow
6 p
erce
nt
of
GD
P,
wh
ile
mai
nta
inin
g u
niv
ersa
l ac
cess
and
imp
rov
ing
th
e qu
alit
y o
f ca
re d
eliv
ery
. P
oli
cy m
easu
res
incl
ud
e th
e in
teg
rati
on o
f p
rim
ary
hea
lthca
re,
stre
ng
then
ing c
entr
al
pro
cure
men
t an
d e
-hea
lth c
apac
ity
.
On
go
ing
wit
h d
elay
.
Th
e re
form
is
con
tin
uin
g a
nd
th
ere
has
bee
n s
om
e p
rog
ress
.
Ho
wev
er, th
ere
hav
e bee
n d
elay
s an
d i
n s
om
e ar
eas,
lik
e
ph
arm
aceu
tica
ls,
ther
e has
bee
n a
lac
k o
f p
oli
cy i
mp
lem
enta
tio
n
i.e.
ag
reed
mea
sure
s h
ave
no
t b
een
im
ple
men
ted.
Th
e G
ov
ern
men
t co
nti
nu
es t
o u
nd
erta
ke
mea
sure
s y
ield
ing
sav
ings
on
ph
arm
aceu
tica
ls o
f at
lea
st E
UR
2 b
illi
on r
elat
ive
to
the
20
10 l
evel
, of
wh
ich
at
leas
t E
UR
1 b
illi
on i
n 2
01
1. T
his
wil
l b
rin
g a
ver
age
pub
lic
spen
din
g o
n o
utp
atie
nt
ph
arm
aceu
tica
ls t
o a
bo
ut
1 p
erce
nt
of
GD
P (
in l
ine
wit
h t
he
EU
aver
age)
by
en
d 2
01
2.
Pa
rtia
lly
ob
serv
ed.
Th
ere
has
bee
n a
red
uct
ion i
n o
utp
atie
nt
phar
mac
euti
cal
exp
end
itu
re o
f al
mo
st E
UR
1 b
illi
on
sin
ce 2
00
9 b
ut
the
red
uct
ion
in 2
011
co
mp
ared
to 2
01
0 w
as n
egli
gib
le.
Th
is h
as
bee
n d
ue
to t
he
lack
of
imp
lem
enta
tio
n o
f st
ruct
ura
l an
d g
oo
d
pra
ctic
e re
form
s re
gar
din
g p
har
mac
euti
cals
wh
ich a
re c
om
mo
n
in o
ther
EU
co
un
trie
s. T
he
red
uct
ion
in s
pen
din
g w
as m
ain
ly
du
e to
a o
ne-
off
acr
oss
-th
e-b
oar
d c
ut
in p
rice
s an
d e
ntr
y f
ees
for
the
po
siti
ve
list
.
Ad
dit
ion
al m
easu
res
wer
e le
gis
late
d i
n F
ebru
ary
an
d M
arch
20
12
.
Th
e p
rovis
ion
s of
Art
icle
31
an
d 3
2 o
f L
aw 3
86
3/2
01
0 a
re i
mp
lem
ente
d.
In p
arti
cula
r, t
he
Hea
lth
Ben
efit
Co
ord
inat
ion
Co
un
cil
(SY
SP
Y):
- co
nti
nu
es t
he
wo
rk o
n e
stab
lish
ing
new
cri
teri
a an
d t
erm
s fo
r th
e co
ncl
usi
on
s o
f co
ntr
acts
by
soci
al s
ecuri
ty f
unds
wit
h a
ll
hea
lth
care
pro
vid
ers,
an
d a
ll o
ther
act
ion
s en
vis
aged
in A
rtic
le 3
2 w
ith
th
e ai
m o
f ac
hie
vin
g t
he
targ
eted
red
uct
ion i
n
spen
din
g;
- in
itia
tes
join
t pu
rch
ase
of
med
ical
ser
vic
es a
nd
go
od
s to
ach
iev
e su
bst
anti
al e
xp
end
itu
re r
educt
ion
of
at l
east
25
per
cent
com
par
ed t
o 2
010
th
rou
gh
pri
ce-v
olu
me
agre
emen
ts. [Q
4-2
01
1]
On
go
ing
.
New
ty
pes
of
con
trac
ts h
ave
bee
n e
stab
lish
ed a
nd
so
me
pri
ce-
vo
lum
e ag
reem
ents
hav
e b
een
mad
e. T
he
wo
rk n
eed
s to
sp
eed
up
an
d i
nte
nsi
fy.
Th
e G
ov
ern
men
t eq
ual
ises
th
e co
mm
on
ben
efit
pac
kag
e fo
r th
e in
sure
rs o
f E
OP
YY
, w
ith t
he
aim
of
full
eq
ual
isat
ion o
f
ben
efit
s an
d c
ontr
ibu
tio
ns
acro
ss f
un
ds
by
Dec
emb
er 2
011.
Ob
serv
ed.
Contr
ibuti
ons
pai
d b
y O
GA
mem
ber
s ar
e pro
gre
ssiv
ely
equal
ised
to t
hose
of
oth
er m
ember
s of
EO
PY
Y,
as e
nvis
aged
in t
he
med
ium
-ter
m f
isca
l st
rate
gy
. T
he
pro
cess
of
equal
isat
ion o
f co
ntr
ibu
tio
ns
is l
egis
late
d b
y e
nd
-2011,
imp
lem
ente
d i
n J
an
uary
20
12
an
d w
ill
be
com
ple
ted
in
30 m
on
ths.
O
ngoin
g.
EO
PY
Y s
tart
s o
per
atin
g b
y e
nd
-Oct
ob
er 2
011
. T
he
new
fu
nd
wil
l le
ad t
o a
su
bst
anti
al r
edu
ctio
n o
f ad
min
istr
ativ
e st
aff
of
at
leas
t 5
0 p
erce
nt
and
of
con
trac
ted
do
cto
rs o
f at
lea
st 2
5 p
erce
nt
as c
om
par
ed t
o t
he
fou
r o
rigin
atin
g f
un
ds
com
bin
ed.
Th
e ai
m
is t
o a
chie
ve
a ra
tio
of
pat
ients
per
do
cto
r in
lin
e w
ith
the
Euro
pea
n a
ver
age.
On
go
ing
wit
h d
elay
.
EO
PY
Y h
as n
om
inal
ly s
tart
ed t
o o
per
ate
on
ly i
n J
anu
ary
20
12
,
wit
h s
ign
ific
ant
del
ay, an
d o
nly
a m
ino
r par
t of
the
adm
inis
trat
ive
staf
f al
loca
ted
to
EO
PY
Y h
as p
hy
sica
lly
mo
ved
to i
ts o
ffic
es a
nd s
tart
ed w
ork
ing f
ull
tim
e in
EO
PY
Y.
Th
ere
has
bee
n a
dec
reas
e in
the
nu
mber
of
contr
acts
wit
h d
oct
ors
,
tho
ug
h t
he
nu
mb
er o
f d
oct
ors
un
der
co
ntr
act
rem
ain
s v
ery
hig
h
by
EU
sta
ndar
ds.
Th
e G
ov
ern
men
t re
vo
kes
mar
ket
reg
ula
tio
n 4
0 (
17
.12
.19
90
) to
abo
lish
the
0.4
per
cen
t co
ntr
ibu
tio
n o
f w
ho
lesa
le s
ales
pri
ces
in f
avo
ur
of
the
Pan
hel
len
ic P
har
mac
euti
cal
Ass
oci
atio
n. [Q
4-2
011
] O
bse
rved
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
61
An
act
ion
pla
n i
s ad
op
ted
by
ear
ly N
ovem
ber
20
11
, b
ased
on
the
final
rep
ort
of
the
task
forc
e (s
ee b
elow
), i
ncl
udin
g a
tim
etab
le f
or
con
cret
e ac
tio
ns.
[Q
4-2
01
1]
On
go
ing
wit
h d
elay
.
Ther
e w
as a
del
ay i
n t
he
subm
issi
on o
f th
e fi
nal
rep
ort
of
the
Tas
k F
orc
e (s
ubm
itte
d i
n J
anuar
y 2
01
2).
As
a co
nse
qu
ence
,
ther
e h
as b
een n
o g
ov
ern
men
t ac
tio
n p
lan
so f
ar.
Pri
cin
g o
f m
edic
ines
an
d m
edic
al
serv
ices
Th
e G
ov
ern
men
t u
pd
ates
the
com
ple
te p
rice
lis
t fo
r th
e m
edic
ines
in t
he
mar
ket
, usi
ng a
new
pri
cing m
echan
ism
bas
ed o
n t
he
thre
e E
U c
ountr
ies
wit
h t
he
low
est
pri
ces.
Th
e li
st w
ill
be
up
dat
ed o
n a
qu
arte
rly
bas
is.
[Novem
ber
2011]
Ob
serv
ed w
ith
del
ay
.
Fee
s fo
r m
edic
al s
erv
ices
ou
tso
urc
ed t
o p
riv
ate
pro
vid
ers
are
revie
wed
wit
h t
he
aim
of
reduci
ng
rel
ated
co
sts
by
at
leas
t 1
5
per
cent
in 2
01
1, an
d b
y a
n a
dd
itio
nal
15 p
erce
nt
in 2
01
2. [Q
4-2
011
]
On
go
ing
wit
h d
elay
.
Lim
ited
red
uct
ion
in
th
e p
rice
of
serv
ices
co
ntr
acte
d t
o p
rivat
e
pro
vid
ers
has
bee
n r
eali
sed
so
far
in
so
me
area
s bu
t n
eed
to
be
exte
nded
to o
ther
are
as.
Ad
dit
ion
al m
easu
res
wer
e le
gis
late
d i
n F
ebru
ary
an
d M
arch
20
12
.
Sta
rtin
g f
rom
20
12
, th
e p
har
mac
ies'
pro
fit
mar
gin
s ar
e ca
lcu
late
d a
s a
flat
am
ou
nt
or
flat
fee
com
bin
ed w
ith a
sm
all
pro
fit
mar
gin
wit
h t
he
aim
of
red
uci
ng t
he
over
all
pro
fit
mar
gin
to n
o m
ore
than
15 p
erce
nt,
incl
ud
ing o
n t
he
mo
st e
xp
ensi
ve
dru
gs
as d
efin
ed i
n l
aw 3
81
6/2
01
0. [Q
1-2
01
2]
No
t ye
t a
ppli
cable
.
Pre
scri
bin
g a
nd m
on
ito
rin
g
Th
e G
ov
ern
men
t:
- p
ub
lish
es b
ind
ing
pre
scri
pti
on g
uid
elin
es f
or
phy
sici
ans
def
ined
by
EO
F o
n t
he
bas
is o
f in
tern
atio
nal
pre
scri
pti
on
gu
idel
ines
to e
nsu
re a
co
st-e
ffec
tive
use
of
med
icin
es;
[No
vem
ber
20
11
]
- p
ub
lish
es a
nd
co
nti
nu
ou
sly
up
dat
es t
he
po
siti
ve
list
of
reim
bu
rsed
med
icin
es u
sing
th
e re
fere
nce
pri
ce s
yst
em d
evel
op
ed b
y
EO
F.
[No
vem
ber
20
11
]
Pa
rtia
lly
ob
serv
ed.
On
ly a
bo
ut
15
0 g
uid
elin
es h
ave
bee
n p
ubli
shed
(w
ith
sub
stan
tial
del
ays)
. N
o g
uid
elin
e h
as b
een i
mp
lem
ente
d o
r m
ade
bin
din
g s
o f
ar.
A p
osi
tive
list
of
reim
bu
rsed
med
icin
es h
as b
een
pu
bli
shed
but
it d
oes
no
t w
ork
as
a st
and
ard "
refe
ren
ce p
rice
mec
han
ism
" fo
r re
imb
urs
emen
t. I
t is
use
d a
s a
list
of
pro
duct
s
reim
bu
rsed
by
the
Sta
te,
wit
h a
n e
ntr
y f
ee c
har
ged
to
new
med
icin
es o
n t
he
list
.
Ad
dit
ion
al m
easu
res
wer
e le
gis
late
d i
n F
ebru
ary
an
d M
arch
20
12
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
62
Th
e G
ov
ern
men
t ta
kes
fu
rther
mea
sure
s to
ex
ten
d i
n a
co
st-e
ffec
tive
way
th
e e-
pre
scri
bin
g o
f m
edic
ines
, dia
gn
ost
ics
and
doct
ors
' ref
erra
ls t
o a
ll s
oci
al s
ecuri
ty f
un
ds,
hea
lth
cen
tres
an
d h
osp
ital
s. I
n c
om
pli
ance
wit
h E
U p
rocu
rem
ent
rule
s, t
he
Go
ver
nm
ent
cond
uct
s th
e nec
essa
ry t
end
erin
g p
roce
du
res
to i
mp
lem
ent
a co
mp
reh
ensi
ve
and
unif
orm
hea
lth c
are
info
rmat
ion
syst
em (
e-hea
lth s
yst
em).
[Q
4-2
01
1]
Pa
rtia
lly
ob
serv
ed.
Th
e te
nd
er f
or
e-p
resc
rip
tio
n h
as b
een
lau
nch
ed w
ith
sig
nif
ican
t
del
ays
and
is
ong
oin
g. T
her
e has
bee
n s
om
e ex
ten
sio
n o
f th
e e-
pre
scri
pti
on
sy
stem
bu
t ver
y l
imit
ed a
nd
un
succ
essf
ul:
les
s th
an
40 p
erce
nt
of
doct
ors
pre
scri
be
elec
tro
nic
ally
an
d t
he
shar
e o
f
ou
tpat
ien
t p
har
mac
euti
cal
exp
endit
ure
co
ver
ed b
y e
-pre
scri
pti
on
is 1
2 p
erce
nt.
Ther
e is
no
eff
ecti
ve
contr
ol
of
vo
lum
e an
d v
alu
e
of
pre
scri
pti
on a
nd
do
cto
rs' b
ehav
iou
r.
EO
PY
Y a
nd t
he
rem
ainin
g s
oci
al s
ecuri
ty f
un
ds
esta
bli
sh a
pro
cess
to
reg
ula
rly
ass
ess
the
info
rmat
ion
ob
tain
ed t
hro
ug
h t
he
e-p
resc
ribin
g s
yst
em a
nd p
rod
uce
reg
ula
r re
po
rts,
at
leas
t o
n a
quar
terl
y b
asis
, to
be
tran
smit
ted t
o t
he
com
pet
ent
auth
ori
ties
in t
he
Min
istr
y o
f L
abo
ur,
Min
istr
y o
f H
ealt
h,
Min
istr
y o
f F
inan
ce a
nd E
LS
TA
T. M
onit
ori
ng a
nd
ass
essm
ent
is c
arri
ed o
ut
thro
ug
h a
ded
icat
ed c
om
mo
n u
nit
un
der
SY
SP
Y. F
eed
bac
k i
s p
rov
ided
to
eac
h p
hy
sici
an a
t le
ast
ever
y q
uar
ter
and a
yea
rly
rep
ort
is
pu
bli
shed
. S
anct
ion
s an
d p
enal
ties
wil
l b
e en
forc
ed a
s a
foll
ow
-up
to t
he
asse
ssm
ent.
[Q
4-2
01
1]
No
t o
bse
rved
.
Th
e ded
icat
ed u
nit
has
no
t y
et b
een
cre
ated
in E
OP
YY
. ID
IKA
has
do
ne
a bas
ic a
sses
smen
t o
f th
e n
um
ber
an
d v
alu
e o
f
pre
scri
pti
on
s by
dif
fere
nt
fun
ds.
Fee
db
ack a
nd s
anct
ion
s re
mai
n
spo
rad
ic. N
ever
thel
ess,
new
co
ntr
acts
bet
wee
n E
OP
YY
and
pri
vat
e p
hy
sici
ans
are
mo
re s
trin
gen
t re
gar
din
g p
resc
rip
tio
n
beh
avio
ur.
Th
e G
ov
ern
men
t st
arts
to
pro
duce
a s
emi-
ann
ual
rep
ort
on t
he
pre
scri
pti
on a
nd c
on
sum
pti
on
of
med
icin
es a
nd d
iagn
ost
ic
test
s. T
his
rep
ort
in
clu
des
info
rmat
ion o
n t
he
reb
ate
rece
ived
fro
m p
har
mac
ies
and
fro
m p
har
mac
euti
cal
com
pan
ies
and
on
the
volu
me
and v
alu
e o
f m
edic
ines
. T
he
Min
istr
y o
f H
ealt
h p
rov
ides
a f
eed
bac
k r
epo
rt t
o a
ll p
hy
sici
ans
on t
hei
r pre
scri
pti
on
vo
lum
e an
d v
alue,
at
leas
t o
n a
quar
terl
y b
asis
. M
on
ito
rin
g a
nd
rep
ort
ing
of
mis
con
du
ct a
nd
co
nfl
ict
of
inte
rest
in
pre
scri
pti
on
beh
avio
ur
are
inte
nsi
fied
. [Q
4-2
01
1]
No
t o
bse
rved
.
E-p
resc
ribin
g c
ov
ers
all
med
ical
act
s (m
edic
ines
, re
ferr
als,
dia
gn
ost
ics,
su
rger
y)
in b
oth
NH
S f
acil
itie
s an
d p
rovid
ers
con
trac
ted b
y E
OP
YY
an
d t
he
soci
al s
ecuri
ty f
unds.
Det
aile
d m
onth
ly a
udit
ing r
eport
s ar
e pro
duce
d b
y N
HS
fac
ilit
ies
and b
y
pro
vid
ers.
[Q
1-2
01
2]
No
t ye
t a
ppli
cable
.
Incr
easi
ng u
se o
f gen
eric
med
icin
es
Ad
dit
ion
al m
easu
res
are
tak
en t
o p
rom
ote
the
use
of
gen
eric
med
icin
es t
hro
ug
h:
- se
ttin
g t
he
max
imu
m p
rice
of
gen
eric
s to
60
per
cen
t o
f th
e bra
nded
med
icin
e w
ith
sim
ilar
act
ive
sub
stan
ce;
[Nov
emb
er
20
11
]
- es
tabli
shin
g a
nd
mo
nit
ori
ng
com
pu
lso
ry e
-pre
scri
pti
on b
y a
ctiv
e su
bst
ance
an
d o
f le
ss e
xpen
sive
gen
eric
s w
hen
av
aila
ble
;
[Q4
-20
11
] -
asso
ciat
ing a
low
er c
ost
-sh
arin
g r
ate
to g
ener
ic m
edic
ines
th
at h
ave
a si
gnif
ican
tly
lo
wer
pri
ce t
han
the
refe
ren
ce p
rice
(lo
wer
than
60 p
erce
nt
of
the
refe
ren
ce p
rice
) o
n t
he
bas
is o
f th
e ex
per
ience
of
oth
er E
U c
ou
ntr
ies.
[Q
1-2
01
2]
Pa
rtia
lly
ob
serv
ed.
Th
e p
rice
of
gen
eric
s w
as 6
3 p
erce
nt
of
the
bra
nded
at
the
end
of
2011.
A D
ecem
ber
2011 d
ecis
ion s
et t
he
pri
ce a
t 55 p
erce
nt
of
the
bra
nded
med
icin
e, b
ut
it i
s st
ill
a fi
xed
pri
ce n
ot
a
max
imu
m p
rice
. A
s a
resu
lt t
her
e is
no
co
mp
etit
ion
in
th
is
mar
ket
, th
at c
ou
ld l
ead
to
lo
wer
pri
ces
over
tim
e.
Th
ere
is n
o c
om
pu
lso
ry p
resc
ripti
on
by
act
ive
sub
stan
ce I
NN
,
no
gen
eric
su
bst
itu
tio
n i
n p
har
mac
ies
and
no g
uid
elin
es
ensu
rin
g t
he
less
ex
pen
sive
med
icin
e is
pro
vid
ed
Th
ere
hav
e bee
n n
o c
han
ges
in
co
st-s
har
ing
wh
ich
is
par
tly
rela
ted
to
th
e fa
ct t
hat
th
ere
is n
o r
eal
refe
rence
pri
ce s
yst
em f
or
reim
bu
rsem
ent.
Ad
dit
ion
al m
easu
res
wer
e le
gis
late
d i
n F
ebru
ary
an
d M
arch
20
12
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
63
Th
e G
ov
ern
men
t ta
kes
fu
rther
mea
sure
s to
en
sure
th
at a
t le
ast
50 p
erce
nt
of
the
vo
lum
e o
f m
edic
ines
use
d b
y p
ubli
c hosp
ital
s
is c
om
po
sed
of
gen
eric
s w
ith a
pri
ce b
elo
w t
hat
of
sim
ilar
bra
nd
ed p
rod
uct
s an
d o
ff-p
aten
t m
edic
ines
, in
par
ticu
lar
by
mak
ing
com
pu
lso
ry t
hat
all
pu
bli
c h
osp
ital
s p
rocu
re p
har
mac
euti
cal
pro
du
cts
by
act
ive
sub
stan
ce.
[Q4
-201
1]
On
go
ing
.
Ab
ou
t 3
0 p
erce
nt
of
the
exp
end
itu
re o
n p
har
mac
euti
cals
in
ho
spit
als
is m
ade
of
gen
eric
s an
d t
his
can
sti
ll g
o u
p.
NH
S (
ESY
) se
rvic
e pro
visi
on
A p
lan
for
the
reo
rgan
isat
ion
an
d r
estr
uct
uri
ng i
s p
rep
ared
for
the
sho
rt a
nd
med
ium
ter
m w
ith
a v
iew
to
red
uci
ng
ex
isti
ng
inef
fici
enci
es,
uti
lisi
ng
eco
no
mie
s o
f sc
ale
and
sco
pe,
an
d i
mp
rov
ing
qu
alit
y o
f ca
re f
or
pat
ien
ts.
Th
e ai
m i
s to
red
uce
ho
spit
al c
ost
s by
at
leas
t 1
0 p
erce
nt
in 2
01
1 a
nd
by
an
ad
dit
ion
al 5
per
cen
t in
201
2 i
n a
ddit
ion t
o t
he
pre
vio
us
yea
r. T
his
is
to
be
ach
iev
ed t
hro
ug
h:
- in
crea
sin
g t
he
mo
bil
ity
of
hea
lth
care
sta
ff (
incl
ud
ing
do
cto
rs)
wit
hin
an
d a
cro
ss h
ealt
h f
acil
itie
s an
d h
ealt
h r
egio
ns.
[Q
4-
20
11
] -
adju
stin
g p
ub
lic
ho
spit
al p
rov
isio
n w
ith
in a
nd b
etw
een h
osp
ital
s w
ith
in t
he
sam
e d
istr
ict
and
hea
lth
reg
ion
; [Q
4-2
01
1]
- re
vis
ing t
he
acti
vit
y o
f sm
all
hosp
ital
s to
war
ds
spec
iali
sati
on
in
are
as s
uch
as
reh
abil
itat
ion,
cance
r tr
eatm
ent
or
term
inal
care
wh
ere
rele
van
t; [
Q4
-20
11
]
Pa
rtia
lly
ob
serv
ed.
Ho
spit
al o
per
atio
nal
ex
pen
dit
ure
was
red
uce
d b
y 1
3.4
per
cent
sin
ce 2
00
9 (
7.2
per
cen r
educt
ion i
n 2
01
1 c
om
par
ed t
o 2
01
0).
Ho
spit
al a
dm
inis
trat
ion
s h
ave
bee
n m
erg
ed (
82 r
ath
er t
han
13
1
ho
spit
al b
oar
ds)
bu
t n
ot
nec
essa
rily
the
ho
spit
als
wit
hin
eac
h
adm
inis
trat
ion
. T
he
nu
mb
er o
f ho
spit
al b
eds
has
bee
n r
edu
ced
.
So
me
faci
liti
es h
ave
bee
n c
lose
d o
r tr
ansf
orm
ed. N
o p
rog
ress
reg
ard
ing m
ob
ilit
y o
f st
aff.
A s
yst
em f
or
com
par
ing
ho
spit
al p
erfo
rman
ce (
ben
chm
ark
ing
) is
set
up
on t
he
bas
is o
f a
com
pre
hen
siv
e se
t o
f in
dic
ato
rs.
[Q4
-20
11
] A
nn
ual
rep
ort
s w
ill
be
pu
bli
shed
as
of
Q1
-20
12.
On
goin
g.
On
th
e bas
is o
f E
SY
.net
a b
asic
set
of
fin
anci
al a
nd
act
ivit
y
ind
icat
ors
is
now
co
mp
iled
fo
r al
l N
HS
ho
spit
als.
A f
irst
rep
ort
is d
ue
by
Mar
ch 2
01
2.
Wa
ges
an
d h
um
an
res
ou
rce
ma
na
gem
ent
in t
he
hea
lth c
are
sec
tor
Th
e M
inis
trie
s of
Hea
lth
an
d L
abo
ur,
in c
oo
per
atio
n w
ith
th
e M
inis
try
of
Fin
ance
, p
rep
are
the
firs
t d
raft
rep
ort
pre
sen
tin
g t
he
stru
ctu
re (
age,
sp
ecia
lty
, g
rad
e, r
egio
nal
dis
trib
uti
on
), l
evel
s o
f re
mu
ner
atio
n (
incl
udin
g f
ees
pro
vis
ions
to c
on
sult
ants
an
d
do
cto
rs)
and t
he
vo
lum
e an
d d
ynam
ics
of
emp
loy
men
t in
ho
spit
als,
hea
lth c
entr
es, an
d h
ealt
h f
un
ds.
Th
is r
epo
rt w
ill
be
up
dat
ed a
nn
ual
ly a
nd
wil
l b
e u
sed
as
a h
um
an r
eso
urc
e pla
nn
ing
in
stru
men
t. T
he
20
11
rep
ort
wil
l pre
sen
t pla
ns
for
the
allo
cati
on
an
d r
e-q
ual
ific
atio
n o
f h
um
an r
eso
urc
es f
or
the
per
iod u
p t
o 2
01
3.
It w
ill
also
pro
vid
e g
uid
ance
fo
r th
e ed
uca
tio
n
syst
em a
nd i
t w
ill
spec
ify
a p
lan
to r
eall
oca
te q
ual
ifie
d a
nd s
upport
sta
ff w
ith
in t
he
NH
S a
nd
hea
lth
fu
nd
s. [
Q4
-20
11]
On
go
ing
.
A b
asic
rep
ort
has
bee
n d
on
e p
rese
nti
ng
th
e n
um
ber
of
phy
sici
ans,
nu
rses
, au
xil
iary
an
d a
dm
inis
trat
ive
staf
f by
reg
ion,
by
ag
e an
d b
y e
du
cati
on
lev
el.
The
stu
dy
is
bei
ng
up
gra
ded
for
spec
ialt
y.
Th
e G
ov
ern
men
t ex
ten
ds
the
use
of
capit
atio
n p
aym
ents
of
phy
sici
ans,
curr
entl
y u
sed
by
OA
EE
, to
all
co
ntr
acts
bet
wee
n
soci
al s
ecu
rity
fu
nd
s an
d t
he
doct
ors
th
ey c
ontr
act.
Th
e n
ew p
aym
ent
mec
han
ism
sta
rts
for
each
new
co
ntr
act
renew
ed i
n
2011 a
nd f
or
all
contr
acts
fro
m 2
012.
It d
efin
es a
min
imu
m n
um
ber
of
pat
ien
ts p
er d
oct
or,
on t
he
bas
is o
f th
e ex
per
ien
ce o
f
oth
er E
U c
ou
ntr
ies.
The
new
sy
stem
wil
l le
ad t
o a
red
uct
ion i
n t
he
ov
eral
l co
mp
ensa
tio
n c
ost
(w
ages
an
d f
ees)
of
phy
sici
ans
by
at
leas
t 1
0 p
erce
nt
in 2
01
1,
and
an
ad
dit
ion
al 1
5 p
erce
nt
in 2
012
, as
co
mp
ared
to
th
e p
revio
us
yea
r. [
Novem
ber
2011]
Pa
rtia
lly
ob
serv
ed.
Th
e ca
pit
atio
n s
yst
em h
as b
een
exte
nd
ed t
o a
lmost
all
co
ntr
acts
bet
wee
n E
OP
YY
an
d p
rivat
e p
hy
sici
ans
and
a r
edu
ctio
n i
n
pay
roll
has
bee
n o
bse
rved
. H
ow
ever
, th
e n
um
ber
of
pat
ien
ts p
er
doct
or
is s
till
ver
y h
igh b
y E
U s
tandar
ds
and t
her
e ar
e m
any
spec
iali
st p
hy
sici
ans
com
par
ed t
o g
ener
al p
ract
itio
ner
s an
d
pae
dia
tric
ians.
Acc
ou
nti
ng
an
d c
on
tro
l
Inte
rnal
co
ntr
oll
ers
are
assi
gn
ed t
o a
ll m
ajor
ho
spit
als.
[D
ecem
ber
2011]
Ob
serv
ed.
By
en
d-O
ctob
er 2
011
, th
e G
ov
ern
men
t st
arts
pu
bli
shin
g t
he
month
ly r
eport
wit
h a
nal
ysi
s an
d d
escr
ipti
on o
f det
aile
d d
ata
on
hea
lth
care
ex
pen
dit
ure
by
all
so
cial
sec
uri
ty f
un
ds
wit
h a
lag
of
thre
e w
eeks
afte
r th
e en
d o
f th
e re
spec
tiv
e m
on
th.
O
bse
rved
.
Mo
nth
ly d
ata
are
avai
lab
le f
or
all
soci
al s
ecu
rity
sch
emes
.
So
cial
sec
uri
ty f
un
ds
star
t p
ubli
shin
g a
n a
nn
ual
rep
ort
on m
edic
ine
pre
scri
pti
on.
Th
e an
nual
rep
ort
an
d t
he
ind
ivid
ual
pre
scri
pti
on
rep
ort
s ex
amin
e p
resc
rip
tio
n b
ehav
iou
r w
ith
par
ticu
lar
refe
ren
ce t
o t
he
mo
st c
ost
ly a
nd m
ost
use
d m
edic
ines
.
[Q1
-20
12
]
All
ho
spit
als
adop
t co
mm
itm
ent
reg
iste
rs. [Q
1-2
01
2]
No
t ye
t a
ppli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
64
Ho
spit
al
com
pu
teri
sati
on
an
d m
on
ito
rin
g s
yste
m
Th
e nec
essa
ry t
end
erin
g p
roce
dure
s ar
e ca
rrie
d o
ut
to d
evel
op
th
e fu
ll a
nd i
nte
gra
ted
sy
stem
of
ho
spit
als'
IT
sy
stem
s. [
Q4
-
20
11
]
On
go
ing
wit
h d
elay
.
Th
e M
inis
try
of
Hea
lth h
as p
rep
ared
the
term
s o
f re
fere
nce
.
Th
e M
inis
try
of
Hea
lth c
om
ple
tes
the
ER
P (
ente
rpri
se-r
eso
urc
e p
lan
nin
g)
pro
gra
mm
e o
f h
osp
ital
co
mp
ute
risa
tio
n a
nd
exte
nd
s co
ver
age
of
the
web
-bas
ed p
latf
orm
ES
Y.n
et t
o a
ll h
osp
ital
s. [
Q4
-20
11
] O
ng
oin
g w
ith
del
ay
. P
lan
ned
fo
r M
arch
20
12
Fu
rth
er m
easu
res
are
taken
to
im
pro
ve
the
acco
un
tin
g,
bo
ok
-kee
pin
g o
f m
edic
al s
up
pli
es a
nd
bil
lin
g s
yst
ems,
th
rou
gh
:
- fi
nal
isin
g t
he
intr
od
uct
ion o
f do
ub
le-e
ntr
y a
ccru
al a
cco
un
tin
g s
yst
ems
and t
he
reg
ula
r an
nual
pub
lica
tio
n o
f bal
ance
sh
eets
in a
ll h
osp
ital
s;
- th
e ca
lcula
tio
n o
f st
ock
s an
d f
low
s o
f m
edic
al s
up
pli
es i
n a
ll t
he
ho
spit
als
usi
ng t
he
unif
orm
codin
g s
yst
em f
or
med
ical
suppli
es d
evel
oped
by
the
Hea
lth P
rocu
rem
ent
Com
mis
sion (
EP
Y)
and
th
e N
atio
nal
Cen
tre
for
Med
ical
Tec
hn
olo
gy
(EK
EV
YL
) fo
r th
e purp
ose
of
pro
curi
ng
med
ical
su
pp
lies
;
- t
imel
y i
nvoic
ing o
f tr
eatm
ent
cost
s (n
o l
ater
th
an 2
mo
nth
s) t
o G
reek
so
cial
sec
uri
ty f
unds,
oth
er E
U c
ountr
ies
and p
rivat
e
hea
lth
in
sure
rs f
or
the
trea
tmen
t o
f n
on
-nat
ion
als/
no
n-r
esid
ents
. [Q
4-2
011
]
Pa
rtia
lly
ob
serv
ed.
Do
ub
le-e
ntr
y a
cco
un
tin
g s
yst
em h
as b
een f
inal
ised
.
Th
e ca
lcula
tio
n o
f st
ock
an
d f
low
s co
ver
s 8
0 p
erce
nt
of
the
pro
ced
ure
s,
NH
S f
acil
itie
s ar
e n
ow
tim
ely
in
voic
ing t
reat
men
t co
sts.
Ho
wev
er, th
ese
inv
oic
es c
ov
er o
nly
par
tial
ly t
he
cost
s of
trea
tmen
t an
d w
ill
be
up
dat
ed w
hen
DR
Gs
are
in p
lace
.
Th
e p
rog
ram
me
of
ho
spit
al c
om
pu
teri
sati
on
all
ow
s fo
r a
mea
sure
men
t o
f h
osp
ital
and h
ealt
h c
entr
es a
ctiv
ity
. T
he
Go
ver
nm
ent
def
ines
a c
ore
set
of
acti
vit
y a
nd e
xpen
dit
ure
in
dic
ators
in
lin
e w
ith
Eu
rost
at,
OE
CD
an
d W
HO
hea
lth d
atab
ases
.
EL
ST
AT
sta
rts
pro
vid
ing d
ata
in l
ine
wit
h t
he
Sy
stem
of
Hea
lth
Acc
ou
nts
(jo
int
qu
esti
on
nai
re c
oll
ecti
on e
xer
cise
). [
Q4
-
20
11
]
On
go
ing
wit
h d
elay
.
Th
e p
rog
ram
me
of
ho
spit
al c
om
pu
teri
sati
on
all
ow
s fo
r th
e se
ttin
g u
p o
f a
bas
ic s
yst
em o
f pat
ien
t el
ectr
onic
med
ical
rec
ord
s.
[Q4
-20
11
]
On
go
ing
.
Bas
ic p
atie
nt
reco
rds
exis
t in
55 p
erce
nt
of
the
NH
S h
osp
ital
s.
In a
ll N
HS
ho
spit
als,
th
e G
ov
ernm
ent
pil
ots
a s
et o
f D
RG
s (d
iagnost
ic-r
elat
ed g
roups)
, w
ith a
vie
w t
o d
evel
opin
g a
mo
der
n
ho
spit
al c
ost
ing s
yst
em f
or
con
trac
tin
g (
on t
he
bas
is o
f p
rosp
ecti
ve
blo
ck c
on
trac
ts b
etw
een
EO
PY
Y a
nd
NH
S).
To s
up
po
rt
the
dev
elo
pm
ent
of
DR
Gs,
the
gov
ern
men
t d
evel
op
s cl
inic
al g
uid
elin
es. [Q
4-2
01
1]
On
goin
g.
DR
Gs
hav
e b
een p
ilo
ted
an
d a
re n
ow
bei
ng
rev
ised
as
a
con
seq
uen
ce.
Cen
tra
lise
d p
rocu
rem
ent
Th
e G
ov
ern
men
t w
ill
mo
ve
tow
ard
s a
new
cen
tral
ised
pro
cure
men
t o
f p
har
mac
euti
cals
an
d m
edic
al g
oo
ds
for
the
NH
S
thro
ug
h t
he
Su
pp
lies
Co
ord
inat
ion
Co
mm
itte
e w
ith
the
sup
po
rt o
f th
e S
pec
ific
atio
ns
Co
mm
itte
e, u
sin
g t
he
un
ifo
rm c
od
ing
syst
em f
or
med
ical
su
pp
lies
an
d p
har
mac
euti
cals
. [Q
1-2
01
2]
No
t ye
t a
ppli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
65
Ind
epen
den
t ta
sk f
orc
e o
f h
ealt
h p
oli
cy e
xper
ts
Th
e in
dep
enden
t ta
sk f
orc
e o
f hea
lth p
oli
cy e
xp
erts
pro
du
ces,
in c
oo
per
atio
n w
ith t
he
Eu
rop
ean
Com
mis
sio
n,
EC
B a
nd
IM
F,
a fi
rst
dra
ft o
f it
s p
oli
cy r
epo
rt,
wit
h s
pec
ific
rec
om
men
dat
ion
s o
n p
oli
cies
to
be
imp
lem
ente
d. [e
nd
-Oct
ob
er 2
01
1]
Th
e
rep
ort
an
d p
oli
cies
pro
po
sals
co
ver
the
foll
ow
ing
are
as:
- h
ealt
h s
yst
em g
ov
ern
ance
to
red
uce
th
e fr
agm
enta
tio
n o
f th
e sy
stem
;
- fi
nan
cin
g:
po
oli
ng
, co
llec
tio
n a
nd
dis
trib
uti
on
of
fun
ds;
- h
arm
on
isat
ion o
f h
ealt
h p
ackag
es a
cro
ss f
un
ds;
- se
rvic
e p
rovis
ion
an
d i
nce
nti
ves
fo
r p
rov
ider
s in
clu
din
g:
!in
tegra
tio
n b
etw
een
pri
vat
e an
d p
ub
lic
pro
vis
ion
;
!p
rim
ary
car
e v
is-à
-vis
sp
ecia
list
and h
osp
ital
car
e;
!ef
fici
ency
in
the
pro
vis
ion o
f h
osp
ital
ser
vic
es;
!p
har
mac
euti
cal
con
sum
pti
on
;
!hum
an r
esourc
es;
- p
ub
lic
hea
lth
pri
ori
ties
, hea
lth
pro
mo
tio
n a
nd
dis
ease
pre
ven
tio
n;
- d
ata
coll
ecti
on
, h
ealt
h t
ech
no
logy
ass
essm
ent
and
ass
essm
ent
of
per
form
ance
;
- ex
pen
dit
ure
con
tro
l m
echan
ism
s.
Th
e re
po
rt w
ill
pro
vid
e p
reli
min
ary
qu
anti
tati
ve
targ
ets
in t
he
fiel
ds
abo
ve,
in o
rder
to
co
ntr
ibute
to k
eep
pu
bli
c h
ealt
h
exp
end
itu
re -
-con
stan
t at
, o
r b
elow
, 6
per
cen
t o
f G
DP
.
Th
e ta
sk f
orc
e o
f h
ealt
h p
oli
cy e
xp
erts
pro
du
ces
the
final
co
mp
rehen
siv
e p
oli
cy r
epo
rt,
wit
h s
pec
ific
rec
om
men
dat
ion
s o
n
po
lici
es t
o b
e im
ple
men
ted.
[en
d-N
ov
emb
er 2
011
]
Ob
serv
ed w
ith
del
ay
.
Th
e fi
rst
dra
ft w
as s
ub
mit
ted
at
end
No
vem
ber
and
th
e fi
nal
dra
ft b
y m
id-J
anu
ary
. A
n i
nte
rnal
wo
rksh
op
to
ok
pla
ce t
o
dis
cuss
th
e re
po
rt a
nd t
he
rep
ort
has
bee
n g
iven
to
th
e M
inis
try
of
Hea
lth
. T
he
rep
ort
pro
vid
es a
n o
ver
vie
w o
f th
e m
easu
res
imp
lem
ente
d a
nd
rec
om
men
dat
ion
s fo
r fu
ture
mea
sure
s.
On
th
e bas
is o
f th
is r
epo
rt, th
e G
ov
ern
men
t ad
op
ts a
n a
ctio
n p
lan
by
en
d-2
011,
incl
ud
ing a
tim
etab
le f
or
concr
ete
acti
on
s.
No
t o
bse
rved
. S
ince
th
e re
po
rt w
as d
elay
ed,
the
Min
istr
y o
f H
ealt
h i
s n
ow
pre
par
ing t
he
acti
on
pla
n.
Th
e ta
skfo
rce
pro
du
ces
an i
mp
lem
enta
tio
n r
epo
rt, re
vis
ing t
he
poli
cies
im
ple
men
ted s
o f
ar.
[Q2
-201
2]
No
t ye
t a
ppli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
66
Ta
ble
A3
- F
isca
l se
cto
r re
gu
lati
on
an
d s
up
erv
isio
n
C
om
men
ts
Ea
ch q
ua
rter
, th
e G
ov
ern
men
t tr
ansf
ers
EU
R 1
00
0 m
illi
on t
o a
ded
icat
ed g
ov
ern
men
t ac
cou
nt
op
ened
by
the
Gen
eral
Acc
ounti
ng O
ffic
e. F
unds
from
this
acc
ount
are
regula
rly
pai
d t
o t
he
HF
SF
(H
elle
nic
Fin
anci
al S
tab
ilit
y F
un
d)
to e
nsu
re t
he
latt
er k
eep
s a
cash
bal
ance
of
EU
R 1
50
0 m
illi
on a
nd
if
pro
gra
mm
e re
vie
ws
of
ban
k c
apit
al s
ug
ges
t th
at t
he
reso
urc
es a
re
nec
essa
ry.
The
rele
ase
of
the
fund
s fr
om
th
at a
cco
un
t is
su
bje
ct t
o a
gre
emen
t by
the
Eu
ropea
n C
om
mis
sio
n,
EC
B a
nd
IM
F
staf
f. A
ny
su
pp
ort
pro
vid
ed w
ith
HF
SF
res
ou
rces
wil
l co
nti
nue
to b
e in
lin
e w
ith
sta
te a
id r
ule
s.
Ob
serv
ed.
To
tal
EU
R 3
000
mil
lio
n h
ave
bee
n t
ran
sfer
red
to
th
e ac
cou
nt.
The
Ban
k o
f G
reec
e an
d t
he
HF
SF
com
ple
te a
mem
ora
nd
um
of
un
der
stan
din
g t
o f
urt
her
str
eng
then
th
eir
coo
per
atio
n,
incl
ud
ing s
har
ing
of
appro
pri
ate
sup
erv
iso
ry i
nfo
rmat
ion
, p
rior
to t
he
sixth
dis
bu
rsem
ent.
O
bse
rved
.
Ov
er t
he
med
ium
ter
m,
ban
ks
wil
l nee
d t
o r
educe
thei
r re
lian
ce o
n E
uro
syst
em b
orr
ow
ing
an
d g
over
nm
ent
gu
aran
tees
.
Reg
ula
r u
pd
ates
of
med
ium
-ter
m f
un
din
g p
lan
s u
nd
er g
uid
ance
of
the
Ban
k o
f G
reec
e w
ill
be
an i
mport
ant
too
l to
en
sure
th
at
this
pro
cess
pro
ceed
s at
a p
ace
con
sist
ent
wit
h t
he
pro
gra
mm
e’s
mac
roec
on
om
ic,
fisc
al, an
d f
inan
cial
fra
mew
ork
. T
he
nex
t
up
dat
e is
fin
alis
ed b
y e
nd
-2011.
Ob
serv
ed.
Ban
ks’
co
nso
lidat
ed c
ore
tie
r 1
min
imu
m r
egu
lato
ry c
apit
al r
equir
emen
t w
ill
be
set
at 1
0 p
erce
nt
fro
m J
an
ua
ry 2
01
2 o
n.
The
core
tie
r 1 c
apit
al r
equir
emen
ts w
ill
excl
ud
e hy
bri
d c
apit
al,
bu
t w
ill
incl
ud
e p
refe
ren
ce s
har
es i
ssu
ed b
y b
ank
s an
d s
ub
scri
bed
by
th
e G
reek
gov
ern
men
t at
th
e o
nse
t o
f th
e g
lobal
fin
anci
al c
risi
s in
20
08
-09.
Rev
ised
.
Th
e B
ank
of
Gre
ece
ensu
res
an e
qu
ival
ent
capit
al t
reat
men
t o
f ri
sks
rela
ted t
o G
reek
go
ver
nm
ent
bond e
xposu
res
acro
ss a
ll
inst
itu
tio
ns
(wit
h r
efer
ence
to
the
NP
V r
edu
ctio
n o
f th
e P
SI)
. In
th
is c
on
text,
th
e B
ank
of
Gre
ece
upd
ates
its
las
t P
illa
r II
asse
ssm
ent
[on
e m
on
th]
afte
r co
mp
leti
on
of
the
PS
I.
Ob
serv
ed.
Th
e dia
gn
ost
ic o
f b
ank
lo
an p
ort
foli
os
com
mis
sio
ned
by
th
e B
ank o
f G
reec
e w
ill
be
concl
uded
by
en
d-D
ecem
ber
20
11.
The
Ban
k o
f G
reec
e w
ill
ensu
re t
hat
any
exis
tin
g u
nder
-pro
vis
ion
ing r
evea
led b
y t
his
ex
erci
se w
ill
be
reco
gn
ized
in
ban
ks'
pro
fit
and
lo
ss a
cco
unts
. T
he
Ban
k o
f G
reec
e, i
n c
oo
per
atio
n w
ith
th
e C
om
mis
sio
n,
the
EC
B, an
d t
he
IMF
sta
ff t
eam
s w
ill
use
th
e
dia
gnost
ic r
esult
s to
det
erm
ine
capit
al n
eeds
ov
er t
he
thre
e y
ear
hori
zon
, b
ased
on
a m
inim
um
co
re t
ier
1 t
arg
et c
apit
al r
atio
of
6 p
erce
nt
un
der
an a
dver
se s
tres
s te
st s
cen
ario
. T
he
cap
ital
nee
ds
wil
l be
asse
ssed
per
ban
k a
nd d
iscl
ose
d t
o t
he
mar
ket
by
end
-Feb
ruary
2012.
Rev
ised
.
Fo
llo
win
g t
he
add
itio
nal
cap
ital
nee
ds
asse
ssm
ent
bas
ed o
n t
he
dia
gnost
ic s
tudy
, ban
ks
may
be
giv
en t
ime
to r
aise
this
add
itio
nal
cap
ital
on
th
e m
ark
et. If
th
e B
ank o
f G
reec
e det
erm
ines
th
at a
per
iod
of
tim
e sh
ou
ld b
e al
low
ed f
or
a b
ank
to
mee
t
cap
ital
req
uir
emen
ts, th
e re
lev
ant
ban
k w
ill
be
asked
to p
rese
nt,
by
en
d-A
pri
l 2
01
2,
a v
iab
le 3
-yea
r b
usi
nes
s p
lan
to
th
is e
nd.
Any
ban
k i
n t
his
cir
cum
stan
ce w
ill
hav
e to
mee
t ca
pit
al r
equ
irem
ents
by
no
lat
er t
han
en
d-A
ugu
st 2
012.
Any
cap
ital
to
be
rais
ed t
o t
his
en
d s
ho
uld
co
nsi
st o
f in
stru
men
ts q
ual
ify
ing a
s T
ier
I ca
pit
al.
No
t ye
t a
ppli
cable
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
67
Th
e g
over
nan
ce a
rran
gem
ents
of
fin
anci
al o
ver
sigh
t ag
enci
es w
ill
be
revie
wed
in c
on
sult
atio
n w
ith t
he
Eu
rop
ean
Co
mm
issi
on
, E
CB
, an
d I
MF
sta
ff:
the
org
anis
atio
nal
arr
angem
ents
fo
r th
e B
ank o
f G
reec
e to
en
sure
th
at t
hey
are
in l
ine
wit
h b
est
inte
rnat
ion
al p
ract
ice
and
th
at
any
po
ten
tial
con
flic
t o
f in
tere
st i
n i
ts e
xp
anded
su
per
vis
ion
an
d r
eso
luti
on r
ole
is
avo
ided
;
the
corp
ora
te g
over
nan
ce a
rran
gem
ents
for
the
HF
SF
(in
cludin
g t
he
nee
d f
or
inte
rnat
ional
ly r
eco
gniz
ed p
rofe
ssio
nal
s w
ith
ban
kin
g e
xp
erie
nce
to
be
mem
ber
s o
f th
e b
oar
d w
ith
vo
tin
g r
igh
ts);
an
d
the
go
ver
nan
ce a
rran
gem
ents
fo
r th
e H
DIG
F (
to a
ddre
ss p
ote
nti
al c
onfl
icts
of
inte
rest
).
Th
e en
actm
ent
of
legis
lati
on
to
ad
dre
ss a
ny
outs
tan
din
g i
ssu
es i
n t
hes
e ar
eas
wil
l b
e co
mp
lete
d b
y e
nd
-2011.
Ob
serv
ed.
Th
e g
over
nm
ent
com
mit
s to
full
y s
ub
scri
be
its
shar
e in
cas
h i
n A
TE
ban
k,
and t
o p
urc
has
e an
y o
ther
un
sub
scri
bed
sh
ares
(aft
er n
oti
fica
tion
to
th
e E
uro
pea
n C
om
mis
sio
n).
An
ap
pro
pri
ate
amo
un
t o
f fu
nd
s w
ill
be
set
asid
e fo
r th
is p
urp
ose
. T
his
cap
ital
incr
ease
wil
l be
refl
ecte
d i
n A
TE
’s r
estr
uct
uri
ng
pla
n,
an u
pd
ate
of
wh
ich
wil
l be
resu
bm
itte
d t
o t
he
Eu
ropea
n
Com
mis
sion b
y e
nd
-Oct
ob
er 2
011.
Ob
serv
ed..
Reg
ard
ing t
he
Hel
len
ic C
on
sig
nm
ent
and L
oan
Fu
nd
(H
CL
F),
an
im
ple
men
tin
g d
ecre
e an
d c
om
mit
men
ts t
o c
om
ply
wit
h
stat
e ai
d r
ule
s w
ill
clar
ify
th
e fu
ture
tas
ks
of
the
rem
ain
ing
act
ivit
ies
of
the
HC
LF
, en
suri
ng
th
at t
hes
e w
ill
no
t b
e in
com
pet
itio
n w
ith c
om
mer
cial
act
ivit
ies.
A m
ore
det
aile
d s
ched
ule
fo
r tr
ansf
erri
ng
th
e co
mm
erci
al a
ctiv
itie
s an
d t
he
abo
ve-
men
tio
ned
co
mm
itm
ents
wil
l be
spec
ifie
d b
y e
nd
-Oct
ob
er 2
01
1 a
nd
wil
l th
erea
fter
be
end
ors
ed b
y a
n I
nte
r-M
inis
teri
al
Dec
isio
n.
The
dis
po
sal
of
the
com
mer
cial
act
ivit
ies
bra
nch
wil
l be
com
ple
ted
on o
r b
efo
re e
nd
-Ju
ly 2
012.
Any
support
pro
vid
ed b
y t
he
HD
IGF
and t
he
HF
SF
in t
he
fram
ewo
rk o
f re
solu
tio
n w
ill
be
no
tifi
ed t
o t
he
Eu
ropea
n
Com
mis
sion u
nder
sta
te a
id r
ule
s.
Ob
serv
ed.
Th
e B
ank
of
Gre
ece
wil
l re
quir
e ca
pit
al s
ho
rtag
es t
o b
e ad
dre
ssed
by
en
d-N
ov
emb
er 2
01
1,
[or
tak
e th
e ap
pro
pri
ate
acti
on
s to
dea
l w
ith t
he
situ
atio
n (
by
en
d-N
ov
emb
er 2
01
1)]
in
lin
e w
ith E
U s
tate
aid
ru
les.
Un
til
cap
ital
sho
rtag
es h
ave
bee
n r
eso
lved
,
the
Ban
k o
f G
reec
e w
ill
clo
sely
mo
nit
or
affe
cted
ban
ks
and c
onti
nuousl
y e
nfo
rce
appro
pri
ate
rem
edia
l m
easu
res.
Ob
serv
ed.
Act
ion
tak
en o
n T
ban
k a
nd F
BB
ank
.
Th
e B
ank
of
Gre
ece
com
mit
s to
co
nti
nu
e ef
fort
s to
red
uce
rem
un
erat
ion o
f it
s st
aff
in l
igh
t o
f th
e ov
eral
l ef
fort
of
fisc
al
con
soli
dat
ion
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
68
Ta
ble
A4
- G
row
th e
nh
an
cin
g s
tru
ctu
ra
l re
form
s
C
om
men
ts
To
str
eng
then
lab
ou
r m
ark
et i
nst
itu
tio
ns
Wa
ge
sett
ing
Th
e G
ov
ern
men
t in
itia
tes
dis
cuss
ion
s [Q
4-2
01
1]
wit
h s
oci
al p
artn
ers
to e
xam
ine
all
lab
ou
r m
ark
et p
aram
eter
s th
at a
ffec
t th
e
com
pet
itiv
enes
s o
f th
e co
mp
anie
s an
d t
he
eco
nom
y a
s a
wh
ole
. T
he
goal
is
to c
on
clu
de
a n
atio
nal
tri
par
tite
ag
reem
ent
wh
ich
add
ress
es t
he
mac
roec
on
om
ic c
hal
len
ges
to
su
pp
ort
str
on
ger
co
mpet
itiv
enes
s, g
row
th a
nd e
mp
loy
men
t.
Ob
serv
ed.
Th
e G
ov
ern
men
t in
itia
ted
dis
cuss
ions
wit
h s
oci
al p
artn
ers.
Ho
wev
er,
since
th
e o
utc
om
e w
as n
ot
sati
sfac
tory
, th
e
Go
ver
nm
ent
adop
ted
leg
isla
tio
n t
o r
edu
ce l
abo
ur
cost
s.
Mo
reo
ver
, b
ased
on
a d
ialo
gu
e w
ith
so
cial
par
tner
s an
d t
akin
g i
nto
acc
ou
nt
the
ob
ject
ive
of
crea
tin
g a
nd
pre
serv
ing
jo
bs
and
imp
rov
ing
th
e fi
rms’
co
mp
etit
iven
ess,
th
e G
ov
ernm
ent
ado
pts
fu
rth
er m
easu
res
to a
llo
w t
he
adap
tati
on
of
wag
es t
o
eco
no
mic
co
nd
itio
ns.
In p
arti
cula
r:
"th
e ex
ten
sio
n o
f o
ccu
pat
ional
an
d s
ecto
ral
coll
ecti
ve
agre
emen
ts i
s su
spen
ded
unti
l en
d-2
01
4;
"th
e so
-cal
led
fav
ou
rab
ilit
y p
rin
cip
le i
s su
spen
ded
th
rou
gh
ou
t th
e M
TF
S p
erio
d,
in s
uch
a m
ann
er t
hat
fir
m-l
evel
agre
emen
ts t
ake
pre
ceden
ce o
ver
sec
tora
l an
d o
ccu
pat
ional
ag
reem
ents
;
"fi
rm-l
evel
co
llec
tive
contr
acts
can
be
sig
ned
eit
her
by
tra
de
unio
ns
or,
wh
en t
her
e is
no f
irm
-lev
el u
nio
n,
by
work
counci
ls
or
oth
er e
mp
loy
ees'
rep
rese
nta
tio
ns,
irr
espec
tiv
e o
f th
e fi
rms'
siz
e.
Th
ese
amen
dm
ents
are
leg
isla
ted p
rior
to t
he
sixth
dis
bu
rsem
ent.
Ob
serv
ed.
Fig
hti
ng u
nd
ecla
red
wo
rk
Qu
anti
tati
ve
targ
ets
on
th
e n
um
ber
of
con
tro
ls o
f un
dec
lare
d w
ork
to
be
exec
ute
d a
re s
et f
or
the
Lab
ou
r In
spec
tora
te.
A p
ilot
stu
dy
is
imp
lem
ente
d i
n o
rder
to v
erif
y t
he
fav
oura
ble
fin
anci
al n
et i
mp
act
on
the
ov
eral
l so
cial
sec
uri
ty b
udget
of
a dis
count
of
up
to 1
0 p
erce
nt
on
so
cial
co
ntr
ibu
tio
ns
for
those
en
terp
rise
s in
tro
du
cin
g t
he
labo
ur
card
. T
he
pil
ot
study
cover
s a
lim
ited
scope
of
firm
s (m
axim
um
100),
over
a s
hort
per
iod o
f ti
me
(max
imum
four
month
s). [D
ecem
ber
2011]
An a
sses
smen
t on t
he
effe
ctiv
enes
s of
the
Lab
our
Insp
ecto
rate
law
wil
l b
e m
ade
six
mo
nth
s af
ter
its
imp
lem
enta
tion
. [Q
4-
20
11
] S
ho
uld
the
law
pro
ve
inef
fect
ive,
an a
pp
rop
riat
e am
end
men
t w
ill
be
ado
pte
d.
In p
arti
cula
r, a
ny
wid
er-s
cale
ap
pli
cati
on
of
a dis
cou
nt
of
up
to
10 p
erce
nt
on
so
cial
co
ntr
ibu
tio
ns
for
tho
se e
nte
rpri
ses
intr
od
uci
ng
th
e la
bo
ur
card
wil
l be
con
dit
ion
al
on
th
e p
ilot
stu
dy
sh
ow
ing s
uff
icie
nt
evid
ence
of
a fa
vo
ura
ble
fin
anci
al i
mp
act
of
the
dis
cou
nt
on t
he
over
all
soci
al s
ecuri
ty
bu
dg
et.
No
t o
bse
rved
.
Th
ere
has
bee
n n
o p
ilo
t st
udy
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
69
To
im
pro
ve t
he
bu
sin
ess
envi
ron
men
t a
nd
en
ha
nce
com
pet
itio
n i
n o
pen
ma
rket
s
Reg
ula
ted
pro
fess
ion
s
In t
he
imp
lem
enta
tio
n o
f L
aw 3
91
9/2
01
1, an
y d
ecis
ion
to
rei
nst
ate
a re
stri
ctio
n c
on
sid
ers
the
nee
d t
o p
rom
ote
co
mp
etit
ion
and
tak
es i
nto
acc
ou
nt
inte
rnat
ional
bes
t p
ract
ice.
Th
e G
ov
ern
men
t co
nsu
lts
wid
ely
, an
d i
n p
arti
cula
r w
ith
th
e H
elle
nic
Co
mp
etit
ion C
om
mis
sio
n.
[no
t la
ter
than
en
d-Q
4 2
01
1]
On
goin
g.
As
of
mid
-Feb
ruar
y 2
01
2,
the
Min
istr
y o
f F
inan
ce r
ecei
ved
req
ues
ts f
or
der
og
atio
n o
f ch
apte
r A
of
law
39
19/2
01
1 f
or
53
pro
fess
ion
s. I
n g
ener
al,
the
Hel
lenic
Co
mp
etit
ion C
om
mis
sio
n
has
iss
ued
op
inio
ns
agai
nst
th
ose
req
ues
ts b
arri
ng
th
e ca
ses
of
i) m
anu
fact
uri
ng a
nd
mar
ket
ing o
f w
eap
on
s an
d e
xp
losi
ves
,
ii)
pri
vat
e p
rim
ary
an
d s
eco
nd
ary
sch
oo
ls,
iii)
tu
tori
ng
cen
tres
an
d l
ang
uag
e sc
ho
ols
,
iv)
vo
cati
onal
tra
inin
g i
nst
itu
tes,
v)
vo
cati
on
al t
rain
ing
cen
tres
,
vi)
po
st-s
eco
ndar
y e
du
cati
on c
entr
es,
vii
) li
ber
al a
rts
stu
dio
s w
her
e th
e m
ain
ten
ance
of
the
pri
or
auth
ori
zati
on
reg
ime
wer
e d
eem
ed t
o b
e w
arra
nte
d.
Th
e G
ov
ern
men
t re
pea
ls M
inis
teri
al D
ecis
ion 6
48/2
01
1 a
nd i
ssu
es a
new
Jo
int
Min
iste
rial
Dec
isio
n s
ign
ific
antl
y r
edu
cin
g
the
val
ue
of
a tr
ansa
ctio
n a
bo
ve
wh
ich
the
nota
ries
' pro
rata
fee
fo
r d
raft
ing
co
ntr
acts
is
the
max
imu
m p
erm
issi
ble
fee
. In
add
itio
n,
the
new
Min
iste
rial
Dec
isio
n d
efin
es p
ro r
ata
fee
s fo
r tr
ansa
ctio
ns
bel
ow
th
is m
axim
um
val
ue
at s
ucc
essi
vel
y
dec
reas
ing
rat
es i
n i
nver
se p
rop
ort
ion
to
the
gra
du
ated
in
crea
se, en
suri
ng
a s
har
p r
edu
ctio
n o
f th
e fe
es a
lrea
dy
ch
arg
ed. T
o
this
en
d,
the
new
min
iste
rial
dec
isio
n r
edu
ces
pro
rata
fee
s by
at
leas
t 3
0 p
erce
nt
in t
he
firs
t tw
o t
ran
ches
def
ined
in
Min
iste
rial
Dec
isio
n 6
48
/20
11
, w
ith
lar
ger
cu
ts i
n t
he
pro
rata
fee
s ap
pli
cable
to s
ub
seq
uen
t tr
anch
es.
The
new
Jo
int
Min
iste
rial
Dec
isio
n a
lso
lo
wer
s fe
es f
or
copie
s an
d f
or
addit
ional
pag
es.
[Q4
-20
11
]
Ob
serv
ed.
A j
oin
t m
inis
teri
al d
ecis
ion r
educe
d n
ota
ries
' fee
s by
27
% i
n t
he
firs
t tw
o t
ranch
es c
om
par
ed t
o t
he
20
11
dec
isio
n. It
als
o
red
uce
d f
ees
for
cop
ies
and
for
add
itio
nal
pag
es b
y E
UR
1ea
ch
and
pro
vid
ed t
hat
sta
rtin
g f
rom
EU
R 2
0 m
illi
on t
he
fee
def
ined
in t
he
dec
isio
n i
s th
e m
axim
um
fee
(co
mp
ared
to E
UR
30
mil
lio
n b
efo
re).
Fo
r th
e le
gal
pro
fess
ion
, th
e G
over
nm
ent
issu
es a
Pre
sid
enti
al D
ecre
e re
vis
ing
the
per
cen
tag
es a
ppli
cab
le t
o t
he
refe
ren
ce
amo
un
ts (
Art
icle
96
(2)
of
the
Cod
e o
f L
awy
ers,
as
amen
ded
), w
hic
h s
ets
pre
pai
d a
mounts
for
each
pro
ced
ura
l ac
t o
r co
urt
app
eara
nce
s (i
.e.,
it
sets
a s
yst
em o
f p
rep
aid
fix
ed/c
on
trac
t su
ms
for
each
pro
ced
ura
l ac
t o
r ap
pea
rance
by
a l
awy
er w
hic
h i
s
no
t li
nked
to
a s
pec
ific
‘re
fere
nce
am
ou
nt’
). [
Q4
-20
11
]
On
goin
g.
As
of
mid
-Feb
ruar
y 2
01
2 a
dra
ft P
resi
den
tial
Dec
ree
had
bee
n
pre
par
ed,
but
it n
eed
ed f
urt
her
ref
inem
ents
to
be
in l
ine
wit
h t
he
law
on
fai
r tr
ial
and
den
ial
of
just
ice
ado
pte
d b
y t
he
Hel
len
ic
Par
liam
ent
on
6 M
arch
20
12.
An
au
dit
is
lau
nch
ed t
o a
sses
s to
wh
at e
xte
nt
the
con
trib
uti
on
s o
f la
wy
ers
and e
ng
inee
rs t
o c
over
the
op
erat
ing c
ost
s o
f th
eir
pro
fess
ion
al a
sso
ciat
ion
s ar
e re
aso
nab
le,
pro
po
rtio
nat
e an
d j
ust
ifie
d. [Q
4-2
01
1]
Pa
rtia
lly
ob
serv
ed.
Th
e M
inis
try
of
Infr
astr
uct
ure
has
pro
vid
ed i
nfo
rmat
ion
to t
he
Co
mm
issi
on
ser
vic
es o
n t
he
pro
fit
and
lo
ss a
cco
un
t o
f th
e
Tec
hnic
al C
ham
ber
of
Gre
ece.
The
Min
istr
y o
f Ju
stic
e st
ill
has
to
pro
vid
e si
mil
ar i
nfo
rmat
ion
for
the
legal
pro
fess
ion.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
70
Th
e G
ov
ern
men
t p
ub
lish
es a
rep
ort
, by
mid
-No
vem
ber
20
11, on t
he
imple
men
tati
on o
f L
aw 3
919/2
011,
incl
udin
g:
1.
the
list
of
pro
fess
ion
s fa
llin
g u
nder
the
sco
pe
of
the
law
;
2.
the
list
of
pro
fess
ion
s ex
emp
ted f
rom
th
e li
ftin
g o
f re
stri
ctio
ns
by
Pre
siden
tial
Dec
ree
and
th
e ju
stif
icat
ion
s fo
r su
ch
exem
pti
on
s;
3.
an a
sses
smen
t on
wh
eth
er f
urt
her
mea
sure
s ar
e nee
ded
on
th
e ru
les
on
acc
ess
to, an
d e
xer
cise
of
the
pro
fess
ion,
and
on
pri
cin
g t
o a
lig
n G
reek
leg
isla
tion
wit
h E
U l
aw a
nd
co
mp
etit
ion r
ule
s;
4.
a ti
met
able
to
scr
een
ex
isti
ng l
egis
lati
on a
nd t
o a
do
pt
the
nec
essa
ry c
han
ges
to t
he
exis
tin
g s
pec
ific
reg
ula
tio
ns
of
the
pro
fess
ion
s (i
.e., P
resi
den
tial
Dec
rees
, M
inis
teri
al D
ecis
ion
s an
d C
ircu
lars
) to
mak
e th
em f
ull
y c
om
pat
ible
wit
h L
aw
39
19
/20
11
, E
U l
aw a
nd c
om
pet
itio
n r
ule
s.
Pa
rtly
ob
serv
ed.
Th
e th
ird a
nd
fou
rth
ele
men
ts h
ave
no
t b
een
co
mp
lied
wit
h.
Ch
ang
es t
o P
resi
den
tial
Dec
rees
, M
inis
teri
al D
ecis
ion
s an
d C
ircu
lars
fo
llo
win
g t
he
scre
enin
g o
f le
gis
lati
on a
re a
do
pte
d.
[Ma
rch
20
12
].
No
t ye
t a
ppli
cable
.
Mea
sure
s ar
e id
enti
fied
to e
nsu
re t
hat
pro
vid
ers
of
serv
ices
are
not
sub
ject
to
req
uir
emen
ts w
hic
h o
bli
ge
them
to e
xer
cise
a
giv
en s
pec
ific
act
ivit
y e
xcl
usi
vel
y,
or
wh
ich
res
tric
t th
e ex
erci
se j
oin
tly
or
in p
artn
ersh
ip o
f dif
fere
nt
acti
vit
ies,
ex
cep
t in
the
circ
um
stan
ces
and
un
der
th
e co
nd
itio
ns
set
in t
he
Ser
vic
es D
irec
tiv
e. [
Dec
emb
er 2
01
1]
No
t o
bse
rved
.
Th
e G
ov
ern
men
t id
enti
fies
mea
sure
s to
rem
ov
e co
mp
lete
pro
hib
itio
ns
on c
om
mer
cial
com
mu
nic
atio
ns
by
th
e re
gula
ted
pro
fess
ion
s an
d t
o e
nsu
re t
hat
pro
fess
ion
al r
ule
s on
co
mm
erci
al c
om
mu
nic
atio
ns
are
no
n-d
iscr
imin
ato
ry, ju
stif
ied
by
an
ov
erri
din
g r
easo
n r
elat
ing t
o t
he
pu
bli
c in
tere
st a
nd
pro
po
rtio
nat
e. [
Q4
-20
11
]
Pa
rtly
ob
serv
ed.
Th
e m
ain o
uts
tan
din
g c
ase
of
com
ple
te b
ans
on
ad
ver
tise
men
t
app
lied
to t
he
leg
al p
rofe
ssio
n (
nam
ely
, to
law
yer
s, l
aw f
irm
s
and
no
tari
es).
PD
95
/20
11
an
d A
rt.
6 o
f L
aw 4
03
8/2
01
2al
low
mo
re f
lex
ibil
ity
in t
he
com
mer
cial
co
mm
un
icat
ion
s o
f n
ota
ries
and
law
yer
s,
resp
ecti
vel
y.
How
ever
, la
w 4
03
8/2
01
2 k
eep
s a
com
ple
te b
an o
n
TV
, ra
dio
an
d b
illb
oar
ds,
wh
ich a
pp
ears
co
ntr
ary
to
Art
. 2
4 o
f
the
Ser
vic
es D
irec
tiv
e an
d t
o t
he
Eu
rop
ean
Co
urt
of
Just
ice
case
law
.
Th
e G
ov
ern
men
t id
enti
fies
mea
sure
s to
rei
nfo
rce
tran
spar
ency
in t
he
fun
ctio
nin
g o
f p
rofe
ssio
nal
bod
ies
by
req
uir
ing t
hem
to
pu
bli
sh a
n a
nn
ual
rep
ort
on t
hei
r w
ebp
age
reg
ardin
g t
hei
r fi
nan
cial
per
form
ance
and
sta
tist
ics
on d
isci
pli
nar
y a
ctio
ns
in
def
ence
of
con
sum
ers'
inte
rest
s. [
No
vem
ber
20
11]
Pa
rtly
ob
serv
ed
(obse
rved
only
fo
r th
e le
gal
pro
fess
ion)
Law
40
38
/20
12 p
rov
ides
fo
r th
e p
ub
lica
tio
n o
f th
e an
nual
acco
unts
of
the
bar
ass
oci
atio
ns
in G
reec
e as
wel
l as
of
agg
reg
ate
info
rmat
ion
on
dis
cipli
nar
y p
roce
du
res.
Th
e p
rin
ciple
of
tran
spar
ency
sh
ould
ho
wev
er,
be
app
lied
to a
ll
oth
er r
egu
late
d p
rofe
ssio
ns.
Th
e G
ov
ern
men
t m
on
ito
rs t
he
imp
lem
enta
tio
n o
f L
aw 3
91
9/2
01
1 a
nd
lau
nch
es a
stu
dy
on
ho
w e
ffec
tive
such
a l
aw i
s in
incr
easi
ng
co
mp
etit
ion
an
d r
edu
cin
g p
rice
s [O
ctob
er 2
01
1].
The
stu
dy
is
reg
ula
rly
up
dat
ed,
wit
h t
he
firs
t re
sult
s av
aila
ble
by
end
-Dec
emb
er 2
01
1.
If n
eces
sary
, ad
just
men
ts t
o t
he
law
wit
h t
he
aim
of
incr
easi
ng
co
mp
etit
ion a
re a
do
pte
d b
y M
arc
h
20
12.
Ob
serv
ed.
Th
e st
udy
is
bei
ng
car
ried
ou
t by
KE
PE
, a
Gre
ek t
hin
k-
tan
k.
An
in
teri
m r
epo
rt w
as c
om
ple
ted a
nd
pre
sente
d i
n D
ecem
ber
20
11
.
Th
e G
ov
ern
men
t p
rese
nts
th
e re
sult
s o
f sc
reen
ing o
f th
e re
gu
lati
on
s o
f th
e m
ain r
egu
late
d p
rofe
ssio
ns
to a
sses
s th
e
just
ific
atio
n a
nd t
he
pro
po
rtio
nal
ity
of
the
req
uir
emen
ts r
eser
vin
g c
erta
in a
ctiv
itie
s to
pro
vid
ers
wit
h s
pec
ific
pro
fess
ion
al
qual
ific
atio
ns.
[N
ov
emb
er 2
01
1]
No
t o
bse
rved
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
71
Th
e G
ov
ern
men
t p
rep
ares
act
s by
en
d-2
011,
to b
e ad
op
ted
by
Q1
-20
12
, at
th
e la
test
, in
ord
er t
o:
1.
abo
lish
pro
vis
ion
s o
f th
e re
gula
tio
ns
of
the
pro
fess
ion
al c
ham
ber
s o
n a
cces
s to
, an
d e
xer
cise
of,
the
pro
fess
ion
an
d o
n
pri
cin
g,
that
are
ag
ain
st L
aw 3
919
/20
11
an
d E
U l
aw i
ncl
ud
ing c
om
pet
itio
n r
ule
s;
No
t o
bse
rved
.
Th
ere
are
on
-goin
g d
iscu
ssio
ns
on s
pec
ific
pro
vis
ion
s o
f th
e
cod
e o
f la
wy
ers
reg
ard
ing m
inim
um
lev
els
of
rem
un
erat
ion
app
lica
ble
to
sal
arie
d l
awy
ers
and
on
are
as r
eser
ved
to t
he
leg
al
pro
fess
ion
.
2.
ensu
re t
hat
pro
vid
ers
of
serv
ices
are
not
subje
ct t
o r
equir
emen
ts w
hic
h o
bli
ge
them
to
exer
cise
a g
iven
sp
ecif
ic a
ctiv
ity
excl
usi
vel
y,
or
wh
ich
res
tric
t th
e ex
erci
se j
oin
tly
or
in p
artn
ersh
ip o
f dif
fere
nt
acti
vit
ies,
exce
pt
in t
he
circ
um
stan
ces
and
un
der
the
con
dit
ion
s se
t in
the
Ser
vic
es D
irec
tiv
e;
No
t o
bse
rved
.
(Th
is f
oll
ow
s fr
om
lac
k o
f co
mp
lian
ce w
ith t
he
iden
tifi
cati
on
of
rest
rict
ion
s to
mu
ltid
isci
pli
nar
y a
ctiv
itie
s re
ferr
ed t
o a
bo
ve)
3.
rem
ov
e co
mp
lete
pro
hib
itio
ns
on c
om
mer
cial
com
mu
nic
atio
ns
by
th
e re
gula
ted
pro
fess
ion
s an
d t
o e
nsu
re t
hat
pro
fess
ional
rule
s on c
om
mer
cial
com
munic
atio
ns
are
no
n-d
iscr
imin
ato
ry, ju
stif
ied
by
an
over
ridin
g r
easo
n r
elat
ing
to
the
pu
bli
c in
tere
st a
nd
pro
port
ion
ate;
Pa
rtly
ob
serv
ed
Ob
serv
ed f
or
the
legal
pro
fess
ion (
i.e.
, nota
ries
, la
wy
ers
and l
aw
firm
s).
4.
rein
forc
e tr
ansp
aren
cy i
n t
he
fun
ctio
nin
g o
f p
rofe
ssio
nal
bo
die
s;
Ob
serv
ed
for
the
legal
pro
fess
ion (
i.e.
, la
wy
ers)
.
No
t o
bse
rved
for
oth
er p
rofe
ssio
ns.
.
5.
set
up
co
ntr
ibu
tio
ns
of
law
yer
s an
d e
ng
inee
rs t
o t
hei
r p
rofe
ssio
nal
ass
oci
atio
ns
that
ref
lect
th
e o
per
atin
g c
ost
s o
f th
e
serv
ices
pro
vid
ed b
y t
ho
se a
sso
ciat
ion
s. T
hes
e co
ntr
ibu
tio
ns
are
pai
d p
erio
dic
ally
an
d a
re n
ot
lin
ked
to
pri
ces
char
ged
by
pro
fess
ion
s;
No
t o
bse
rved
.
6.
sim
pli
fy t
he
requ
irem
ents
res
ervin
g c
erta
in a
ctiv
itie
s to
the
leg
al a
nd
en
gin
eeri
ng
pro
fess
ion
s th
at a
re n
ot
just
ifie
d o
r
pro
po
rtio
nat
e;
No
t o
bse
rved
. T
o d
ate,
dis
cuss
ions
hav
e o
nly
sta
rted
wit
h t
he
Min
istr
y o
f Ju
stic
e re
gar
din
g c
erta
in r
eser
ved
act
ivit
ies
in
fav
ou
r o
f G
reek
law
yer
s co
ver
ing
med
iati
on
an
d m
and
ato
ry
pre
sen
ce i
n c
on
trac
ts w
her
e n
ota
ries
' par
tici
pat
ion
are
als
o
req
uir
ed.
7.
amen
d A
rtic
le 6
of
Law
39
19
/201
1 t
o p
rovid
e fo
r th
e fr
eedom
of
inco
rpora
tion o
f la
w f
irm
s an
d t
he
free
do
m t
o t
he
op
enin
g o
f b
ranch
es i
nsi
de
Gre
ece.
O
bse
rved
.
8.
abo
lish
Art
icle
7.1
b)
of
Law
39
19
/20
11
, re
gar
din
g t
he
po
wer
s o
f th
e T
ech
nic
al C
ham
ber
of
Gre
ece
to m
onit
or
and t
o
op
en d
isci
pli
nar
y p
roce
edin
gs
for
un
usu
ally
lo
w f
ees.
O
bse
rved
.
9.
tack
le a
ny
oth
er i
ssu
es i
den
tifi
ed i
n t
he
asse
ssm
ent
of
the
imple
men
tati
on o
f L
aw 3
919/2
011.
Th
e G
ov
ern
men
t re
qu
ests
th
e H
elle
nic
Co
mp
etit
ion
Co
mm
issi
on
to
iss
ue
an o
pin
ion o
f th
e p
rop
ose
d a
cts.
[Q
4-2
01
1]
Ob
serv
ed.
Rec
og
nit
ion o
f pro
fess
ion
al
qu
ali
fica
tio
ns
All
the
nec
essa
ry m
easu
res
are
tak
en t
o e
nsu
re t
he
effe
ctiv
e im
ple
men
tati
on o
f E
U r
ule
s o
n t
he
reco
gn
itio
n o
f p
rofe
ssio
nal
qu
alif
icat
ion
s, i
ncl
ud
ing c
om
pli
ance
wit
h E
CJ
ruli
ng
s (i
nte
r a
lia,
rela
ted
to
fra
nch
ised
dip
lom
as).
The
Gover
nm
ent:
- u
pd
ates
the
info
rmat
ion
on
th
e n
um
ber
of
pen
din
g a
ppli
cati
ons
for
the
reco
gnit
ion
of
pro
fess
ional
qual
ific
atio
ns,
an
d s
end
s
it t
o t
he
Co
mm
issi
on
; [O
ctob
er 2
011]
- p
rese
nts
dra
ft l
egis
lati
on
by
Oct
ob
er 2
011, to
be
ado
pte
d b
y e
nd
-yea
r, i
n o
rder
to
rem
ov
e th
e p
roh
ibit
ion t
o r
ecog
nis
e th
e
pro
fess
ion
al q
ual
ific
atio
ns
der
ived
fro
m f
ran
chis
ed d
egre
es.
Ho
lder
s o
f fr
anch
ised
deg
rees
fro
m o
ther
Mem
ber
Sta
tes
should
hav
e th
e ri
gh
t to
wo
rk i
n G
reec
e u
nd
er t
he
sam
e co
nd
itio
ns
as h
old
ers
of
Gre
ek d
egre
es.
Pa
rtia
lly
ob
serv
ed
Info
rmat
ion
on t
he
nu
mb
er o
f p
end
ing
ap
pli
cati
on
s fo
r
reco
gn
itio
n o
f p
rofe
ssio
nal
qual
ific
atio
ns
was
tra
nsm
itte
d t
o t
he
Co
mm
issi
on
in
Dec
emb
er 2
01
1.
Th
e d
raft
leg
isla
tio
n p
rovid
ing
for
the
reco
gn
itio
n o
f fr
anch
ised
dip
lom
as f
or
pro
fess
ion
al i
s p
endin
g.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
72
Ser
vice
s D
irec
tive
Th
e G
ov
ern
men
t co
mp
lete
s th
e ad
op
tio
n o
f ch
anges
to
ex
isti
ng s
ecto
ral
legis
lati
on
in
key
ser
vic
es s
ecto
rs s
uch
as
reta
il (
e.g
.
op
en a
ir m
ark
ets
and
outd
oo
r tr
ade)
, w
ho
lesa
le (
e.g
. ce
ntr
al m
ark
ets)
, ag
ricu
ltu
re (
e.g
. v
eter
inar
y s
erv
ices
), e
mp
loy
men
t
(em
plo
ym
ent
agen
cies
), a
nd
tec
hn
ical
ser
vic
es.
Th
e G
ov
ern
men
t al
so a
do
pts
chan
ges
to
th
e re
mai
nin
g s
ecto
ral
regu
lati
on,
ensu
rin
g f
ull
com
pli
ance
wit
h t
he
dir
ecti
ve.
Reg
ula
tio
ns
shou
ld:
"fa
cili
tate
th
e es
tab
lish
men
t by
:
!ab
oli
shin
g o
r am
end
ing
req
uir
emen
ts w
hic
h a
re p
roh
ibit
ed b
y t
he
Ser
vic
es D
irec
tiv
e;
!ab
oli
shin
g o
r am
end
ing
un
just
ifie
d a
nd
dis
pro
po
rtio
nat
e re
qu
irem
ents
, in
clu
din
g t
ho
se r
elat
ing t
o q
uan
tita
tiv
e an
d t
erri
tori
al
rest
rict
ion
s, l
egal
fo
rm r
equir
emen
ts,
shar
ehold
ing
req
uir
emen
ts,
fix
ed m
inim
um
and/o
r m
axim
um
tar
iffs
and r
estr
icti
ons
to
mu
ltid
isci
pli
nar
y a
ctiv
itie
s.
"fa
cili
tate
th
e p
rov
isio
n o
f cr
oss
-bo
rder
ser
vic
es, so
that
pro
vid
ers
of
cross
-bord
er s
ervic
es a
re r
equir
ed t
o c
om
ply
wit
h
spec
ific
req
uir
emen
ts o
f th
e G
reek
leg
isla
tio
n o
nly
in e
xce
pti
on
al c
ases
(w
hen
adm
itte
d b
y A
rtic
les
16
or
17
of
the
Ser
vic
es
Dir
ecti
ve)
.
"p
rov
ide
leg
al c
erta
inty
fo
r p
rovid
ers
of
cro
ss-b
ord
er s
erv
ices
by
set
tin
g o
ut
in t
he
resp
ecti
ve
(sec
tora
l) l
egis
lati
on w
hic
h
req
uir
emen
ts c
an,
and w
hic
h r
equ
irem
ents
can
not,
be
app
lied
to
cro
ss-b
ord
er s
erv
ices
. [Q
4-2
01
1]
Ess
enti
all
y o
bse
rved
.
Sin
ce t
he
pre
vio
us
rev
iew
th
ere
has
bee
n g
oo
d p
rog
ress
in
the
ado
pti
on o
f se
cto
ral
leg
isla
tio
n d
eriv
ing f
rom
th
e
imp
lem
enta
tio
n o
f th
e se
rvic
es d
irec
tiv
e. T
her
e is
ho
wev
er
pen
din
g l
egis
lati
on i
n t
he
fiel
d o
f em
plo
ym
ent
(to r
emo
ve
inte
r
ali
a, m
inim
um
fee
s in
em
plo
ym
ent
agen
cies
) an
d o
n t
ech
nic
al
pro
fess
ion
s (i
.e., a
ser
ies
of
Pre
sid
enti
al D
ecre
es s
imp
lify
ing t
he
acce
ss a
nd
ex
erci
se o
f a
nu
mb
er o
f te
chn
ical
pro
fess
ion
s su
ch a
s
elec
tric
ian
s, p
lum
ber
s, m
ach
ine
oper
ato
rs,
etc.
).
Th
e G
ov
ern
men
t en
sure
s:
"th
at t
he
po
int
of
sin
gle
co
nta
ct (
PS
C)
is f
ull
y o
per
atio
nal
in a
ll s
ecto
rs c
ov
ered
by
th
e S
erv
ices
Dir
ecti
ve;
"th
at t
he
PS
C d
isti
ng
uis
hes
bet
wee
n p
roce
du
res
app
lica
ble
to s
ervic
e p
rov
ider
s es
tab
lish
ed i
n G
reec
e an
d t
ho
se a
ppli
cab
le t
o
cro
ss-b
ord
er p
rov
ider
s (i
n p
arti
cula
r fo
r th
e re
gu
late
d p
rofe
ssio
ns)
;
"th
at t
her
e is#a
deq
uat
e co
nn
ecti
on
bet
wee
n t
he
PS
C a
nd
oth
er r
elev
ant
auth
ori
ties
(in
clu
din
g o
ne-
sto
p s
ho
ps,
pro
fess
ion
al
asso
ciat
ion
s an
d t
he
reco
gn
itio
n o
f p
rofe
ssio
nal
qual
ific
atio
ns)
. [Q
4-2
011]
On
goin
g.
Sin
ce t
he
last
rev
iew
ther
e h
as a
lso
bee
n g
ood
pro
gre
ss t
ow
ard
s
the
com
ple
tio
n o
f th
e P
oin
t o
f S
ing
le C
onta
ct (
PS
C).
Ho
wev
er,
the
Gre
ek P
SC
nee
ds
to i
mp
rov
e to
incr
ease
the
info
rmat
ion
avai
lab
le i
n E
ngli
sh a
s w
ell
as t
he
nu
mb
er o
f p
roce
du
res
that
can
be
com
ple
ted
on
line.
It
has
bee
n e
stim
ated
that
in
30
% o
f
the
case
s, t
he
PS
C p
rov
ides
in
form
atio
n o
nly
an
d i
n a
lmo
st 2
0%
of
the
pro
cedure
s, t
he
PS
C d
oes
not
pro
vid
e an
y i
nfo
rmat
ion (
or
acce
ss t
o t
he
elec
tro
nic
co
mp
leti
on
of
pro
ced
ure
s) a
t al
l.
Sec
tora
l g
row
th d
rive
rs
Th
e G
ov
ern
men
t p
ub
lish
es r
epo
rts
anal
ysi
ng:
- th
e p
ote
nti
al c
on
trib
uti
on o
f th
e to
uri
sm s
ecto
r to
gro
wth
an
d j
ob
s. I
n a
n A
ctio
n P
lan
, th
e G
ov
ern
men
t id
enti
fies
leg
isla
tive,
adm
inis
trat
ive
and
oth
er o
bst
acle
s h
ind
erin
g c
om
pet
itio
n a
nd m
ark
et e
ntr
y t
o t
he
real
isat
ion
of
sect
or
pote
nti
al;
[No
vem
ber
20
11
]
- th
e p
ote
nti
al c
on
trib
uti
on o
f th
e re
tail
sec
tor
to p
rice
fle
xib
ilit
y,
gro
wth
an
d j
ob
s. I
t sh
ou
ld i
den
tify
leg
isla
tiv
e,
adm
inis
trat
ive
and
oth
er o
bst
acle
s h
ind
erin
g c
om
pet
itio
n a
nd m
ark
et e
ntr
y t
o t
he
real
isat
ion
of
sect
or
pote
nti
al. [N
ov
emb
er
20
11
]
No
t o
bse
rved
(to
uri
sm)
Pa
rtly
ob
serv
ed (
reta
il).
Th
e M
inis
try
of
Dev
elo
pm
ent,
Co
mp
etit
iven
ess
and
Sh
ipp
ing
(MD
CS
) su
bm
itte
d i
n D
ecem
ber
20
11
a l
ist
of
acti
on
s ta
ken
or
to b
e ta
ken
in
res
po
nse
to
the
study
on
ret
ail
carr
ied
ou
t by
McK
inse
y.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
73
Th
e nec
essa
ry l
egal
act
s an
d o
ther
str
uct
ura
l ac
tion
s ar
e ad
op
ted
[Q
4-2
01
1]
to i
mp
lem
ent
the
fin
din
gs
of
thes
e re
port
s.
Ob
serv
ed (
reta
il).
As
of
Feb
ruar
y 2
01
2,
leg
isla
tio
n h
ad b
een
ad
op
ted
to
lif
t
con
stra
ints
on
the
sale
by
oth
er r
etai
lers
of
curr
entl
y r
estr
icte
d
pro
du
ct c
ateg
ori
es,
such
as
bab
y m
ilk
. T
her
e w
as a
lso
dra
ft
leg
isla
tio
n r
eady
i)
to a
llo
w t
he
sale
of
bak
e o
ff b
read
th
rou
gh
reta
iler
s oth
er t
han
bak
erie
s; i
i) t
o s
imp
lify
the
syst
em o
f
sub
mis
sio
n o
f w
ho
lesa
le a
nd r
etai
l p
rice
lis
ts,
cost
ele
men
ts a
nd
con
trac
ts t
o t
he
Min
istr
y o
f C
om
pet
itiv
enes
s.
Th
e G
ov
ern
men
t in
itia
tes
add
itio
nal
stu
die
s o
n m
anu
fact
uri
ng,
ener
gy
, an
d w
ho
lesa
le s
ecto
rs w
ith a
vie
w t
o r
emo
vin
g
rem
ain
ing
ob
stac
les
to g
row
th i
n t
hes
e se
cto
rs.
On
th
e b
asis
of
thes
e st
ud
ies,
the
Go
ver
nm
ent
pre
par
es c
oncr
ete
acti
ons
and a
tim
etab
le f
or
imp
lem
enta
tio
n [
Ma
rch
20
12].
No
t ye
t a
ppli
cable
Busi
nes
s en
viro
nm
ent
Th
e G
ov
ern
men
t p
ub
lish
es a
pla
n [
Oct
ob
er 2
01
1]
for
a "B
usi
nes
s-F
rien
dly
Gre
ece"
tac
kli
ng 3
0 r
emai
nin
g r
estr
icti
on
s to
busi
nes
s ac
tivit
ies,
inves
tmen
t an
d i
nn
ov
atio
n.
Th
e p
lan
id
enti
fies
hu
rdle
s to
in
nov
atio
n a
nd e
ntr
epre
neu
rsh
ip -
ran
gin
g f
rom
com
pan
y c
reat
ion
to
co
mp
any
liq
uid
atio
n -
an
d p
rese
nts
the
corr
esp
on
din
g c
orr
ecti
ve
acti
on
s. T
he
pla
n i
ncl
udes
mea
sure
s,
among o
ther
s, i
n o
rder
to:
"si
mp
lify
an
d r
edu
ce c
ost
s li
nk
ed t
o c
om
pan
y p
ub
lica
tio
n r
equ
irem
ents
;
"co
mp
lete
th
e se
ttin
g-u
p o
f th
e G
ener
al C
om
mer
cial
Reg
istr
y (
GE
MI)
by
pro
mp
tly
tak
ing
mea
sure
s su
ch a
s th
e tr
ainin
g o
f
OS
S a
nd
GE
MI
use
rs,
the
com
ple
tio
n o
f th
e G
EM
I d
atab
ase,
the
furt
her
dev
elo
pm
ent
of
web
ser
vic
es a
nd
use
of
elec
tro
nic
sig
nat
ure
s, t
he
inte
rco
nnec
tio
n o
f G
EM
I to
the
Cham
ber
's i
nfo
rmat
ion
sy
stem
s an
d t
o t
he
PS
C, in
ord
er t
o e
nsu
re a
cces
s to
on
lin
e co
mp
leti
on
of
pro
ced
ure
s b
oth
fo
r co
mp
any
fo
rmat
ion a
nd
fo
r an
y a
dm
inis
trat
ive
pro
ced
ure
s n
eces
sary
fo
r th
e
exer
cise
of
thei
r ac
tiv
itie
s;
"si
mp
lify
lo
cati
on
, en
vir
on
men
tal,
bu
ildin
g a
nd
op
erat
ing
per
mit
s;
"el
imin
ate
dis
tort
ion
s in
fu
el d
istr
ibu
tio
n;
"d
evel
op
a "
sin
gle
ele
ctro
nic
win
do
w"
cen
tral
izin
g s
tan
dar
diz
ed t
rad
e-re
late
d i
nfo
rmat
ion
an
d s
imp
lify
ing t
he
nu
mb
er o
f
do
cum
ents
nee
ded
to e
xp
ort
;
"ad
dre
ss r
estr
icti
on
s in
th
e tr
ansp
ort
sec
tor,
incl
ud
ing
the
tran
spo
rt o
f em
pty
co
nta
iner
s an
d o
f n
on
-haz
ard
ou
s w
aste
;
"#r
edu
ce t
he
com
ple
xit
y o
f th
e C
od
e o
f B
oo
ks
and
Rec
ord
s an
d p
rov
ide
clar
ity
on
all
cat
ego
ries
of
no
n-d
edu
cted
ex
pen
ses.
Pa
rtia
lly
ob
serv
ed.
Alt
ho
ug
h a
dra
ft p
lan e
xis
ts,
it h
as n
ot
yet
bee
n p
ub
lish
ed.
Th
e G
ov
ern
men
t co
ncl
ud
es t
he
scre
enin
g o
f M
inis
teri
al D
ecis
ion A
2-3
39
1/2
00
9 o
n m
arket
reg
ula
tio
ns,
as
wel
l as
any
oth
er
rela
ted
reg
ula
tion
s. T
he
scre
enin
g i
s ca
rrie
d o
ut,
in
co
op
erat
ion w
ith
the
Hel
lenic
Co
mp
etit
ion C
om
mis
sio
n,
wit
h a
vie
w t
o
iden
tify
ing
ad
min
istr
ativ
e b
urd
ens
and
un
nec
essa
ry b
arri
ers
to c
om
pet
itio
n t
o b
e el
imin
ated
, an
d d
evel
op
ing a
lter
nat
ive,
les
s
rest
rict
ive,
poli
cies
to
ach
iev
e g
ov
ernm
ent
obje
ctiv
es.
A d
raft
pro
posa
l o
f m
arket
reg
ula
tio
n i
s re
ady
by [
end
-Dec
emb
er
20
11
].
On
go
ing
.
Th
e M
inis
try
of
Dev
elo
pm
ent
Com
pet
itiv
enes
s an
d S
hip
pin
g i
s
exp
ecte
d t
o i
ssu
e in
Ap
ril
20
12
a n
ew M
inis
teri
al D
ecis
ion o
n
mar
ket
reg
ula
tion
s to
rep
lace
Min
iste
rial
Dec
isio
n A
2-
33
91
/20
09
. D
raft
sec
tio
ns
of
the
new
dec
isio
n o
n m
arket
reg
ula
tio
ns
–co
ver
ing
fre
sh f
oo
ds,
mea
t an
d f
ish
– a
re t
reat
ed a
s
a p
ilo
t an
d a
re e
xp
ecte
d t
o b
e av
aila
ble
fo
r dis
cuss
ion
in
Mar
ch
20
12
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
74
A c
om
pre
hen
sive
list
of
no
n-r
ecip
roca
tin
g c
har
ges
in
fav
ou
r o
f th
ird
par
ties
is
pre
sen
ted,
iden
tify
ing
ben
efic
iari
es a
nd
qu
anti
fies
co
ntr
ibu
tio
ns
pai
d b
y c
on
sum
ers
in f
avo
ur
of
tho
se b
enef
icia
ries
. [O
cto
ber
20
11
]
Ob
serv
ed.
Th
e M
inis
try
of
Fin
ance
su
bm
itte
d a
co
mp
rehen
siv
e li
st o
f n
on
-
reci
pro
cati
ng
char
ges
to t
he
Co
mm
issi
on
ser
vic
es i
n N
ov
emb
er
20
11
. T
he
list
has
to
be
furt
her
ref
ined
to
quan
tify
th
e
con
trib
uti
on
s an
d t
o b
ette
r id
enti
fy b
enef
icia
ries
.
Th
e G
ov
ern
men
t re
vie
ws
and
co
dif
ies
the
legis
lati
ve
fram
ewo
rk o
f ex
po
rts
(i.e
., L
aw 9
36/7
9 a
nd L
aw O
rder
3999/5
9),
sim
pli
fies
the
pro
cess
to
cle
ar c
ust
om
s fo
r ex
po
rts
and
im
po
rts
and
giv
es l
arger
com
pan
ies
or
ind
ust
rial
are
as t
he
po
ssib
ilit
y
to b
e ce
rtif
ied t
o c
lear
car
go
fo
r th
e cu
sto
ms
them
selv
es. T
he
ob
ligat
ion o
f re
gis
trat
ion
wit
h t
he
expo
rter
s’ r
egis
try
of
the
Ch
amb
er o
f C
om
mer
ce i
s ab
oli
shed
. [D
ecem
ber
20
11
], w
hil
e th
e e-
cust
om
s sy
stem
is
full
y o
per
atio
nal
. [J
un
e 2
012
]
On
go
ing
.
As
of
Feb
ruar
y 2
01
2,
the
Go
ver
nm
ent
had
su
bm
itte
d t
o
Par
liam
ent
dra
ft l
egis
lati
on r
epla
cin
g L
aw 9
36/7
9 a
nd
Law
Ord
er 3
99
9/5
9 a
nd
ab
oli
shin
g t
he
nee
d t
o r
egis
ter
wit
h t
he
exp
ort
ers’
reg
istr
y o
f th
e C
ham
ber
of
Co
mm
erce
.
Reg
ard
ing t
he
sim
pli
fica
tio
n o
f cu
sto
ms'
pro
ced
ure
s, t
he
Min
istr
y o
f F
inan
ce i
ssued
a M
inis
teri
al D
ecis
ion a
llo
win
g t
he
exp
ort
er t
o g
et a
n a
uth
ori
zati
on t
o e
xp
ort
wit
ho
ut
pri
or
sub
mis
sio
n o
f cu
sto
m d
ecla
rati
ons
and
wit
ho
ut
pre
sen
tati
on
of
the
go
od
s to
th
e cu
sto
ms
pre
mis
es.
An
oth
er D
ecis
ion
pro
vid
es
for
a si
mp
lifi
ed i
mp
ort
cle
aran
ce p
roce
du
re a
nd f
or
clea
rin
g t
he
go
od
s in
the
imp
ort
er's
pre
mis
es. T
he
sim
pli
fied
pro
ced
ure
s ar
e
tho
se i
n C
om
mu
nit
y C
ust
om
s' r
egu
lati
on
s.
In o
rder
to
hel
p a
ttra
ct i
nves
tmen
t in
key
sec
tors
, th
e G
ov
ern
men
t sp
eeds
up t
he
rev
iew
of
pro
ject
ap
pli
cati
on
s in
the
pip
elin
e
of
the
pro
cedure
for
larg
e in
ves
tmen
ts f
or
at l
east
th
ree
larg
e in
ves
tmen
t p
roje
cts
by
en
d-N
ov
emb
er 2
01
1, w
ith
tw
o m
ore
pro
ject
s o
ne
mo
nth
lat
er.
Ob
serv
ed.
Th
e in
term
inis
teri
al c
om
mit
tee
for
stra
teg
ic i
nves
tmen
t
app
rov
ed t
he
incl
usi
on
in t
he
pro
ced
ure
s of
fast
-tra
ck t
hre
e
inv
estm
ent
pro
ject
s in
ren
ewab
le e
ner
gy
.
Fo
ur
pro
ject
s h
ave
com
ple
ted t
hei
r el
ectr
onic
su
bm
issi
on
in
stra
tegic
in
ves
tmen
t.
Th
e D
ecre
es n
eces
sary
fo
r th
e im
ple
men
tati
on
of
the
law
on f
ast-
trac
k l
icen
sin
g p
roce
du
re f
or
man
ufa
ctu
rin
g a
ctiv
itie
s an
d
busi
nes
s par
ks
are
imple
men
ted. [O
cto
ber
20
11
]
On
goin
g.
As
of
mid
-Feb
ruar
y 2
01
2,
thre
e im
ple
men
tin
g r
egu
lati
on
s
der
ivin
g f
rom
this
law
hav
e b
een i
ssu
ed.
Th
e m
ajo
rity
of
the
imp
lem
enti
ng d
ecis
ion
s is
, n
on
eth
eles
s,
pen
din
g.
Th
e G
ov
ern
men
t ac
cele
rate
s [Q
4-2
01
1]
the
com
ple
tio
n o
f th
e la
nd r
egis
try
, w
ith
a v
iew
to:
"te
nd
erin
g c
adas
tral
pro
ject
s fo
r ad
dit
ional
4 m
illi
on
rig
hts
by
Dec
emb
er 2
01
1;
"d
igit
alis
ing
th
e o
per
atio
ns
of
all
mo
rtg
age
and n
ota
ries
' off
ices
and
co
nv
eyin
g a
ll n
ewly
reg
iste
red d
eed
s to
th
e ca
das
tre
by
20
15
;
"ex
clusi
vel
y-o
per
atin
g c
adas
tral
off
ices
fo
r la
rge
urb
an c
entr
es b
y 2
01
5;
"es
tab
lish
ing a
co
mp
lete
cad
astr
al r
egis
ter
and
excl
usi
vel
y o
per
atin
g c
adas
tral
off
ices
nat
ion
wid
e by
20
20
.
Ob
serv
ed.
7 m
illi
on r
igh
ts w
ere
ten
der
ed i
n D
ecem
ber
20
11.
A M
inis
teri
al D
ecis
ion
on m
ark
et r
egu
lati
on
s is
iss
ued
fo
llo
win
g t
he
scre
enin
g l
aun
ched
in
Q2
-20
11
. [Q
4-2
01
1]
On
go
ing
.
See
co
mm
ent
abo
ve
on
th
e sc
reen
ing
of
Min
iste
rial
Dec
isio
n o
n
mar
ket
reg
ula
tion
s.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
75
An e
x p
ost
im
pac
t as
sess
men
t is
pre
sen
ted i
n o
rder
to e
val
uat
e L
aw 3
85
3/2
01
0 o
n t
he
sim
pli
fica
tion
of
pro
ced
ure
s fo
r th
e
esta
bli
shm
ent
of
com
pan
ies
in t
erm
s of
savin
gs
in t
ime
and
co
st t
o s
et u
p a
bu
sin
ess,
as
wel
l as
to
ver
ify
th
at a
ll s
eco
nd
ary
leg
isla
tio
n i
s in
fo
rce.
[Q
1-2
01
2]
No
t ye
t a
ppli
cable
Tra
nsp
ort
Lib
eral
isat
ion
of
tou
rist
coac
hes
is
imm
edia
tely
eff
ecti
ve
afte
r pas
sin
g l
egis
lati
on
in e
arly
Au
gu
st 2
01
1.
Sec
on
dar
y l
egis
lati
on
esta
bli
shin
g t
he
cost
s an
d t
he
tim
e re
quir
ed f
or
issu
ing
new
lic
ence
s is
ad
op
ted
by
en
d-O
ctob
er 2
011.
Su
ch c
ost
s w
ill
no
t
exce
ed t
he
adm
inis
trat
ive
cost
s an
d t
he
req
uir
ed t
imin
g w
ill
no
t ex
ceed
20
bu
sines
s d
ays
in t
ota
l.
Ob
serv
ed.
Th
e G
ov
ern
men
t su
bm
its
a p
oli
cy p
aper
, in
dic
atin
g h
ow
all
reg
ional
air
po
rts
wil
l be
mer
ged
in
to g
rou
ps
ensu
rin
g t
hat
reg
ion
al a
irp
ort
s b
eco
me
eco
no
mic
ally
via
ble
in
co
mp
lian
ce w
ith s
tate
-aid
rule
s, i
ncl
ud
ing r
eali
stic
pro
ject
ion
s id
enti
fied
by
the
app
oin
ted
fin
anci
al a
dv
iso
rs. [Q
4-2
01
1]
Aft
er e
nsu
rin
g t
hat
reg
ion
al a
irp
ort
s ar
e ec
on
om
ical
ly v
iab
le, th
e G
over
nm
ent
lau
nch
es a
n e
ffec
tive
tran
sact
ion s
trat
egy
lea
din
g t
o t
hei
r p
rivat
isat
ion
. [Q
1-2
01
2]
On
go
ing
wit
h d
elay
.
Th
e P
rivat
isat
ion
Fu
nd
is
pre
par
ing t
he
poli
cy p
aper
.
A r
epo
rt i
s su
bm
itte
d o
n t
he
fun
ctio
nin
g o
f th
e re
gu
lar
pas
sen
ger
tra
nsp
ort
ser
vic
es (
KT
EL
), p
rese
nti
ng
op
tio
ns
for
lib
eral
isat
ion
. [Q
4-2
01
1]
On
go
ing
wit
h d
elay
.
Co
nsu
ltan
ts w
ork
ing
on
th
e re
port
. F
inal
res
ult
s ex
pec
ted
to b
e
read
y b
y M
arch
20
12
.
Th
e tr
ansi
tio
nal
per
iod
est
abli
shed
in
Law
38
87/2
01
0 f
or
the
red
uct
ion i
n c
ost
s fo
r is
suin
g n
ew r
oad
tra
nsp
ort
op
erat
or
lice
nce
s is
bro
ugh
t to
an e
nd o
n 1
Jan
uar
y 2
01
2.
Th
e n
eces
sary
sec
on
dar
y l
egis
lati
on
as
fore
seen
in
th
at l
aw (
Art
icle
14
(11
))
is a
do
pte
d,
spec
ify
ing t
he
cost
for
issu
ing
new
road
tra
nsp
ort
oper
ato
r li
cen
ces.
This
co
st i
s tr
ansp
aren
t, o
bje
ctiv
ely
cal
cula
ted
in r
elat
ion
to
the
nu
mb
er o
f veh
icle
s o
f th
e ro
ad t
ran
spo
rt o
per
ato
r an
d d
oes
not
exce
ed t
he
rele
van
t ad
min
istr
ativ
e co
st.
[Q4
-
20
11
]
Ob
serv
ed.
In l
ine
wit
h t
he
po
licy
ob
ject
ives
of
Law
39
19
/201
1 o
n r
egula
ted p
rofe
ssio
ns,
the
Go
ver
nm
ent
rem
ov
es e
ntr
y b
arri
ers
to t
he
tax
is m
ark
et (
in p
arti
cula
r, r
estr
icti
on
s o
n t
he
num
ber
of
lice
nce
s an
d p
rice
of
new
lic
ence
s), in
lin
e w
ith i
nte
rnat
ion
al b
est
pra
ctic
e. [
Q4
-201
1]
No
t o
bse
rved
.
Dra
ft l
aw i
s st
ill
un
der
dis
cuss
ion.
En
erg
y
Th
e G
ov
ern
men
t fi
nal
ises
the
rem
edie
s to
en
sure
th
e ac
cess
of
thir
d-p
arti
es t
o l
ignit
e-fi
red
ele
ctri
city
gen
erat
ion
. [O
cto
ber
20
11
] N
ot
ob
serv
ed.
Th
e G
ov
ern
men
t en
sure
s th
at n
etw
ork
act
ivit
ies
are
effe
ctiv
ely
unb
un
dle
d f
rom
sup
ply
act
ivit
ies.
In p
arti
cula
r, f
or
elec
tric
ity
:
- al
l th
e nec
essa
ry t
ran
sfer
s o
f st
aff
and a
sset
s o
f th
e tr
ansm
issi
on
sy
stem
op
erat
or
(TS
O)
are
com
ple
ted;
the
TS
O
man
agem
ent,
it
sup
erv
iso
ry b
ody
an
d t
he
com
pli
ance
off
icer
are
ap
po
inte
d i
n a
ccord
ance
wit
h t
he
Ele
ctri
city
Dir
ecti
ve
2009/7
2/E
C;
[Q4-2
011]
- al
l nec
essa
ry t
ran
sfer
s o
f st
aff
and
ass
ets
to t
he
leg
ally
un
bu
nd
led
dis
trib
uti
on
sy
stem
op
erat
or
(DS
O)
are
com
ple
ted
; [Q
1-
20
12
]
- th
e u
nb
un
dle
d T
SO
is
cert
ifie
d b
y t
he
Gre
ek e
ner
gy
reg
ula
tor.
[Q
2-2
012
]
On
goin
g.
Th
e Q
4-2
01
1 d
ead
line
for
the
tran
sfer
of
asse
ts a
nd
per
son
nel
to
the
un
bu
ndle
d T
SO
was
par
tly
co
mp
lied
wit
h b
y t
he
end
of
20
11
, b
ut
is l
ikel
y t
o b
e co
mp
lied
fu
lly
in Q
1-2
01
2.
It i
s al
so l
ikel
y t
hat
th
e Q
1-2
01
2 d
ead
lin
e fo
r th
e
imp
lem
enta
tio
n o
f th
e D
SO
un
bu
nd
lin
g w
ill
be
obse
rved
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
76
Fo
r g
as:
- o
wn
ersh
ip u
nbu
nd
lin
g i
s im
ple
men
ted
as
fore
seen
in t
he
Gre
ek e
ner
gy
law
. [Q
1-2
01
2]
No
t o
bse
rved
.
In D
ecem
ber
201
1 t
he
Gre
ek a
uth
ori
ties
in
tro
duce
d a
n
amen
dm
ent
to L
aw 4
00
1/2
01
1 o
n t
he
op
erat
ion o
f g
as a
nd
elec
tric
ity
mar
ket
s as
wel
l as
the
exp
lora
tio
n a
nd
pro
du
ctio
n o
f
hy
dro
carb
on
s, t
o a
llo
w f
or
the
imple
men
tati
on o
f th
e IT
O-
mo
del
fo
r th
e gas
TS
O,
DE
SF
A. T
his
all
ow
s al
so f
or
DE
PA
an
d
DE
SF
A t
o b
e so
ld a
s a
ver
tica
lly
in
teg
rate
d c
om
pan
y (
as
op
po
sed
to
sel
ling
bo
th c
om
pan
ies
sep
arat
ely
, w
hic
h w
as t
he
po
licy
ori
gin
ally
pro
vid
ed f
or
in t
he
ener
gy
law
, in
ten
tio
nal
ly
neg
oti
ated
wit
h t
he
Gre
ek a
uth
ori
ties
an
d i
ncl
uded
in
th
e
pre
vio
us
updat
e of
the
MoU
). O
wner
ship
unbundli
ng s
till
rem
ain
s an
op
tion
fo
r th
e u
nb
un
dli
ng
of
the
gas
TS
O.
- t
he
un
bu
ndle
d T
SO
is
cert
ifie
d b
y t
he
Gre
ek e
ner
gy
reg
ula
tor.
[Q
2-2
01
2]
N
ot
yet
ap
pli
cable
.
Th
e G
ov
ern
men
t st
arts
im
ple
men
tin
g t
he
mea
sure
s en
suri
ng
the
acce
ss b
y t
hir
d p
arti
es t
o l
ign
ite-
fire
d e
lect
rici
ty g
ener
atio
n.
[Q4
-20
11
]
No
t o
bse
rved
.
Th
is f
oll
ow
s fr
om
th
e la
ck o
f co
mpli
ance
wit
h t
he
dea
dli
ne
to
fin
aliz
e th
e re
med
ies
to g
rant
acce
ss t
o 4
0%
of
lign
ite
fire
d
cap
acit
y i
n G
reec
e to
co
mp
etit
ors
of
PP
C.
Det
aile
d p
lan
s ar
e p
rese
nte
d f
or
ensu
rin
g a
max
imu
m m
ark
et o
pen
ing
as
reg
ard
s th
e n
on
-inte
rconnec
ted s
yst
em,
cover
ing
among o
ther
s, a
cces
s of
suppli
ers
to t
he
no
n-
inte
rco
nn
ecte
d s
yst
em m
ark
ets
in p
arti
cula
r in
Rhodes
and C
rete
. T
he
Go
ver
nm
ent
sub
mit
s a
req
ues
t fo
r d
ero
gat
ion u
nder
cer
tain
co
nd
itio
ns
of
Art
icle
44 o
f D
irec
tiv
e 2
009
/72
fo
r sm
all
iso
late
d
syst
ems.
[Q
4-2
01
1]
Pa
rtia
lly
ob
serv
ed.
Gre
ece
has
su
bm
itte
d i
n J
anuar
y 2
01
2 a
req
ues
t fo
r der
og
atio
n
for
the
no
n-i
nte
rco
nn
ecte
d i
slan
ds
to t
he
Co
mm
issi
on
.
Ho
wev
er, th
e co
de
for
ensu
ring m
axim
um
mar
ket
open
ing o
n
the
no
n-i
nte
rco
nn
ecte
d i
slan
ds
has
no
t y
et b
een
ad
op
ted
.
Leg
isla
tio
n i
s ad
op
ted
to
aw
ard
th
e hy
dro
res
erves
man
agem
ent
to a
n i
nd
epen
den
t b
ody
. [Q
4-2
01
1]
No
t o
bse
rved
.
Fo
llo
win
g a
nn
oun
cem
ents
of
the
Gre
ek m
inis
try
of
env
iro
nm
ent,
the
Min
istr
y o
f E
ner
gy
is
con
sider
ing
th
e o
pti
on
of
sell
ing
lig
nit
e p
lan
ts w
ith
hyd
ro p
lants
in t
he
con
tex
t o
f th
e
pri
vat
izat
ion
of
PP
C.
Dep
end
ing o
n h
ow
it
is i
mp
lem
ente
d,
this
mea
sure
co
uld
hel
p t
o s
olv
e th
e la
ck o
f co
mp
etit
ion
on
the
gen
erat
ion s
ide
of
the
elec
tric
ity
mar
ket
, w
her
e to
dat
e P
PC
kee
ps
pri
vil
eged
acc
ess
to b
oth
ener
gy
so
urc
es, an
d h
ence
, an
un
fair
ad
van
tag
e o
ver
oth
er e
lect
rici
ty p
roduce
rs t
hat
rel
y
excl
usi
vel
y o
n g
as a
nd
ren
ewab
les,
wh
ich a
re r
elat
ivel
y m
ore
expen
sive.
This
mea
sure
could
als
o b
e an
alt
ern
ativ
e so
luti
on
to
awar
din
g t
he
man
agem
ent
of
hy
dro
res
erves
to a
n i
nd
epen
den
t
bo
dy
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
77
Th
e G
ov
ern
men
t re
mo
ves
reg
ula
ted
tar
iffs
fo
r cu
sto
mer
s ex
cep
t ho
use
ho
lds
and
sm
all
ente
rpri
ses
(as
def
ined
in
the
seco
nd
and
thir
d e
ner
gy
lib
eral
isat
ion
pac
kag
es).
[Q
4-2
01
1]
Ob
serv
ed.
A M
inis
teri
al D
ecre
e w
as i
ssu
ed i
n J
anu
ary
20
12
wh
ich
der
egu
late
s m
ediu
m v
olt
age
con
sum
ers.
Fu
rth
er m
easu
res
are
ado
pte
d t
o e
nsu
re t
hat
th
e en
ergy
co
mp
on
ent
of
reg
ula
ted t
arif
fs f
or
ho
use
hold
s an
d s
mal
l en
terp
rise
s
refl
ects
, at
the
late
st b
y J
une
20
13
, w
ho
lesa
le m
ark
et p
rice
s, e
xce
pt
for
vuln
erab
le c
on
sum
ers.
[Q
4-2
01
1]
On
go
ing
.
Oo
ther
mea
sure
s h
ave
bee
n u
nder
tak
en t
o b
rin
g t
he
rem
ainin
g
reg
ula
ted
cu
stom
ers
(lo
w-v
olt
age
cust
om
ers,
i.e
. m
ain
ly
ho
use
ho
lds
and
sm
all
bu
sin
esse
s) c
lose
r to
th
e m
ark
et p
rice
.
Reg
ula
ted
pri
ces
wer
e in
crea
sed b
y 3
% a
t th
e beg
innin
g o
f
20
12
.
Th
e G
over
nm
ent
com
ple
tes
the
imple
men
tati
on o
f th
e m
easu
res
to e
nsu
re a
cces
s by
co
mp
etit
ors
of
PP
C t
o l
ign
ite-
fire
d
elec
tric
ity
gen
erat
ion.
Thir
d p
arti
es c
an e
ffec
tiv
ely
use
lig
nit
e-fi
red
gen
erat
ion i
n t
he
Gre
ek m
ark
et. [Q
2-2
01
2]
No
t ye
t a
ppli
cable
.
R&
D a
nd
in
no
vati
on
Th
e G
ov
ern
men
t p
urs
ues
an u
p-t
o-d
ate
and i
n-d
epth
eval
uat
ion o
f al
l R
&D
an
d o
ng
oin
g i
nn
ovat
ion a
ctio
ns,
in
clu
din
g i
n
var
iou
s o
per
atio
nal
pro
gra
mm
es w
ith
thei
r co
sts
and b
enef
its.
It
pre
sents
a s
trat
egic
act
ion p
lan f
or
poli
cies
aim
ed a
t
enh
anci
ng
the
qu
alit
y a
nd t
he
syn
erg
ies
bet
wee
n p
ub
lic
and p
riv
ate
R&
D a
nd
in
nov
atio
n,
as w
ell
as t
erti
ary
ed
uca
tio
n.
This
acti
on
pla
n i
den
tifi
es a
cle
ar t
imet
able
for
rele
van
t m
easu
res
to b
e ta
ken
, ta
kin
g t
he
budget
ary
im
pac
t in
to a
ccount
and
har
mo
nis
ing
th
ese
acti
on
s w
ith
oth
er r
elev
ant
init
iati
ves
in t
hes
e ar
eas,
in
par
ticu
lar
the
inves
tmen
t la
w. [F
ebru
ary
2012]
On
goin
g.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
78
Bet
ter
reg
ula
tion
Th
e G
ov
ern
men
t ta
ble
s le
gis
lati
on
[N
ov
emb
er 2
01
1]
to i
mp
rov
e re
gu
lato
ry g
over
nan
ce c
over
ing,
in p
arti
cula
r:
"th
e p
rinci
ple
s of
bet
ter
reg
ula
tion
;
"th
e o
bli
gat
ion
s o
f th
e re
gula
tor
for
the
fulf
ilm
ent
of
tho
se p
rin
cip
les;
"th
e to
ols
of
bet
ter
reg
ula
tio
n,
incl
ud
ing
the
cod
ific
atio
n,
reca
st,
con
soli
dat
ion,
rep
eal
of
ob
sole
te l
egis
lati
on,
sim
pli
fica
tio
n
of
legis
lati
on
, sc
reen
ing o
f th
e en
tire
bo
dy
of
exis
tin
g r
egula
tio
n, ex
-an
te a
nd e
x-post
im
pac
t as
sess
men
ts a
nd p
ubli
c
con
sult
atio
n p
roce
sses
;
"th
e tr
ansp
osi
tion
an
d i
mp
lem
enta
tion o
f E
U l
aw a
nd
excl
usi
on o
f g
old
pla
tin
g;
"th
e se
ttin
g-u
p o
f b
ette
r re
gu
lati
on
str
uct
ure
s in
eac
h m
inis
try
as
wel
l as
the
crea
tion
of
a C
entr
al B
ette
r R
egula
tio
n u
nit
;
"th
e re
quir
emen
t th
at d
raft
law
s an
d t
he
mo
st i
mp
ort
ant
dra
ft l
egis
lati
ve
acts
(P
resi
den
tial
Dec
rees
an
d M
inis
teri
al D
ecis
ion
s)
are
acco
mp
anie
d b
y a
n i
mp
lem
enta
tio
n t
imet
able
;
"el
ectr
onic
acc
ess
to a
dir
ecto
ry o
f ex
isti
ng
leg
isla
tio
n a
nd a
n a
nnu
al p
rog
ress
rep
ort
on
Bet
ter
Reg
ula
tio
n.
On i
mpac
t as
sess
men
ts,
legis
lati
on p
rovid
es t
hat
:
"im
ple
men
tin
g l
egis
lati
on
wit
h p
ote
nti
ally
lar
ge
signif
ican
t im
pac
t is
als
o s
ub
ject
to
th
e re
quir
emen
t to
pro
du
ce a
n i
mp
act
asse
ssm
ent;
"im
pac
t as
sess
men
ts a
dd
ress
th
e co
mp
etit
iven
ess
and
oth
er e
con
om
ic e
ffec
ts o
f le
gis
lati
on b
y m
akin
g u
se o
f th
e C
om
mis
sio
n
Imp
act
Ass
essm
ent
guid
elin
es a
nd
th
e O
EC
D C
om
pet
itio
n A
sses
smen
t to
olk
it;
"th
e C
entr
al B
ette
r R
egu
lati
on U
nit
can
see
k t
he
op
inio
n o
f o
ther
min
iste
rial
dep
artm
ents
an
d i
nd
epen
den
t au
thori
ties
fo
r
reg
ula
tio
ns
that
fal
l u
nd
er t
hei
r re
spec
tive
com
pet
ence
s so
as
to i
mp
rov
e th
e q
ual
ity
of
imp
act
asse
ssm
ent;
"#
an i
ndep
enden
t au
tho
rity
an
d t
he
Cen
tral
Bet
ter
Reg
ula
tion U
nit
car
ry o
ut
qual
ity
chec
ks
of
impac
t as
sess
men
ts.
"#
the
Cen
tral
Bet
ter
Reg
ula
tio
n U
nit
co
nsu
lts
the
Hel
len
ic C
om
pet
itio
n C
om
mis
sio
n w
hen
fo
rmu
lati
ng
an
d d
raft
ing
the
guid
elin
es t
o b
e im
ple
men
ted b
y t
he
min
istr
ies'
bet
ter
reg
ula
tio
n u
nit
s;
"#
impac
t as
sess
men
ts a
re p
ubli
shed
.
On
goin
g.
A d
raft
law
has
bee
n t
able
d i
n P
arli
amen
t; i
t la
rgel
y c
om
pli
es
wit
h t
he
Mo
U c
rite
ria.
Th
e G
ov
ern
men
t id
enti
fies
pri
ori
ty a
reas
to c
odif
y a
nd
sim
pli
fy e
xis
tin
g l
egis
lati
on
wit
hin
the
bet
ter
reg
ula
tio
n a
gen
da.
[Dec
emb
er 2
011
]
On
ad
min
istr
ativ
e b
urd
en r
educt
ion
, th
e G
over
nm
ent
subm
its
a li
st o
f 1
3 s
elec
ted
pri
ori
ty a
reas
to t
he
Eu
ropea
n C
om
mis
sio
n
that
wil
l b
e su
bje
ct t
o m
easu
rem
ent.
It
also
set
s dea
dli
nes
fo
r th
e co
mp
leti
on o
f m
easu
rem
ents
in
eac
h a
rea,
fo
r th
e
iden
tifi
cati
on o
f p
rop
osa
ls t
o r
edu
ce b
urd
ens
and f
or
the
amen
dm
ent
of
the
regula
tions.
This
poli
cy i
nit
iati
ve
sho
uld
red
uce
adm
inis
trat
ive
bu
rden
s by
25 p
erce
nt
(co
mp
ared
wit
h t
he
bas
elin
e y
ear
20
08
) in
the
13
pri
ori
ty a
reas
. [D
ecem
ber
2011]
No
t o
bse
rved
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
79
To
ra
ise
the
ab
sorp
tio
n r
ate
s o
f st
ruct
ura
l a
nd
co
hes
ion
fu
nd
s
The
Gover
nm
ent
mee
ts t
arget
s fo
r pay
men
t cl
aim
s an
d m
ajo
r p
roje
cts
in t
he
abso
rpti
on
of
EU
str
uct
ura
l an
d c
ohes
ion
fu
nd
s
set
do
wn
in t
he
tab
le.
Co
mp
lian
ce w
ith t
he
targ
ets
shal
l be
mea
sure
d b
y c
erti
fied
dat
a.
Ob
serv
ed.
Th
e g
over
nm
ent
has
met
th
e an
nu
al t
arget
for
the
subm
issi
on o
f
15
lar
ge
pro
ject
s. M
ore
over
, p
aym
ent
clai
ms
of
appro
xim
atel
y
EU
R 3
30
1 m
illi
on
wer
e d
ecla
red
to
th
e C
om
mis
sio
n i
n 2
01
1
agai
nst
th
e an
nual
tar
get
of
EU
R 3
35
0 m
illi
on,
imp
lyin
g t
hat
ov
eral
l co
mp
lian
ce s
too
d a
t 9
8.6
% o
f th
e an
nu
al t
arg
et.
By
ty
pe
of
fun
d, th
e E
uro
pea
n R
egio
nal
Dev
elo
pm
ent
Fu
nd
(ER
DF
)/C
oh
esio
n F
un
d t
arget
of
EU
R 2
.6 b
illi
on
was
ex
ceed
ed
by
4.5
% (
wit
h p
aym
ent
clai
ms
of
aro
un
d E
UR
2 7
18
mil
lio
n),
wh
erea
s E
uro
pea
n S
oci
al F
und (
ES
F)
pay
men
t cl
aim
s
(am
ou
nti
ng
to a
to
tal
of
EU
R 5
83
.8 m
illi
on
) w
ere
at 7
8%
of
the
ann
ual
tar
get
.
In m
eeti
ng a
bso
rpti
on
rat
e ta
rget
s, r
eco
urs
e to
no
n-t
arg
eted
sta
te a
id m
easu
res
is g
rad
ual
ly r
educe
d.
The
Go
ver
nm
ent
pro
vid
es d
ata
on e
xp
endit
ure
fo
r ta
rget
ed a
nd
no
n-t
arg
eted
de
min
imis
sta
te a
id m
easu
res
co-f
inan
ced
by
th
e st
ruct
ura
l fu
nd
s
in 2
01
0 [
Oct
ob
er 2
01
1]
and
in
20
11
[Q
4-2
01
1].
No
t o
bse
rved
.
Dat
a o
n n
on
-tar
get
ed d
e m
inim
is s
tate
aid
fo
r 20
11
hav
e n
ot
bee
n p
rovid
ed.
Leg
isla
tio
n i
s ad
op
ted
, an
d i
mm
edia
tely
im
ple
men
ted
, to
sh
ort
en d
ead
lin
es a
nd s
imp
lify
pro
ced
ure
s o
n c
ontr
act
awar
d a
nd
lan
d e
xp
rop
riat
ion
s, i
ncl
ud
ing t
he
dea
dli
nes
nee
ded
fo
r th
e re
lev
ant
leg
al p
roce
edin
gs.
[Q
4-2
01
1]
No
t o
bse
rved
.
Th
e G
ov
ern
men
t ea
rmar
ks
app
rop
riat
e am
ou
nts
to
:
"co
mp
lete
unfi
nis
hed
pro
ject
s in
clu
ded
in t
he
200
0-0
6 o
per
atio
nal
pro
gra
mm
e cl
osu
re d
ocu
men
tati
on
(ca
. E
UR
260
mil
lio
n),
as w
ell
as a
n a
ppro
pri
ate
amo
un
t fo
r th
e re
st o
f th
e im
ple
men
tati
on
an
d c
losu
re o
f th
e 2
00
0-0
6 c
ohes
ion
-fu
nd
pro
ject
s;
"to
co
ver
th
e re
qu
ired
nat
ional
co
ntr
ibu
tio
n,
incl
ud
ing
no
n-e
lig
ible
ex
pen
dit
ure
(i.
e. l
and a
cqu
isit
ion
s) i
n t
he
fram
ewo
rk o
f
the
20
07
-13 o
per
atio
nal
pro
gra
mm
es.
[Q4
-20
11
]
On
goin
g.
Th
e G
ov
ern
men
t id
enti
fies
EU
R 5
00
mil
lio
n f
rom
ER
DF
wit
hin
th
e 2
00
7-1
3 o
per
atio
nal
pro
gra
mm
es f
or
the
crea
tio
n o
f a
gu
aran
tee
fun
d f
or
smal
l an
d m
ediu
m-s
ized
ente
rpri
ses.
[Q
1-2
01
2]
O
bse
rved
.
Th
e G
ov
ern
men
t la
unch
es a
web
-bas
ed m
on
ito
ring
to
ol
of
pro
cedu
res
for
the
app
rov
al o
f p
roje
ct p
rop
osa
ls a
nd f
or
the
imp
lem
enta
tio
n o
f p
ub
lic
pro
ject
s, [
Oct
ob
er 2
011
], w
hic
h s
ho
uld
be
full
y o
per
atio
nal
by
en
d-2
011.
Ob
serv
ed.
Th
e m
anag
eria
l ca
pac
ity
of
all
man
agin
g a
uth
ori
ties
an
d i
nte
rmed
iate
bo
die
s o
f o
per
atio
nal
pro
gra
mm
es u
nd
er t
he
fram
ewo
rk
of
the
Nat
ional
Str
ateg
ic R
efer
ence
Fra
mew
ork
20
07
-13
is
cert
ifie
d a
cco
rdin
g t
o t
he
stan
dar
d I
SO
90
01
:20
08
(q
ual
ity
man
agem
ent)
. [Q
4-2
01
1]
La
rgel
y o
bse
rved
.
Th
e G
ov
ern
men
t p
rov
ides
an
im
pac
t as
sess
men
t of
mea
sure
s si
nce
20
10
, in
ord
er t
o a
ccel
erat
e th
e ab
sorp
tio
n o
f st
ruct
ura
l
and
co
hes
ion
fun
ds
ado
pte
d s
ince
May
20
10,
and i
t in
dic
ates
any
ad
dit
ional
mea
sure
s. [
Q4-2
01
1]
Ob
serv
ed.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
80
Wit
h t
he
aim
of
acce
lera
tin
g t
he
abso
rpti
on
of
EU
fin
anci
ng
an
d i
n o
rder
to a
dap
t it
self
to t
he
incr
ease
in
th
e E
U c
o-f
inan
cin
g
rate
s, t
he
Go
ver
nm
ent
wil
l, b
y D
ecem
ber
20
11:
- es
tabli
sh p
rio
rity
pro
ject
s p
er o
per
atio
nal
pro
gra
mm
e, i
ncl
ud
ing,
wh
ere
app
rop
riat
e m
ajo
r pro
ject
s, w
hic
h w
ill
hav
e a
sig
nif
ican
t im
pac
t o
n c
ohes
ion
, gro
wth
an
d e
mp
loy
men
t, a
nd
thei
r re
spec
tiv
e es
tim
ated
all
oca
tio
n. T
hes
e p
roje
cts
sho
uld
be
op
erat
ion
al b
y 2
01
5;
[Dec
emb
er 2
01
1]
- ac
tiv
ate
or
elim
inat
e sl
eep
ing p
roje
cts
(i.e
. p
roje
cts
alre
ady
ap
pro
ved
in t
he
op
erat
ional
pro
gra
mm
es b
ut
no
t y
et c
on
trac
ted
wit
hin
the
tim
efra
mes
as
def
ined
at
the
nat
ion
al l
evel
). F
or
tho
se p
roje
cts
wh
ich a
re r
etai
ned
, it
in
dic
ates
wh
ich c
ond
itio
ns
mu
st b
e m
et i
n o
rder
that
th
e co
-fin
anci
ng
is
up
hel
d;
[Dec
emb
er 2
011] #
- cr
eate
a c
entr
al d
atab
ase
mo
nit
ori
ng
com
pen
sati
on a
nd t
he
tim
e el
apse
d f
or
the
com
ple
tio
n o
f ex
pro
pri
atio
ns
incu
rred
in t
he
fram
ewo
rk o
f th
e im
ple
men
tati
on
of
pro
ject
s co
-fin
ance
d b
y t
he
ER
DF
an
d t
he
Co
hes
ion
Fu
nd
; [Q
1-2
01
2]
- si
mp
lify
tas
ks
rela
tin
g t
o p
roje
ct i
mp
lem
enta
tio
n b
y m
app
ing
res
po
nsi
bil
itie
s an
d r
emo
vin
g u
nn
eces
sary
ste
ps
in a
cco
rdan
ce
wit
h t
he
man
agem
ent
and c
on
trol
syst
ems
wh
ile
also
co
nso
lidat
ing m
anag
emen
t ca
pac
itie
s w
her
e ap
pro
pri
ate
(e.g
. w
aste
trea
tmen
t). [Q
2-2
01
2]
Ob
serv
ed (
for
the
pro
pri
ety
pro
ject
s)
On
goin
g (
for
the
iden
tifi
cati
on o
f sl
eepin
g p
roje
cts)
No
t ye
t a
ppli
cable
.
To u
pgra
de
the
edu
cati
on
sys
tem
Th
e G
ov
ern
men
t p
rep
ares
, an
d s
tart
s im
ple
men
ting
, an
act
ion p
lan f
or
the
imp
rov
emen
t o
f th
e ef
fect
iven
ess
and
eff
icie
ncy
of
the
edu
cati
on s
yst
em,
takin
g i
nto
acc
ount
the
mea
sure
s re
com
men
ded
by
the
ind
epen
den
t ta
sk f
orc
e's
rep
ort
. [e
nd
-Oct
ob
er
20
11
]
Pa
rtia
lly
ob
serv
ed.
Th
e ac
tio
n p
lan n
eed
s im
pro
vin
g.
Bas
ed o
n t
he
reco
mm
end
atio
ns
of
the
blu
epri
nt
and
th
e ac
tio
n p
lan
, th
e ex
isti
ng l
egal
/in
stit
uti
on
al f
ram
ewo
rk f
or
pri
mar
y,
seco
nd
ary
an
d t
erti
ary
ed
uca
tio
n w
ill
be
amen
ded
wit
h a
vie
w t
o i
ncr
easi
ng t
he
effi
cien
cy a
nd
eff
ecti
ven
ess
of
the
edu
cati
on
syst
em. T
he
Go
ver
nm
ent
star
ts p
ub
lish
ing
a b
i-an
nu
al p
rog
ress
rep
ort
on t
he
imple
men
tati
on o
f th
e la
w o
n q
ual
ity
ass
ura
nce
in H
igh
er E
duca
tio
n. [Q
4-2
01
1]
On
go
ing
wit
h d
elay
.
Leg
al f
ram
ewo
rk s
till
un
der
pre
par
atio
n.
Th
e new
ter
tiar
y e
du
cati
on f
ram
ewo
rk l
aw, ai
med
at
red
uci
ng
ex
cess
ive
cost
s an
d a
t im
pro
vin
g i
ts o
ver
all
effi
cien
cy a
nd
effe
ctiv
enes
s, i
s im
ple
men
ted
. [Q
2-2
01
2].
N
ot
yet
ap
pli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
81
To r
eform
th
e ju
dic
ial
syst
em
In o
rder
to
im
pro
ve
the
funct
ionin
g o
f th
e ju
dic
ial
syst
em,
wh
ich i
s es
sen
tial
for
the
pro
per
an
d f
air
fun
ctio
nin
g o
f th
e
eco
no
my
, an
d w
ith
ou
t pre
judic
e to
the
con
stit
uti
on
al p
rin
ciple
s an
d t
he
indep
end
ence
of
just
ice,
the
Go
ver
nm
ent:
(i)
ensu
res
effe
ctiv
e an
d t
imel
y e
nfo
rcem
ent
of
contr
acts
, co
mp
etit
ion
ru
les
and
ju
dic
ial
dec
isio
ns;
(ii)
in
crea
ses
effi
cien
cy b
y b
road
enin
g t
he
skil
ls' b
ase
of
sen
ior
jud
ges
to
wh
om
co
urt
man
agem
ent
task
s h
ave
bee
n
assi
gn
ed;
(iii
) sp
eed
s u
p t
he
syst
em b
y e
lim
inat
ing
bac
klo
g o
f co
urt
s ca
ses
and
by
fac
ilit
atin
g o
ut-
of-
cou
rt s
ettl
emen
t
mec
han
ism
s.
Sp
ecif
ical
ly,
the
Go
ver
nm
ent:
- la
un
ches
[O
cto
ber
20
11
], j
oin
tly
wit
h a
n e
xte
rnal
bo
dy
of
exp
erts
, a
stu
dy
of
the
bac
klo
g o
f n
on
-tax
cas
es i
n c
ou
rts.
Th
e st
udy
incl
udes
th
e S
up
rem
e C
ou
rt a
nd t
he
Sup
rem
e A
dm
inis
trat
ive
Co
urt
, w
ith d
ata
avai
lab
le b
y e
nd
-Ma
rch
20
12 a
nd t
he
anal
ysi
s by
en
d-J
un
e 2012.
- p
uts
in
pla
ce i
mp
lem
enti
ng r
ule
s fo
r L
aw 3
89
8/2
01
0 o
n m
edia
tion
in
civ
il a
nd
com
mer
cial
mat
ters
; [O
cto
ber
20
11
]
- id
enti
fies
do
rman
t ca
ses,
i.e
. ca
ses
pen
din
g b
efo
re t
he
civ
il c
ou
rts
in w
hic
h t
he
rele
van
t co
urt
’s f
ile
reco
rds
that
they
hav
e bee
n p
ost
po
ned
or
nev
er r
ecei
ved
a h
eari
ng d
ate
and n
o p
arty
act
ivit
y f
or
rece
ivin
g a
hea
rin
g d
ate
has
tak
en
pla
ce f
or
at l
east
18 m
onth
s; [
Oct
ob
er-2
01
1]
Ob
serv
ed.
Th
e ex
tern
al b
ody
of
exper
ts h
as b
een
ap
po
inte
d a
nd
th
e st
udy
is o
ng
oin
g.
Th
e fo
llo
win
g i
mp
lem
enti
ng
ru
les
hav
e b
een
ad
op
ted
:
Pre
sid
enti
al D
ecre
e N
o 1
23
/20
11 o
f 9 D
ecem
ber
20
11
an
d
Dec
isio
ns
No
109
08
7 a
nd
10
90
88
of
the
Min
istr
y o
f Ju
stic
e,
Tra
nsp
aren
cy a
nd
Hu
man
Rig
hts
dat
ed 1
2 D
ecem
ber
20
11
.
Th
e jo
int
min
iste
rial
dec
isio
ns
un
der
Art
icle
s 5
(3),
6(2
), 6
(3)
and
9(2
) o
f L
aw 3
89
8/2
01
0 a
nd t
he
dec
isio
ns
of
the
Min
istr
y o
f
Just
ice,
Tra
nsp
aren
cy a
nd
Hu
man
Rig
hts
un
der
Art
icle
s 6
(5)
and
12
(3)
of
Law
38
98
/20
10
are
pen
din
g.
Reg
ula
r re
po
rtin
g o
f d
orm
ant
case
s w
ill
be
req
ues
ted
sta
rtin
g
fro
m e
nd
-Ju
ne
20
12
.
Th
e G
ov
ern
men
t p
rese
nts
a w
ork
ing
pla
n f
or
the
clea
ran
ce o
f th
e bac
klo
g o
f ta
x c
ases
in
all
ad
min
istr
ativ
e tr
ibu
nal
s an
d
adm
inis
trat
ive
cou
rts
of
appea
l by
th
e en
d o
f Ju
ly 2
01
3,
wh
ich
pro
vid
es f
or
inte
rmed
iate
tar
get
s fo
r re
du
cin
g t
he
bac
klo
g b
y
at l
east
15
per
cen
t by
Dec
emb
er 2
011
, 5
0 p
erce
nt
by
Ju
ly 2
012 a
nd
80
per
cent
by
Dec
emb
er 2
012;
[Q4
-20
11
]
Ob
serv
ed.
Th
e G
ov
ern
men
t m
et t
he
15 p
erce
nt
red
uct
ion
tar
get
on t
he
bas
is o
f it
s in
terp
reta
tio
n o
f b
acklo
g c
lear
ance
th
at i
t eq
uat
es
wit
h t
he
fixin
g o
f a
hea
rin
g d
ate.
In
par
ticu
lar,
a h
eari
ng d
ate
was
fix
ed u
nti
l 31
Dec
emb
er 2
011
fo
r 2
4 7
80
ou
t o
f 1
56
86
2
case
s th
at w
ere
pen
din
g o
n 3
1 A
ugust
2011 a
t fi
rst
inst
ance
lev
el,
and
3 2
60
ou
t o
f 8 5
90
cas
es t
hat
wer
e pen
din
g a
t ap
pea
l
lev
el.
Th
e G
ov
ern
men
t p
rep
ares
a w
ork
ing
pla
n f
or
the
use
of
e-re
gis
trat
ion
, e-
trac
kin
g o
f th
e st
atu
s o
f in
div
idu
al c
ases
in a
ll c
ou
rts
of
the
cou
ntr
y,
and
fo
r e-
fili
ng
. T
he
wo
rk p
lan
in
clu
des
dea
dli
ne
for
the
eval
uat
ion a
nd
co
mple
tio
n o
f cu
rren
t pil
ot
pro
ject
s
(e.g
. e-
fili
ng)
and
th
eir
exte
nsi
on t
o a
ll c
ou
rts.
The
pla
n [
Q4
-20
11]
env
isag
es t
hat
e-r
egis
trat
ion,
and
e-t
rack
ing
is
exte
nd
ed t
o
all
cou
rts
by
en
d-2
01
3;
Pa
rtly
ob
serv
ed a
nd
on
go
ing.
A t
ech
nic
ally
det
aile
d w
ork
pla
n h
as b
een s
ub
mit
ted
pre
senti
ng
the
curr
ent
stat
e o
f af
fair
s. H
ow
ever
, th
e fo
rwar
d-l
oo
kin
g p
art
of
the
pla
n w
ith d
eadli
nes
for
the
eval
uat
ion/c
om
ple
tio
n/e
xte
nsi
on
of
curr
ent
pil
ot
pro
ject
s (e
.g.
e-
fili
ng
) is
mis
sin
g.
Ther
e is
no i
nfo
rmat
ion
co
nce
rnin
g t
he
exte
nsi
on o
f e-
reg
istr
atio
n a
nd e
-tra
ckin
g t
o a
ll c
ou
rts
by
en
d-
20
13
.
Th
e G
ov
ern
men
t im
pro
ves
alt
ernat
ive
dis
pu
te r
eso
luti
on
fo
r o
ut-
of-
cou
rt s
ettl
emen
t an
d a
ctiv
ely
pro
mo
tes
pre
-tri
al
con
cili
atio
n,
med
iati
on,
and
arb
itra
tio
n,
wit
h a
vie
w t
o e
nsu
rin
g t
hat
a s
ign
ific
ant
amo
un
t o
f ci
tize
ns
and
bu
sin
esse
s m
ake
use
of
the
new
leg
al f
ram
ewo
rk f
or
med
iati
on
; [Q
4-2
01
1]
Ob
serv
ed.
Th
e M
inis
try
of
Just
ice
has
sta
rted
pro
mo
tin
g a
lter
nat
ive
dis
pu
te r
eso
luti
on
, es
pec
iall
y m
edia
tio
n,
in c
lose
co
op
erat
ion
wit
h c
ham
ber
s of
com
mer
ce.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
82
Th
e G
ov
ern
men
t p
rod
uce
s an
ev
alu
atio
n o
r im
pac
t as
sess
men
t o
f ex
isti
ng
an
d r
equ
ired
ad
dit
ional
eff
icie
ncy
mea
sure
s (s
uch
as t
he
fast
-lan
e pro
ced
ure
at
the
Ath
ens
Co
urt
of
Fir
st I
nst
ance
) in
ord
er t
o r
edu
ce t
he
pro
cess
ing
tim
e o
f ca
ses,
in
clu
din
g
furt
her
sim
pli
fyin
g c
ase
regis
trat
ion
, fu
rther
rat
ional
izin
g d
ock
et m
anag
emen
t w
ith a
vie
w t
o a
llo
win
g t
he
reso
luti
on o
f
do
cket
ed c
ases
, an
d p
rov
idin
g i
ncr
ease
d c
om
pu
ter
sup
po
rt t
o j
ud
ges
in
ord
er t
o a
llo
w t
he
issu
ance
of
wri
tten
dec
isio
ns
in a
ll
cou
rts
wit
hin
tw
o w
eek
s fr
om
the
jud
ge
tak
ing t
he
dec
isio
n;
[Q4
-20
11
]
On
goin
g.
Th
e M
inis
try
of
Just
ice
is o
f th
e v
iew
that
th
e ex
pla
nat
ory
mem
ora
ndum
of
the
law
addre
ssin
g i
ssu
es o
f fa
ir t
rial
an
d
den
ial
of
just
ice
wo
uld
su
ffic
e to
mee
t th
is r
equir
emen
t. T
he
req
uir
ed e
val
uat
ion
/im
pac
t as
sess
men
t is
ex
pec
ted t
o b
e
avai
lab
le s
ho
rtly
.
Th
e G
ov
ern
men
t ta
kes
the
nec
essa
ry m
easu
res
in o
rder
to b
e ab
le t
o p
ub
lish
quar
terl
y r
epo
rts
on
rec
ov
ery
rat
es b
y b
aili
ffs
and
no
tari
es,
du
rati
on a
nd c
ost
s of
corp
ora
te i
nso
lven
cy c
ases
an
d t
ax c
ases
. F
or
the
pu
rpo
ses
of
this
Mem
ora
nd
um
,
‘rec
ov
ery
rat
e’ r
efer
s to
the
rati
o o
f th
e am
ou
nt
coll
ecte
d b
y t
he
cred
ito
r in
en
forc
emen
t p
roce
edin
gs
-fo
llo
win
g t
he
issu
ance
of
an e
nfo
rcea
ble
tit
le-
to t
he
amo
un
t ad
jud
icat
ed b
y t
he
cou
rt;
[Q4-2
011]
On
goin
g.
Th
e F
eder
atio
n o
f C
ou
rt B
aili
ffs
of
Gre
ece
and t
he
Nat
ion
al
Counci
l of
Gre
ek N
ota
ries
hav
e in
form
ed t
he
Min
istr
y o
f
Just
ice
that
co
urt
bai
liff
s an
d n
ota
ry a
sso
ciat
ion
s do
no
t co
llec
t
dat
a o
n r
eco
ver
y r
ates
by
bai
liff
s o
r n
ota
ries
. S
tati
stic
s o
n t
ax
case
s an
d c
orp
ora
te i
nso
lven
cy c
ases
wil
l b
e re
ques
ted
to
be
com
pil
ed a
nd
pub
lish
ed s
tart
ing f
rom
th
e fi
rst
qu
arte
r o
f 2
01
2
for
tax c
ases
an
d t
he
thir
d q
uar
ter
of
20
12 f
or
corp
ora
te
inso
lven
cy c
ases
.
Th
e G
ov
ern
men
t co
nd
uct
s an
ass
essm
ent
on
wh
eth
er t
he
refo
rm o
f th
e C
od
e o
f A
dm
inis
trat
ive
Pro
ced
ure
has
del
iver
ed t
he
resu
lts
that
th
e le
gis
lati
on h
ad s
et o
ut
to d
o;
[Q4
-20
11
] O
bse
rved
.
Th
e G
ov
ern
men
t in
crea
ses
the
cost
s o
f ci
vil
lit
igat
ion
in l
ine
wit
h t
he
po
licy
un
der
lyin
g t
he
incr
ease
of
liti
gat
ion c
ost
s in
adm
inis
trat
ive
mat
ters
; [Q
4-2
01
1]
On
goin
g.
Th
e la
w a
dd
ress
ing
iss
ues
of
fair
tri
al a
nd d
enia
l of
just
ice
that
was
ad
op
ted b
y t
he
Hel
len
ic P
arli
amen
t o
n 6
Mar
ch 2
01
2
pro
vid
es f
or
the
incr
ease
of
the
cost
s o
f ci
vil
lit
igat
ion,
esp
ecia
lly
fo
r li
tig
ants
wh
o a
re d
efea
ted
at
the
appea
l st
age.
Th
e
Go
ver
nm
ent
expec
ts t
hat
the
dra
ft l
aw w
ill
be
adop
ted
du
rin
g
the
curr
ent
par
liam
enta
ry t
erm
.
Th
e G
ov
ern
men
t es
tabli
shes
a t
ask
fo
rce
wit
h a
man
dat
e to
des
ign a
per
form
ance
fra
mew
ork
fo
r co
urt
s w
ith
a v
iew
to
con
sid
erin
g l
inks
to r
eso
urc
e al
loca
tio
n i
n f
utu
re r
evis
ion
s o
f th
is M
emo
ran
du
m.
Th
e ta
sk f
orc
e w
ill
dev
elo
p b
y S
epte
mb
er
20
12
: i)
a d
epen
dab
le d
ata
man
agem
ent
syst
em, a
wo
rklo
ad m
easu
rem
ent
syst
em, an
d a
man
agem
ent
stru
cture
, th
at i
s
con
du
cive
to a
mo
re e
ffec
tive,
res
po
nsi
ble
, an
d a
cco
unta
ble
ju
dic
ial
man
agem
ent;
ii)
a f
ull
y o
per
atio
nal
an
d p
ub
licl
y
avai
lab
le d
atab
ase
wit
h c
ase
dat
a fo
r ea
ch c
ou
rt (
as w
ell
as c
on
soli
dat
ed d
ata
for
all
cou
rts)
, giv
ing
bas
ic p
erfo
rman
ce d
ata,
incl
ud
ing n
um
ber
of
jud
ges
an
d s
taff
, num
ber
of
case
s (i
ncl
udin
g b
y c
ase
type)
an
d b
ack
log
s; i
ii)
a w
ork
pla
n o
n
ben
chm
ark
ing c
ases
fo
r w
ork
load
mea
sure
men
t, i
ncl
udin
g f
ocu
sing o
n d
elay
s in
cas
e pro
cess
ing, an
d t
he
types
of
case
s
wh
ere
such
del
ays
are
mo
st a
cute
. [
Q4
-20
11
]
Ob
serv
ed o
r o
ng
oin
g.
Th
e G
ov
ern
men
t es
tabli
shed
a w
ork
ing
gro
up
man
dat
ed t
o
des
ign
a p
erfo
rman
ce a
nd a
cco
unta
bil
ity
fra
mew
ork
for
court
s.
Th
e w
ork
ing g
rou
p h
as i
nit
iall
y b
een
set
up u
nti
l 3
1 M
ay 2
01
2
and
wil
l al
so b
e re
spo
nsi
ble
for
the
pro
ject
on s
tati
stic
s fo
r
just
ice
conta
ined
in
th
e D
ecem
ber
20
11
e-j
ust
ice
wo
rk p
lan
.
In o
rder
to
im
pro
ve
the
effi
cien
cy o
f co
urt
s, t
he
Go
ver
nm
ent
amen
ds
Law
17
56
/19
88
on
the
org
anis
atio
n o
f th
e co
urt
s an
d
the
situ
atio
n o
f co
urt
off
icia
ls, an
d r
elev
ant
imple
men
ting r
ule
s, a
lway
s re
spec
tin
g t
he
ind
epen
den
ce o
f ju
stic
e, s
o a
s to
all
ow
and
fac
ilit
ate
the
intr
od
uct
ion o
f h
um
an r
esourc
e m
anag
emen
t m
easu
res
in c
ourt
s, s
uch
as
mobil
ity
of
court
off
icia
ls,
ince
nti
ves
fo
r th
e ef
fici
ent
adm
inis
trat
ion o
f co
urt
s an
d c
onti
nu
ou
s m
anag
emen
t tr
ain
ing
pro
gra
mm
es f
or
cou
rt o
ffic
ials
wit
h
man
agem
ent
task
s; [
Q1
-20
12
]
On
goin
g.
Th
e la
w a
dd
ress
ing
iss
ues
of
fair
tri
al a
nd d
enia
l of
just
ice
pro
vid
es f
or
an a
men
dm
ent
of
Law
17
56
/19
88
. In
par
ticu
lar,
the
dra
ft l
aw a
men
ds
pro
vis
ion
s re
gula
tin
g m
atte
rs s
uch
as
leav
e,
pro
mo
tio
n,
tran
sfer
, ca
reer
rev
iew
an
d d
isci
pli
nar
y a
ctio
n.
Th
e G
ov
ern
men
t im
po
ses
add
itio
nal
dis
suas
ive
mea
sure
s ag
ain
st n
on
-coo
per
ativ
e deb
tors
in e
nfo
rcem
ent
case
s; [
Q1-2
01
2]
On
goin
g.
In t
he
area
of
enfo
rcem
ent,
the
law
ad
dre
ssin
g i
ssu
es o
f fa
ir t
rial
and
den
ial
of
just
ice
sho
rten
s st
atu
tory
tim
e p
erio
ds
and
tig
hte
ns
Eu
rop
ea
n C
om
mis
sio
n
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
83
con
dit
ion
s u
nd
er w
hic
h e
nfo
rcem
ent
acti
on
may
be
susp
end
ed
Th
e G
ov
ern
men
t p
rese
nts
a q
ual
itat
ive
stu
dy
on r
eco
ver
y r
ates
in e
nfo
rcem
ent
pro
ceed
ing
s, e
val
uat
ing
th
e su
cces
s ra
tes
and
the
effi
cien
cy o
f th
e var
iou
s m
odes
of
enfo
rcem
ent.
[Q
1-2
01
2]
On
goin
g.
Th
e M
inis
try
of
Just
ice
pla
ns
to c
on
tact
the
Pre
siden
t o
f th
e
Nat
ion
al C
ou
nci
l o
f G
reek
No
tari
es, th
e F
eder
atio
n o
f C
ou
rt
Bai
liff
s o
f G
reec
e an
d s
ever
al h
igh s
tree
t ban
ks
for
the
pu
rpo
se
of
this
stu
dy
.
Th
e G
ov
ern
men
t d
ecid
es o
n t
he
dat
e by
wh
en i
t w
ill
open
acc
ess
to t
he
reg
ula
ted
pro
fess
ion
of
med
iato
r to
no
n-l
awy
ers
in
lin
e w
ith
th
is m
emo
ran
du
m c
on
dit
ion
alit
y o
n r
egula
ted
pro
fess
ion
s an
d p
rese
nts
an
act
ion
pla
n e
nsu
rin
g t
hat
no
n-l
awy
ers
may
off
er m
edia
tio
n s
ervic
es o
n t
hat
dat
e. [
Q1
-201
2]
Th
e G
ov
ern
men
t es
tabli
shes
a t
ask
fo
rce
that
is
bro
adly
rep
rese
nta
tiv
e o
f th
e le
gal
co
mm
un
ity
, in
clu
din
g,
but
not
lim
ited
to,
acad
emia
, p
ract
isin
g l
awy
ers,
in
-ho
use
law
yer
s, l
awy
ers
fro
m o
ther
EU
Mem
ber
Sta
tes
esta
bli
shed
or
off
erin
g t
hei
r se
rvic
es
in G
reec
e, a
imed
at
revie
win
g t
he
Co
de
of
Civ
il P
roce
du
re a
nd b
rin
g i
t in
lin
e w
ith i
nte
rnat
ion
al b
est
pra
ctic
es o
n, in
ter
ali
a,
(i)
judic
ial
case
man
agem
ent,
incl
ud
ing t
he
po
ssib
ilit
y o
f re
mo
vin
g d
orm
ant
case
s fr
om
co
urt
reg
iste
rs;
(ii)
rel
iev
ing j
ud
ges
fro
m n
on
-ad
jud
icat
ory
wo
rk,
such
as
pre
-mo
rtg
agin
g o
f im
mo
vab
le p
rop
erty
, fo
rmat
ion a
nd d
isso
luti
on
of
inco
rpo
rate
d
enti
ties
an
d c
on
sen
sual
/no
n-l
itig
ious
fam
ily
law
appli
cati
ons,
(ii
i) t
he
enfo
rcem
ent
of
dec
isio
ns
and o
f o
rder
s to
pay
, in
par
ticu
lar
smal
l cl
aim
s ca
ses
wit
h a
vie
w t
o r
educi
ng
th
e ro
le o
f th
e ju
dge
in t
hes
e p
roce
du
res,
an
d (
iv)
enfo
rcin
g s
tatu
tory
dea
dli
nes
fo
r co
urt
pro
cess
es,
in p
arti
cula
r fo
r in
jun
ctio
n p
roce
du
res
and
deb
t en
forc
emen
t an
d i
nso
lven
cy c
ases
. F
or
the
pu
rpo
ses
of
this
Mem
ora
nd
um
, ju
dic
ial
case
man
agem
ent
shal
l m
ean t
he
poss
ibil
ity
of
judges
to b
e in
volv
ed e
arly
in
iden
tify
ing
th
e pri
nci
pal
fac
tual
an
d l
egal
iss
ues
in
dis
pu
te b
etw
een
th
e p
arti
es,
requ
ire
law
yer
s an
d l
itig
ants
to a
tten
d p
re-
hea
rin
g c
on
fere
nce
s an
d m
anag
e th
e co
nd
uct
of
pro
ceed
ing
s an
d t
he
pro
gre
ssio
n o
f th
e ca
se t
o a
chie
ve
the
earl
iest
and
mo
st
cost
-eff
ecti
ve
reso
luti
on
of
the
dis
pu
te.
[Q2
-20
12]
Th
e G
ov
ern
men
t ca
rrie
s o
ut
an e
val
uat
ion
[Q
3-2
01
2]
of
the
bac
klo
g r
edu
ctio
n p
lan
of
tax
cas
es i
n a
ll a
dm
inis
trat
ive
trib
un
als
and
ad
min
istr
ativ
e co
urt
s o
f ap
pea
l es
tabli
shed
in
Q4
-20
11
, it
als
o u
pd
ates
the
pla
n a
nd
it
takes
rem
edia
l ac
tio
n,
sho
uld
ther
e
be
dev
iati
on
s in
ach
iev
ing
full
cle
aran
ce o
f th
e bac
klo
g b
y e
nd
-Ju
ly 2
013;
By
en
d-A
ugu
st 2
012,
the
Go
ver
nm
ent
pre
sen
ts, b
ased
on
th
e st
udy
co
nd
uct
ed j
oin
tly
wit
h a
n e
xte
rnal
bo
dy
of
exper
ts, an
acti
on
pla
n w
ith
sp
ecif
ic t
arg
ets
for
a re
du
ctio
n o
f th
e b
ack
log
of
no
n-t
ax c
ases
in
co
urt
s o
f at
lea
st 5
0 p
er c
ent
by
en
d-J
uly
20
13
an
d i
t st
arts
im
ple
men
tin
g t
he
acti
on p
lan
.
Th
e G
ov
ern
men
t co
nd
uct
s an
ass
essm
ent
of
wh
eth
er t
he
enac
tmen
t o
f L
aw 3
89
8/2
010 o
n m
edia
tion o
n c
ivil
and c
om
mer
cial
mat
ters
has
del
iver
ed t
he
resu
lts
wh
ich
the
leg
isla
tio
n h
ad s
et o
ut
to d
o,
and
pre
sents
dat
a an
d a
nal
ysi
s co
nce
rnin
g c
ost
s, t
ime
and
su
cces
s ra
tes
asso
ciat
ed w
ith t
he
enfo
rcem
ent
of
agre
emen
ts a
risi
ng
fro
m a
lter
nat
ive
dis
pu
te r
eso
luti
on
as
com
par
ed w
ith
the
enfo
rcem
ent
of
jud
icia
l dec
isio
ns.
[Q
4-2
01
2]
Th
e ta
skfo
rce
on t
he
revie
w o
f th
e C
od
e o
f C
ivil
Pro
ced
ure
mak
es s
pec
ific
rec
om
men
dat
ion
s o
n:
(i)
case
man
agem
ent,
(ii
)
reli
evin
g j
ud
ges
fro
m n
on
-ad
jud
icat
ory
wo
rk;
(iii
) th
e re
duct
ion o
f th
e ro
le o
f th
e ju
dg
e in
the
enfo
rcem
ent
of
dec
isio
ns
and
of
ord
ers
to p
ay a
nd
(iv
) o
n e
nfo
rcin
g s
tatu
tory
dea
dli
nes
fo
r co
urt
pro
cess
es.
[Q1
-20
13
]
No
t ye
t a
ppli
cable
.
Eu
rop
ea
n C
om
mis
sio
n
A
NN
EX
1
The
ec
on
om
ic a
dju
stm
en
t p
rog
ram
me
fo
r G
ree
ce
84
Ta
ble
A5
– R
efo
rm
Mo
nit
ori
ng
an
d T
ech
nic
al
Ass
ista
nce
Act
ion
s in
th
e M
emora
nd
um
of
Un
der
stan
din
g o
n s
pec
ific
poli
cy c
on
dit
ion
ali
ty
Com
men
ts
Th
e M
inis
try
of
Fin
ance
's d
irec
tora
te o
f pla
nn
ing,
man
agem
ent
and
mo
nit
ori
ng
bec
om
es o
per
atio
nal
wit
h t
he
aim
of
imp
rov
ing
ref
orm
man
agem
ent
and o
ver
sight.
It
star
ts p
ubli
shin
g q
uar
terl
y m
on
ito
rin
g i
ndic
ato
rs f
or
each
of
the
key
stru
ctu
ral
refo
rm i
nit
iati
ves
, o
n a
qu
arte
rly
bas
is. [Q
4-2
01
1]
No
t o
bse
rved
.
Th
e G
ov
ern
men
t w
ill
req
ues
t te
chn
ical
ass
ista
nce
to
be
pro
vid
ed b
y t
he
EU
Mem
ber
Sta
tes,
th
e E
uro
pea
n C
om
mis
sio
n t
he
IMF
or
oth
er o
rgan
isat
ion
s in
pri
ori
ty a
reas
. T
hes
e te
chn
ical
ass
ista
nce
act
ion
s w
ill
be
coo
rdin
ated
by
th
e C
om
mis
sio
n's
tech
nic
al a
ssis
tan
ce t
ask
forc
e.
On
goin
g.
Th
e C
om
mis
sio
n's
tas
kfo
rce
for
tech
nic
al a
ssis
tan
ce f
or
Gre
ece
has
bee
n v
ery
act
ive
in s
ever
al p
roje
cts
(see
th
e re
spec
tive
qu
arte
rly
rep
ort
).
European Commission ANNEX 2
The economic adjustment programme for Greece
85
Annex 2: Macroeconomic forecast
Annual % change 2009 2010 2011 2012 2013 2014
1. Private consumption expenditure -1.3 -3.6 -7.2 -5.7 -1.1 0.9
2. Government consumption expenditure 4.8 -7.2 -9.5 -11.0 -9.5 -4.7
3. Gross fixed capital formation -15.2 -15.0 -17.0 -6.6 6.7 9.8
4. Final domestic demand -3.1 -6.2 -9.1 -6.7 -1.3 1.4
5. Change in inventories + net acquisitions of
valuables -1.1 -0.5 0.2 0.0 0.0 0.0
6. Domestic demand -5.0 -5.7 -8.6 -6.9 -1.3 1.4
7. Exports of goods and services -19.5 4.2 3.0 3.2 5.5 7.0
7a. - of which goods -15.7 5.4 2.5 3.2 4.0 7.0
7b. - of which services -22.5 3.2 3.5 3.2 6.8 7.0
8. Final demand -8.0 -4.2 -6.6 -5.0 0.1 2.6
9. Imports of goods and services -20.2 -7.2 -7.0 -5.1 0.0 2.4
9a. - of which goods -21.0 -10.7 -7.0 -5.1 0.3 2.4
9b. - of which services -16.5 7.0 -7.2 -5.1 -1.0 2.4
10. Gross domestic product at market prices -3.2 -3.5 -6.9 -4.7 0.0 2.5
Contribution to change in GDP
11. Final domestic demand -3.6 -7.0 -10.0 -7.2 -1.4 1.5
12. Change in inventories + net acq. of valuables -2.3 0.6 0.7 -0.2 0.0 0.0
13. External balance of goods and services 3.1 3.1 2.8 2.3 1.4 1.2
Annual % change 2009 2010 2011 2012 2013 2014
1. Private consumption expenditure -1.1 0.7 -4.4 -6.1 -1.3 1.1
2. Government consumption expenditure 12.6 -12.7 -12.2 -12.8 -10.5 -4.7
3. Gross fixed capital formation -11.3 -14.4 -16.2 -6.2 6.9 10.3
4. Final domestic demand -0.6 -4.3 -7.5 -7.1 -1.5 1.7
5. Change in inventories + net acquisition of valuables
6. Domestic demand -2.7 -4.0 -7.1 -7.1 -1.5 1.7
7. Exports of goods and services -20.2 9.9 6.1 3.0 5.2 6.9
7a. - of which, goods -18.9 13.8 5.5 2.9 3.8 6.9
7a. - of which, services -21.2 6.8 6.6 3.0 6.5 6.9
8. Final demand -5.7 -2.0 -4.9 -5.3 -0.2 2.8
9. Imports of goods and services -19.1 -2.4 -3.7 -5.1 0.7 3.7
9a. - of which goods -20.2 -5.2 -3.7 -5.1 1.0 3.7
9a. - of which, services -13.9 9.2 -3.8 -5.1 -0.4 3.6
10. Gross domestic product at market prices -0.8 -1.9 -5.3 -5.4 -0.4 2.5
11. Gross national income -0.3 -2.2 -5.5 -4.2 -0.2 2.2
12. Compensation of employees 2.6 -5.1 -8.8 -12.4 -1.5 0.7
13. Gross operating surplus and mixed income -1.0 -1.5 -3.6 -1.0 0.0 3.8
14. Gross value added at basic prices 0.5 -3.0 -5.7 -5.5 -0.5 2.7
14a. - of which, labour costs, including self-employed 2.9 -5.1 -8.8 -12.4 -1.5 0.7
15. Taxes net of subsidies -10.0 6.6 -1.7 -3.6 1.2 1.7
16. - taxes on products -9.8 6.1 -1.4 -3.4 1.2 1.8
17. - subsidies on products 76.7 -16.4 20.0 2.6 2.6 2.6
Table A1: USE AND SUPPLY OF GOODS AND SERVICES (volume)
Table A2: USE AND SUPPLY OF GOODS AND SERVICES (value)
European Commission ANNEX 2
The economic adjustment programme for Greece
86
% change in implicit price deflator 2009 2010 2011 2012 2013 2014
1. Private consumption expenditure 1.1 4.5 3.0 -0.4 -0.3 0.2
2. Government consumption expenditure 2.0 -6.0 -3.0 -2.0 -1.0 0.0
3. Gross fixed capital formation -0.2 0.7 1.0 0.4 0.2 0.4
3a. - of which, construction 0.3 0.3 0.9 0.4 0.1 0.4
3b. - of which, equipment -0.6 1.3 0.8 0.4 0.0 0.4
4. Final domestic demand 1.3 2.0 1.8 -0.4 -0.2 0.2
5. Domestic demand 1.4 1.8 1.6 -0.3 -0.2 0.2
6. Exports of goods and services -0.2 5.5 3.0 -0.2 -0.2 -0.1
6a. - of which, goods -1.1 7.9 3.0 -0.2 -0.2 -0.1
6b. - of which, services 0.5 3.5 3.0 -0.2 -0.2 -0.1
7. Final demand 1.3 2.3 1.8 -0.3 -0.2 0.2
8. Imports of goods and services -0.7 5.2 3.5 0.0 0.6 1.3
8a. - of which, goods -2.1 6.1 3.5 0.0 0.7 1.3
8b. - of which, services 6.2 2.1 3.7 0.0 0.6 1.2
9. Gross domestic product at market prices 1.6 1.7 1.6 -0.7 -0.4 0.0
10. Terms of trade of goods and services 0.4 0.3 -0.5 -0.2 -0.9 -1.4
10a. - of which, terms of trade of goods 1.0 1.7 -0.5 -0.2 -0.9 -1.4
10b. - of which, terms of trade of services -5.3 1.4 -0.7 -0.2 -0.8 -1.3
11. HICP 1.3 4.7 3.1 -0.5 -0.3 0.1
11a. -at constant taxes 1.1 1.4 1.2 -1.2 -0.8 0.1
Annual % change 2009 2010 2011 2012 2013 2014
1. Gross value added at 1995 basic prices -1.4 -3.6 -8.0 -5.0 -0.2 2.6
2. Employment ('000) -0.7 -1.9 -6.3 -4.8 -0.2 1.6
3. GVA per occupied person -0.7 -1.7 -1.8 -0.2 0.0 1.0
4. Compensation of employees (per employee) 3.6 -3.3 -2.7 -8.0 -1.3 -0.9
5. Unit labour costs (1995=100) 4.3 -1.6 -1.0 -7.8 -1.3 -1.9
6. Total population 0.4 0.2 0.4 0.4 0.4 0.4
7. Population of working age (15-64 years) 0.1 0.0 -0.2 -0.3 -0.2 -0.2
8. Total labour force 1.1 1.2 -1.5 -2.5 -0.3 0.2
9. Total employment -0.7 -1.9 -6.3 -4.8 -0.2 1.6
9(a). - of which, employees -0.9 -1.9 -6.3 -4.8 -0.2 1.6
9(b). - of which, self-employed -0.3 -1.9 -6.3 -4.8 -0.2 1.6
10. Unemployment 24.4 33.0 34.5 9.5 -0.7 -6.3
10a. Calculated unemployment rate (%) 9.1 11.7 15.9 17.9 17.8 16.7
Table A4: LABOUR MARKET AND LABOUR COST
Table A3: COSTS AND PRICES
European Commission ANNEX 2
The economic adjustment programme for Greece
87
levels 2009 2010 2011 2012 2013 2014
1. Private consumption expenditure 168.2 169.4 161.9 152.1 150.1 151.7
2. Government consumption expenditure 47.3 41.3 36.3 31.6 28.3 27.0
3. Gross fixed capital formation 44.1 37.8 31.7 29.7 31.8 35.0
4. Final domestic demand (1+2+3) 259.7 248.5 229.9 213.4 210.2 213.7
5. Change in inventories + net acquisition of valuables as % of GDP -1.7 -1.0 0.0 0.0 0.0 0.0
6. Domestic demand (4+5) 257.9 247.5 229.9 213.4 210.2 213.7
7. Exports of goods and services 44.5 48.9 51.9 53.4 56.2 60.1
7a. - of which, goods 20.1 22.8 24.1 24.8 25.7 27.5
7a. - of which, services 24.4 26.1 27.8 28.6 30.5 32.6
8. Final demand (6+7) 302.4 296.4 281.7 266.9 266.4 273.8
9. Imports of goods and services 70.8 69.1 66.5 63.1 63.5 65.9
9a. - of which goods 57.1 54.2 52.1 49.5 49.9 51.8
9a. - of which, services 13.6 14.9 14.3 13.6 13.6 14.0
10. Gross domestic product at market prices ( 8-9 ) 231.6 227.3 215.2 203.8 202.9 207.9
11. - of wich, external balance of goods and services -26.3 -20.2 -14.6 -9.7 -7.3 -5.8
12. Balance of primary income with rest of the world -5.6 -6.2 -6.4 -3.6 -3.1 -3.7
13. Gross national income at market prices (10+12) 226.0 221.1 208.9 200.2 199.7 204.2
14. Compensation of employees 86.4 82.0 74.7 65.5 64.5 64.9
15. Gross operating surplus and mixed income 122.4 120.6 116.3 115.1 115.1 119.4
16. Gross value added at basic prices 206.6 200.6 189.0 178.4 177.3 181.9
16a. - of which, labour costs, including self-employed 131.5 124.8 113.8 99.7 98.2 98.9
17. Taxes net of subsidies (18-19) 25.03 26.69 26.2 25.3 25.6 26.0
18. - taxes on products 25.6 27.1 26.8 25.8 26.1 26.6
19. - subsidies on products 0.5 0.4 0.5 0.5 0.6 0.6
20. Gross domestic product at market prices ( 16 + 17 ) 231.6 227.3 215.2 203.7 202.9 207.9
levels 2009 2010 2011 2012 2013 2014
1. Gross value added at 1995 basic prices 180.3 173.9 160.1 152.1 151.8 155.8
2. Employment ('000) 4834.8 4743.4 4444.6 4231.2 4222.8 4290.3
3. GVA per occupied person (1:2) 37.3 36.7 36.0 36.0 36.0 36.3
4. Compensation of employees (per employee) 27.2 26.3 25.6 23.6 23.3 23.0
5. Unit labour costs (4:3) (1995=100) 72.9 71.8 71.1 65.5 64.7 63.5
6. Total population 11287.8 11310.1 11349.7 11389.4 11429.3 11469.3
7. Population of working age (15-64 years) 7542.0 7539.6 7524.5 7501.9 7486.9 7471.9
8. Total labour force 5305.9 5369.9 5287.3 5154.0 5139.1 5148.9
9. Calculated activity rate (%) (8:7) 70.4 71.2 70.3 68.7 68.6 68.9
10. Total employment 4762.7 4743.4 4444.6 4231.2 4222.8 4290.3
11. Total employment 4762.7 4743.4 4444.6 4231.2 4222.8 4290.3
11(a). - of which, employees 3174.9 3114.6 2918.4 2778.3 2772.8 2817.1
11(b). - of which, self-employed 1587.7 1628.8 1526.2 1452.9 1450.0 1473.2
12. Calculated employment rate (11:7) 64.1 62.9 59.1 56.4 56.4 57.4
13. Unemployment (8 - 11) 471.1 626.5 842.7 922.7 916.3 858.5
13a. Calculated unemployment rate (%) (13:8) 8.9 11.7 15.9 17.9 17.8 16.7
Table B1: USE AND SUPPLY OF GOODS AND SERVICES (value, in EUR billion)
Table B2: LABOUR MARKET AND LABOUR COST (in EUR billion unless otherwise stated)
European Commission ANNEX 2
The economic adjustment programme for Greece
88
levels 2009 2010 2011 2012 2013 2014
1. Exports of goods (fob) 20.1 22.8 24.1 24.8 25.7 27.5
2. Imports of goods (fob) 57.1 54.2 52.1 49.5 49.9 51.8
3. Trade balance (goods, fob/fob) (1-2) -37.1 -31.3 -28.1 -24.7 -24.2 -24.3
3a. p.m. (3) as % of GDP -16.0 -13.8 -13.0 -12.1 -11.9 -11.7
4. Exports of services (a) 24.4 26.1 27.8 28.6 30.5 32.6
5. Imports of services (a) 13.6 14.9 14.3 13.6 13.6 14.0
6. Services balance (a) (4-5) 10.8 11.2 13.5 15.0 17.0 18.6
6a. p.m. 6 as % of GDP 4.6 4.9 6.2 7.4 8.4 8.9
7. External balance of goods & services (3+6) -26.3 -20.2 -14.6 -9.7 -7.3 -5.8
7a. p.m. 7 as % of GDP -11.4 -8.9 -6.8 -4.7 -3.6 -2.8
8. Balance of primary incomes and current Transfers -6.8 -7.8 -7.5 -4.4 -3.5 -3.8
8a. - of which, balance of primary income -5.6 -6.2 -6.4 -3.6 -3.1 -3.7
8b. - of which, net current Transfers -1.2 -1.6 -1.1 -0.8 -0.4 -0.1
8c. p.m. 8 as % of GDP -3.0 -3.5 -3.5 -2.2 -1.7 -1.8
9. Current external balance (7+8) -33.1 -28.0 -22.1 -14.1 -10.8 -9.6
9a. p.m. 9 as % of GDP -14.3 -12.3 -10.3 -6.9 -5.3 -4.6
10. Net capital transactions 2.4 3.9 4.2 4.3 4.5 4.7
11. Net lending (+)/ net borrowing (-) (9+10) -30.8 -24.1 -18.0 -9.7 -6.3 -4.9
11a. p.m. 11 as % of GDP -13.3 -10.6 -8.3 -4.8 -3.1 -2.4
Table B3: EXTERNAL BALANCE
European Commission ANNEX 2
The economic adjustment programme for Greece
89
2009 2010 2011 2012 2013 2014
Total revenue 88.1 89.8 88.5 86.3 85.5 86.9
Indirect taxes 26.2 27.3 27.8 26.1 26.0 26.1
Direct taxes 19.1 17.5 17.8 19.9 19.0 19.8
Social contributions 29.5 29.8 27.3 25.1 25.2 25.8
Sales 5.2 5.5 5.2 5.0 5.0 5.1
Other current resources 4.9 5.1 5.3 5.0 5.1 5.3
Capital transfers received 3.2 4.6 5.0 5.2 5.2 4.8
Total expenditure 124.7 113.9 108.5 101.1 102.5 103.0
Intermediate consumption 17.1 14.0 11.2 10.7 10.9 10.9
Compensation of employees 31.0 27.5 26.2 24.0 23.8 23.4
Social transfers other than in kind 49.0 47.2 46.2 43.3 43.9 43.8
Interest 12.0 12.9 14.8 12.8 13.0 13.8
Subsidies 0.1 0.1 0.1 0.1 0.1 0.1
Other current expenditure 3.5 3.3 2.8 2.7 3.2 3.3
Gross fixed capital formation 7.3 6.6 4.7 5.1 5.3 5.4
Other capital expenditure 4.9 2.3 2.3 2.3 2.3 2.3
General Government balance -36.6 -24.1 -20.0 -14.8 -17.0 -16.1
Primary balance -24.7 -11.3 -5.2 -2.0 -4.0 -2.3
Primary target balance -2.0 3.7 9.4Measures to be identified 0.0 -7.6 -11.7
Total revenue 38.0 39.5 41.1 42.3 42.2 41.8
Indirect taxes 11.3 12.0 12.9 12.8 12.8 12.6
Direct taxes 8.3 7.7 8.3 9.8 9.4 9.5
Social contributions 12.7 13.1 12.7 12.3 12.4 12.4
Sales 2.3 2.4 2.4 2.4 2.4 2.5
Other current resources 2.1 2.2 2.5 2.5 2.5 2.6
Capital transfers received 1.4 2.0 2.3 2.6 2.6 2.3
Total expenditure 53.8 50.1 50.4 49.6 50.5 49.5
Intermediate consumption 7.4 6.1 5.2 5.3 5.4 5.2
Compensation of employees 13.4 12.1 12.2 11.8 11.7 11.3
Social transfers other than in kind 21.1 20.8 21.5 21.3 21.6 21.1
Interest 5.2 5.7 6.9 6.3 6.4 6.6
Subsidies 0.1 0.1 0.0 0.0 0.0 0.0
Other current expenditure 1.5 1.5 1.3 1.3 1.6 1.6
Gross fixed capital formation 3.1 2.9 2.2 2.5 2.6 2.6
Other capital expenditure 2.1 1.0 1.1 1.1 1.1 1.1
General Government balance -15.8 -10.6 -9.3 -7.3 -8.4 -7.7
Primary balance -10.6 -5.0 -2.4 -1.0 -2.0 -1.1
Primary target balance -1.0 1.8 4.5
Measures to be identified 0.0 -3.8 -5.6
C1: FISCAL ACCOUNTS AND FORECAST
% of GDP
Levels (in EUR billion)
European Commission ANNEX 2
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2009 2010 2011 2012 2013 2014
Debt 299.5 329.4 355.8 327.0 333.0 335.0
Change in debt 36.4 29.9 26.4 -28.8 6.0 2.0
Government deficit (level) -36.6 -24.1 -20.0 -14.8 -9.4 -4.4
Stock-flow adjustment -0.2 5.8 6.4 -43.6 -3.4 -2.4
Debt 129.3 144.9 165.3 160.5 164.2 161.1
Change in the ratio 16.5 15.6 20.4 -4.7 3.6 -3.0
Contributions:
Primary balance (+ is a deficit) 10.6 5.0 2.4 1.0 -1.8 -4.5
“Snow-ball” effect 5.9 8.1 15.0 15.7 7.1 2.6
Stock-flow adjustment -0.1 2.5 3.0 -21.4 -1.7 -1.2
C2: GOVERNMENT DEBT
levels (EUR billion)
% GDP
91
Annex 3: Updated programme documents
Letter of Intent 92
Memorandum of Economic and Financial Policies 94
Memorandum of Understanding on Specific Economic Policy conditionality 126
Technical Memorandum of Understanding 176
European Commission ANNEX 2
The economic adjustment programme for Greece
92
Athens, 11 March 2012
Mr. Jean-Claude Juncker,
President,
Eurogroup,
Brussels.
Mr. Olli Rehn,
Vice President for Economic and Monetary Affairs and the Euro,
European Commission,
Brussels.
Mr. Mario Draghi,
President,
European Central Bank,
Frankfurt am Main.
Dear Messrs Juncker, Rehn and Draghi,
The attached Memorandum of Economic and Financial Policies (MEFP) and Memorandum of
Understanding on Economic Policy Conditionality (MoU) outline the economic and financial
policies that Greece will implement during the remainder of 2012 and in the period 2013-14. These
policies aim to address Greece’s competitiveness gap, support growth and employment, restore
public finances to sustainability, secure financial system stability, and distribute the cost of
adjustment in an equitable way, within our commitment to the common currency.
In support of our objectives, we have committed to a set of key policies, building on what has been
achieved under the programme agreed in May 2010. This set of policies places strong emphasis on
restoring growth and ensuring an equitable fiscal adjustment:
! To restore competitiveness and growth, our policies aim to accelerate the implementation of
deep structural reforms in the labour, product and service markets. Indeed to give a strong
upfront impetus to unit labour cost reductions, and protect employment, we have already
reformed the collective bargaining framework and reduced the minimum wage as a prior
action for this programme. And to reduce market rigidities, boost productivity, and increase
long-term growth potential we are implementing reforms in product and service markets and
improvements in the business environment.
! To bring the fiscal deficit to a sustainable position, while protecting the most vulnerable
members of the population, our policies target bold structural spending and revenue reforms.
The adjustment will be achieved through permanent expenditure reductions. Measures to
this end have already been implemented as prior actions. These efforts will be supported on
the revenue side by a tax reform to broaden the tax base and achieve a fairer distribution of
the tax burden, and by revenue administration reforms to improve tax and social
contribution, collection. To reinvigorate this crucial latter effort, we have taken prior actions
to strengthen the tax administration.
! We have adopted a comprehensive banking sector strategy to secure a viable and well-
capitalized private banking sector that supports the economic recovery and sustained growth.
The banking system will be restructured and recapitalized following the upcoming sovereign
debt exchange. We have completed a capital needs assessment and a plan for a large state-
owned bank as prior actions. In support of these efforts, and as a further prior action, we
have strengthened our resolution and financial oversight framework
! We remain committed to our ambitious privatization plans. Transferring assets in key
sectors of the economy to more productive uses through privatization and concessions will
encourage private investment and support long-term growth.
In support of our ambitious multi-year policy program, we request a financing arrangement, until
end-2014, by the European Financial Stability Facility (EFSF) in the overall amount of EUR 144.7
billion (including the already committed or disbursed amounts for PSI liability management exercise
and banks recapitalisation). At the same time, we are requesting financing by the IMF, under the
Extended Fund Facility, in the amount of EUR 28 billion in a four-year arrangement, of which EUR
19.75 billion are expected to be disbursed by end-2014.
The implementation of our program will be monitored through quantitative performance criteria and
structural benchmarks as described in the attached MEFP, MoU and Technical Memorandum of
Understanding (TMU). The quarterly reviews will assess progress in implementing the program and
reach understandings on any additional measures that may be needed to achieve its objectives.
We believe that the policies set forth in the attached memoranda are adequate to achieve the
objectives under the programme. We stand ready to take any corrective actions that may become
appropriate for this purpose as circumstances change. We will consult with the European
Commission, the IMF and ECB staff before the adoption of any such actions and in advance of
revisions to the policies contained in these memoranda.
This letter is being copied to Ms Lagarde.
_______________/s/_______________
Lucas Papademos
Prime Minister
_______________/s/_______________ _______________/s/_______________
Evangelos Venizelos George Provopoulos
Deputy Prime Minister and Minister of Finance Governor of the Bank of Greece
European Commission ANNEX 2
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GREECE: MEMORANDUM OF ECONOMIC AND FINANCIAL POLICIES
Objectives, Strategy, and Outlook
1. Greece faces three key challenges. First, the Greek economy lacks
competitiveness. While progress has been made since 2010 in containing unit labor costs,
the estimated real effective exchange rate overvaluation still amounts to perhaps
15–20 percent. Second, fiscal sustainability needs to be restored. The primary deficit has
been brought down considerably since 2009, but the estimated 2011 outcome, a primary
deficit of about 2½ percent of GDP, remains well below the debt-stabilizing surplus. Lastly,
the financial sector faces liquidity and solvency issues due to its exposures to the sovereign,
deteriorating quality of the domestic loan portfolio, and a steady loss of deposits.
2. To address these challenges, the government will build on policies laid down in
its previous program, but amend the mix of adjustment and financing. To reduce policy
conflicts, the program will continue to place emphasis on ambitious implementation of
productivity-enhancing structural reforms in the labor, product, and service markets and to
improve the business environment. However, we must be realistic about the ultimate
magnitude and timing of their effects, which is inherently uncertain. To rebalance the
economy, support growth and employment, restore fiscal sustainability, and secure financial
stability, we will thus:
! Place more emphasis on securing reductions in unit labor costs and improvements in
competitiveness, through a combination of upfront nominal wage cuts and structural
labor market reforms. In unison with the elimination of rigidities in product and
service markets, these are expected to lower costs and facilitate the reallocation of
resources towards the tradable sectors, stronger growth, and higher employment.
! Smooth the impact of the deep and prolonged recession and deeper structural
reforms (and give them time to take effect) by reducing the amount of fiscal
adjustment in 2012.
! Fundamentally reduce the footprint of government in the economy through bold
structural fiscal reforms and by privatizing public assets. Greece’s recovery must
come from a vigorous private sector response and this cannot happen with the
government controlling access to key assets.
! Strengthen the capacity of the government to implement policies, via a wide ranging
administrative reform. We need to improve significantly the quality of public
services, the efficiency and effectiveness of the civil service (including in
mobilizing structural funds), and its ability to manage economic policy.
! These cost-reducing structural reforms and FDI-encouraging privatization plans,
when combined with fiscal retrenchment and gradual arrears clearance, will free up
liquidity for the private sector. Together with continued program finance, and
liquidity assistance for the banking system, this will help improve the tight financial
conditions now affecting the economy.
3. Nonetheless, the government recognizes that eliminating Greece’s large initial
imbalances, and achieving a balanced growth path, will take significant time:
! Real GDP is expected to recover to positive quarter-on-quarter growth rates during
2013. The program assumes that over time business sentiment benefits from the
successful implementation of the PSI operation, and economic activity and
employment growth gather momentum as unit labor costs decline, other
productivity-enhancing structural reforms are implemented, and fiscal adjustment is
completed. Still in the short-term GDP is projected to contract by another
4–5 percent cumulatively in 2012–13 on account of the worsened external
environment, the needed fiscal consolidation, private sector wage adjustment, and
adjustments in the banking system.
! Competitiveness is programmed to improve at an accelerated pace, supported by
upfront labor market reforms and by a comprehensive set of product market reforms.
Inflation is projected to drop significantly below the euro area level as cost-reducing
reforms and wage reductions filter through to prices. It should be possible to
significantly shrink the competitiveness gap relative to trading partners by the end of
the program period, and the economic system should continue to adjust for some
time thereafter to fully eliminate the gap.
! The external balance is projected to adjust only modestly in the remainder of 2012
given the deterioration of global economic conditions. However, as domestic
demand continues to contract and competitiveness improves the pace of external
adjustment should pick up. Still it is projected to take some time before Greece’s
current account deficit falls to a level that will allow Greece’s external debt to
steadily decline.
4. The government’s policy program, assisted by debt relief from private creditors
and official support on favorable terms, should put public debt on a sustainable path.
Under our program baseline, public debt will remain high during the program period, but is
projected to fall to about 120 percent of GDP by 2020, with continued declines thereafter.
Given the lengthy period of elevated debt levels, and Greece’s continued vulnerability to
shocks, we recognize that full and timely policy implementation will be critical to realize
this debt trajectory, notwithstanding the favorable financing we have received. These
policies and program financing are discussed in more detail in what follows.
European Commission ANNEX 2
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Economic Policies
A. Fiscal Policy
5. The government is committed to achieve a general government primary surplus
of 4½ percent of GDP by 2014. This is above Greece’s debt stabilizing primary balance,
and will allow debt to gradually decline (even with small shocks), and it is a level which
Greece and many other countries have sustained in the past. Mindful of the initial fiscal
position, the potential macroeconomic impact of fiscal tightening, and limitations on the
pace at which we can develop and implement structural fiscal reforms, we have adjusted our
2012 fiscal target to a primary deficit of 1 percent of GDP (versus our previous target of a
small surplus). We will target an adjustment of 2¾ percent of GDP in the primary balance in
both 2013 and 2014, drawing on bold fiscal structural reforms to be defined in the context of
the 2012 update of the MTFS, due in June. We would consult with the EC, ECB, and IMF in
the event of a significantly deeper than anticipated recession, to evaluate whether the fiscal
adjustment path should be extended beyond 2014.
6. To secure the program’s fiscal adjustment path, the government will undertake
bold structural spending reforms. Accounting for the projected pace of recovery,
Greece’s ongoing problems with tax compliance, and the need to adjust some of our
previous measures, additional measures will be needed beyond those already approved in
the context of the 2011 MTFS and 2012 budget. We project a need for 1½ percent of GDP
in measures in 2012, 1½ percent of GDP in tax administration improvements, and a further
5½ percent of GDP in spending measures in 2013-14 to get to the primary surplus target of
4½ percent of GDP by 2014. The bulk of adjustment will be achieved through expenditure
cuts that aim at permanently reducing the size of the state and improving government
efficiency, including by closing entities that no longer provide a cost-effective public
service and by targeted reductions in public employment. Many of these cuts will need to
fall on social transfers, the category of spending which increased most explosively in the
post euro accession period, but specific measures will be introduced to protect the core of
our social safety net and the most vulnerable segments of the population.
7. Key reforms, including those defined under the MTFS and 2012 budget,
include:
! Public sector wage bill reductions. We intend to bring our general government
wage bill into line with the performance of the most efficient OECD countries. This
would yield 1½ percent of GDP in savings by 2015, including ¼ percent of GDP in
new savings not captured in the existing MTFS. To achieve this objective, we will
combine reforms of employee compensation with personnel reductions.
" Reform of the public sector employee compensation. By end-June, we will
reform the special wage regimes (that account for about one-third of the public
sector wage bill). In line with the principles of the reform initiated in 2011, we
will adjust the wage grid for special regimes effective July 1, 2012 (including for
judges, diplomats, doctors, professors, police and armed forces), while protecting
those at lower pay scales, to realize permanent net savings of about 0.2 percent
of GDP on an annual basis. We will also review the new promotion system to
ensure that there are appropriate controls against wage drift through such
channels.
" Personnel reductions. We remain committed to reduce general government
employment by at least 150,000 in the period 2011–15. To achieve this target,
we will continue to strictly apply the existing 1:5 hiring to attrition ratio (1:10 for
state-owned enterprises) as well as the newly established pre-retirement scheme,
reduce contractual employment, and furlough enough redundant public
employees into the labor reserve by end-2012 to achieve 15,000 mandatory
separations (i.e. once their time in the labor reserve has been exhausted). The
planned functional review of public administration (below), and plans to close,
merge or shrink general government entities, will help identify redundant public
employees.
" Controls on hiring. To better control and limit hiring, we will: (i) reduce the
annual intake into schools for public sector employees, namely military and
police schools and other public academies, to a level consistent with hiring plans;
(ii) augment the labor reserve annually; and (iii) eliminate vacant positions in the
context of public sector restructuring. If slippages vis-à-vis the targeted
personnel reductions emerge, we will immediately enact a hiring freeze.
! Rationalizing and better targeting of social spending. Over the last few years, we
started reforms to contain the projected increase in pension spending to less than
2½ percentage points of GDP by 2060 (from a projection of 12½ percent of GDP),
maintain public health expenditures at about 6 percent of GDP, and to improve the
targeting of our social benefits. In our program we intend to bring this work agenda
to closure, realize in total around 4 percent of GDP in additional savings, while
improving social programs for those who are most in need:
" Pension reform. Given the high share of pensions in Greek government
spending, the large remaining fiscal adjustment will necessarily have to involve
further pension adjustments. We will do this in a way that protects lower income
pensioners. As upfront measures, to generate savings of about €450 million in
2012 (0.2 percent of GDP), we will: (i) reduce with a progressive schedule
supplementary pensions above €200 per month; (ii) adopt a framework law to
European Commission ANNEX 2
The economic adjustment programme for Greece
98
eliminate the structural deficit in supplementary pension funds over time; and
(iii) reduce by 12 percent the part for main pensions exceeding €1,300 a month.
Looking forward, by end-June, we will introduce reforms to eliminate arrears
and deficits in lump sum pension funds.
" Health spending. Our key aims are to bring pharmaceutical spending closer to
levels in other European countries, and to continue to reform health system
governance. For 2012, we have set a target to reduce public spending on
outpatient pharmaceuticals from 1.9 to 1% percent of GDP. Key upfront actions
include: promotion of the use of generics (e.g. via compulsory prescription by
active substance), reduction by about 15 percent in the maximum price of
generic relative to branded medicines, reduction in margins of pharmacists, and
extend the coverage of copayments. An automatic claw back mechanism will
guarantee that outpatient pharmaceutical spending for 2012–15 will not exceed
budget limits. Through the new health fund EOPYY, we will also complete the
introductions of new and more cost-effective contracts for physicians and adopt
uniform conditions for the purchase of health services. To rationalize the system
and exploit economies of scale, we will merge all health funds in EOPYY and
move its responsibility to the Ministry of Health.
! Other social benefit programs. Greece’s level of social spending (as a share of
GDP) remains well above the euro area average. We will thus continue to reform
social benefit programs and the governance of social assistance and social
security programs. As an upfront measure, we will improve the targeting of the
family allowances by excluding high income earners. Drawing on external
assistance, we will also undertake a thorough review of social spending programs
with the aim to identify 1½ percent of GDP in additional measures to be taken
over 2013-14. The review, to be completed by end-June 2012, will identify
programs to be discontinued, and opportunities to rationalize and strengthen core
social programs to better support individuals in need, while reducing transfers to
individuals who do not require them.
! Restructuring of government operations. The Greek public administration is
highly fragmented, has overlapping structures, and lacks coordination and adequate
IT systems. To address this we will take upfront actions, and identify deeper changes
to implement over the course of the program:
! Upfront actions. To help meet our 2012 fiscal target, we will: (i) in anticipation
of the forthcoming functional review, curtail operational spending and selected
subsidies and transfers at the central government level by an additional 0.2
percent of GDP (compared to the 2012 budget); and (ii) reduce investment
subsidies and lower-priority investment projects by 0.2 percent of GDP
(compared to the 2012 budget).
! Deeper restructuring. By end-June 2012, we will complete a plan to restructure
government operations and achieve additional savings of at least 1 percent of
GDP over the period 2013-14. The focus will be on closing and downsizing
general government units; identifying opportunities to outsource functions;
identifying redundancies, and restructuring both central and local public
administrations. The plan will also include the rationalization of defense
spending (without compromising defense capabilities).
8. Tax system reforms will also contribute to the fiscal adjustment through base
broadening, and reforms will also aim to facilitate revenue-neutral tax rate reductions.
The strategy involves:
! Tax reform. We intend to introduce a budget-neutral tax reform to simplify the tax
system, broaden the tax base to allow reductions in selected tax rates, and rebalance
the tax burden across tax categories to foster growth and competitiveness. We will
define a full schedule of intermediate steps towards adoption of such a tax reform,
including initial public consultation, review by the EC/ECB/IMF staff and release of
a formal proposal for discussion. This process will be concluded with the
presentation to parliament and enactment of reform legislation by end June 2012.
The reform package will include: (i) the repeal of the Code of Books and Records
and its replacement by simpler legislation, (ii) the elimination of several tax
exemptions and preferential regimes; (iii) simplification of the VAT and of the
property tax rate structure; (iv) a more uniform tax treatment of individual capital
income; and (v) a simplified personal and corporate income tax schedule.
! Revenue administration reforms. Given our low tax collection compared to other
European countries, our adjustment strategy relies on the introduction of extensive
revenue administration reforms (see below). These reforms will facilitate a more
equitable distribution of the adjustment burden across taxpayers. For medium-term
budget planning purposes, these reforms will be assumed to provide only back
loaded gains, limited to 1½ percent of GDP over the period 2011–15 and expected to
accrue only from 2013.
9. We are committed to deliver our fiscal target and stand ready to take corrective
measures in the event of underperformance. Corrective measures, if necessary, would
include additional targeted reductions in the public sector wage bill and social transfer
expenditures. Likewise, in the event of a sustained over performance that is deemed
permanent, we will tighten our deficit targets, but may also consider a reduction in social
contribution rates. We intend to maintain the relative tax burden from indirect taxes.
European Commission ANNEX 2
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10. To secure early gains we will implement several prior actions, and to assist with
subsequent monitoring of the fiscal adjustment program, we will set several key steps
as program benchmarks. As prior actions for the program, we will: (i) fully implement
all overdue measures (Annex I); and (ii) enact and implement measures needed to reach the
fiscal deficit target in 2012 (Annex II). The adoption of a budget-neutral tax reform by end-
June 2012, and the completion of reviews of social spending programs and government
functions that identify, respectively, 1½ and 1 percent of GDP in additional measures, are
proposed as structural benchmarks for end-June 2012. Identification and enactment
(where feasible) of all measures necessary to attain the medium-term fiscal target will be an
over-arching condition for completion of the first program review.
B. Fiscal Institutional Reforms
11. Strengthening fiscal institutions is of the utmost importance. Greece has for
many years suffered from a widespread problem of nonpayment of taxes, eroding the
fairness of the system and forcing less growth-friendly policy measures, such as high tax
rates. Meanwhile, the public sector has had difficulties paying its bills and tax refunds on
time, driving up procurement costs and damaging corporate sector liquidity. Putting an end
to these practices will require a deep restructuring of the revenue administration and the
public financial management system. Of course, these are complex institutional reforms, and
gains both in terms of higher revenue and lower spending can only be achieved over time
with resolute efforts. Therefore, we are determined to undertake the needed reforms with
urgency.
12. We are committed to reform our revenue administration. It is not operating at
the level Greece requires, and will need to be overhauled completely. We have started this
process, and made progress over the past two years, but much more remains to be done:
! Strengthening of operations is the near-term priority:
" The dispute resolution system. As upfront actions, we will: (i) approve
legislation making it compulsory for large tax cases to exhaust the administrative
dispute phase before accessing judicial appeals; (ii) tighten rules for waiving the
deposit to access judicial appeals (without prejudice to the independence of the
judicial system); and (iii) issue secondary legislation enabling the certification of
tax arbitrators, making the arbitration system established in 2011 fully
operational.
" Making use of additional tools. We will integrate anti-money laundering tools
into our anti-tax evasion strategy. As upfront actions, we will: clarify the Bank of
Greece’s rules on financial institutions’ obligations to detect and report to the
Financial Intelligence Unit (FIU) transactions suspected of being related to the
proceeds of tax evasion; and take measures to ensure that complaint reports
related to confirmed unpaid tax debts arising from an audit are transmitted to the
prosecution services and to the FIU as required under the system in place.
" Upgrading personnel. Consistent with our operational plans, by April, we will
complete the reassessment and hiring of 1,000 auditors and will gradually bring
the numbers of auditors to 2,000 (consistent with public sector attrition and
hiring rules). For existing employees, we will establish a formal performance
review framework that will specify targets against which to evaluate manager
performance. The framework will be operational by June 2012. We intend to
replace managers that have underperformed their targets.
" Anti-corruption measures. By end-June 2012, we will set up the internal affairs
services established in Law 3943/2011 and reform the role of the financial
inspection unit so as to limit its focus to the revenue administration. We also plan
to improve the system to protect whistle-blowers reporting corruption in the tax
administration, introduce procedures for the rotation of managers, and set targets
for audits of asset declarations of tax administration officials. By end-September,
we will prepare a fully-fledged anti-corruption plan.
! Over time, we need to restructure the administration to create an independent but
accountable tax administration, with a functional organization centered in a strong
headquarters. Towards this end, for 2012 our priorities include:
" Establishing key functional units. The major units have been set up, including
the large taxpayer unit, the debt collection unit and the audit department.
Looking ahead, our priority is to build capacity in these directorates. In 2012, by
end-March we will increase the staff of the debt collection directorate by 50, and
by the second quarter, we will complete the doubling of the audit capacity of the
large taxpayer unit.
" Consolidating tax administration operations. We plan to close a total of
200 underutilized local tax offices by end-December 2012.
" Securing greater control over local tax offices. By end-March 2012 the GSTC
headquarters will set operational targets for local tax offices for core activities
including audits, dispute resolution and filing, and performance targets for local
managers against which they will be assessed. The GSTC headquarters will be
given legal powers to direct how local tax office resources must be used.
Additionally, collection of large debts will be placed under direct central control
and consolidated in the largest 35 tax offices. Processing of all tax payments in
local offices will be discontinued by end-September 2012 and replaced by
mandatory bank transfers, and payments at banks.
European Commission ANNEX 2
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" Steps towards independence. By end-March, we will appoint as Secretary
General of the revenue administration an individual with an impeccable track
record of tax compliance and with significant experience in tax matters. To
support independent decision-making, we will delegate from the ministerial to
the administrative level, via a ministerial decision, the control over core business
activities and human resource management. We will ensure that at the same time
activities of the tax administration headquarters will be externally audited.
! Collection of social security contributions will be strengthened. We will
undertake a thorough review of current collection and enforcement practices,
drawing on external assistance. A fully articulated reform plan will be developed by
end-September 2012, which will, among other things, lay out a timeline and set of
intermediate steps to fully integrate tax and contribution collections. In the near
term, to help stem recent deep problems with social security collections, by March
2012 we will expand monthly declarations to a wider range of large taxpayers, unify
the collection of tax and social security contribution debts of the largest tax debtors,
enact common audits of tax and social security contribution of large taxpayers,
increase the number of inspections and establish targets for inspectors.
! The government undertakes to fully enforce the tax code, and to forego any tax
amnesties. We commit not to implement any new or extend any existing amnesties
or incentive schemes for the collection of taxes and social security contributions.
Given the importance of making this regime change, we will amend law 4038/2012
to restrict the extension of payment terms for tax debt and overdue social security
contributions and the suspension of criminal prosecution and asset freezing, in line
with good international practices.
13. We are determined to secure tighter control over all general government
spending and to prevent the accumulation of arrears. This will require improving every
step of our spending process: budgeting procedures; commitment-based spending controls;
and fiscal reporting and budget monitoring:
! Budgeting. To improve budgeting at both the medium and short term horizons, we
will: (i) issue a circular during Q1 2012 regulating the calendar, deadlines, and the
role of all institutions in formulating the next MTFS (covering 2012–6); and (ii)
adopt legislation and regulations by October 2012 to streamline submission and
approval procedures of within-year supplementary budgets.
! Spending controls. Once fully established, commitment-based spending controls,
and the architecture accompanying them, will help us to prevent units both at the
central and decentralized level from overspending their budgets. There are two near-
term issues, and a set of next steps for the remainder of the program:
! Commitment registers. By March 2012, we will begin to extend registers to
cover the investment budget. By June 2012, we will increase the number of fully
functional commitment registers reporting on the e-portal of the Ministry of
Finance to 70 percent of spending units, including in local governments, social
security funds, extra budgetary funds, and hospitals. We will also consistently
enact sanctions (when needed) to improve data reporting from commitment
registers, and expand the content of the e-portal reporting system to include the
whole expenditure cycle (e.g. cumulative appropriations released, commitments
made, invoices received, and payments made at the end of each month).
! Accounting officers. We have appointed permanent accounting officers in all
line ministries. The officers will be responsible for line ministries’ financial
management, including budget formulation, spending controls, and data
reporting. The accounting officers will be obliged to adopt and implement new
organizational plans for their directorates by end-June 2012.
! Revised audit procedures. Looking forward, we will focus on the progressive
devolution of financial responsibility to accounting officers and reforming the
functions of financial audit offices in line ministries and the Court of Audit. This
will involve a shift away from preventive audits towards ex-post quality audits,
and reconfiguration of our financial information systems.
! Fiscal reporting. More comprehensive, timely, and accurate reports will help us
better monitor budget execution and spot problems early. To this end, in 2012 we
will: (i) expand our arrears data base to cover tax refunds, and establish standards for
their processing and payment (by end-June 2012); (ii) make operational by end-
March the inter-ministerial committee to monitor, control, and report on the
implementation of the social budget; and (iii) expand the recently piloted
information systems to collect more detailed revenue and spending data from general
government entities (the new system will cover more than 90 percent of spending by
end-June 2012).
! Clearance of domestic arrears. We expect to clear our existing domestic arrears in
line with available program financing. The 2012 budget includes a budget
appropriation, based on the end-2011 outturn, and conditions to access it will include
the verification of arrears claims, compliance with basic financial management
reforms (as described above), and that line ministries and general government
entities requesting access demonstrate that they have not accumulated any further
arrears and have reported at least three months of consistent data from commitment
registers.
European Commission ANNEX 2
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14. We will further strengthen the Greek statistical agency, El.Stat. We will revise
the statistics law to reform El.Stat’s governance arrangements. The law will establish the
El.Stat Board as advisory, and clarify the professional authority of El.Stat’s president as the
institution’s chief officer and coordinator of the national statistical system.
15. We are taking prior actions to secure early gains, and to track progress during
the program. As prior actions for the program, we will implement various measures to
strengthen tax administration operations, including meeting end-2011 performance targets,
reversing a recent amnesty, tightening administrative regulations, and strengthening
delegation of powers to the revenue administration (Annex III). Looking ahead, we have set
and will monitor targets for quantified quarterly performance indicators for revenue
administration and public financial management (see the Technical Memorandum of
Understanding for a full description of the indicators; the targets for end-June 2012 and end-
December 2012 are proposed as structural benchmarks). Beyond these indicators, an
additional structural benchmark will focus on the completion of the strategy for
strengthening social security collections (by end-September 2012).
C. Financial Sector Policies
16. The government is committed to provide the support needed to restore
confidence in the Greek banking system. The combination of the deepening recession and
government debt restructuring will require significant government support to ensure the
soundness of the banking system and to maintain depositor confidence. Well-targeted
recapitalization and resolution actions will be needed, alongside legal changes to facilitate
the strategy and improve the financial oversight framework. With the actions specified, the
Greek authorities intend to support banking system liquidity, and create a viable and well-
capitalized private banking sector that can support the economic recovery and sustainable
growth. Depositors will be protected.
17. The financial sector reform strategy comprises several key elements:
! An assessment of capital needs. All banks will be required to achieve a core tier 1
capital ratio set at 9 percent by end-September 2012, reaching 10 percent in June
2013. The BoG, with the support of external consultants, will undertake an
assessment of banks’ capital needs (prior action). This assessment will be based on,
inter alia, the results from the BlackRock loan diagnostic exercise, the PSI impact,
and the business plans banks have submitted. In addition banks’ capital needs will be
determined on the basis of a requirement to maintain a 7 percent core tier 1 capital
ratio under a three year adverse stress scenario (Pillar II requirements). Based on
these capital needs identified by the Bank of Greece, banks will revise their business
plans and submit capital raising plans by end-March 2012.
! In parallel, a strategic assessment of the banking sector will be carried out. In
consultation with the EC/ECB/IMF, the Bank of Greece will conduct a thorough and
rigorous assessment of each bank, using a set of quantitative and qualitative criteria.
The criteria will include in non-exhaustive terms: shareholders’ soundness and
willingness to inject new capital; quality of management and risk management
systems; capital, liquidity, and profitability metrics (both forward and backward
looking); the Bank of Greece’s assigned ratings to bank risks; and a sustainable
business model. The assessment will be complete by end-March 2012 (proposed as a
structural benchmark).
! Agricultural Bank (ATE). Based on the ongoing work by the commissioned
external audit firms, the Ministry of Finance will complete a study on how to address
ATE (as a prior action). This study will illustrate the legal, operational, and
financial aspects of the different solutions and lay out the associated costs.
! Recapitalization and resolution actions.
" Banks will be given time to raise capital in the market. Based on an
assessment of their viability and capital raising plans, the Bank of Greece will
communicate to banks, by end-April, specific deadlines to raise capital in the
market. The deadlines to raise capital will be set for each bank on a case by case
basis—with a maximum duration to end-September—taking into account the
regulatory framework and the requirements set by the Hellenic Capital Market
Commission.
" Banks submitting viable capital raising plans will be given the opportunity to
apply for and receive public support in a manner that preserves private sector
incentives to inject capital and thus minimizes the burden for taxpayers.
Specifically, banks will be able to access capital from the Hellenic Financial
Stability Fund (HFSF) through common shares and contingent convertible
bonds.
" We will ensure that Greek banks have business autonomy both dejure and
defacto. The voting rights of the HFSF for the common shares it holds will be
strictly limited to specific strategic decisions (unless the private participation in
the form of common shares is less than a given minimum percentage of the
bank's total capital needs). This percentage will be defined in the amended HFSF
law. The shares and/or the voting rights acquired by the HFSF shall not be
transferred or sold to any other state-related entity in any form. Private
shareholders will be given incentives to purchase HFSF-held shares. A
ministerial decision in line with EC, ECB and IMF advice shall provide the
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technical details of the banks' recapitalization framework, embodying these
principles, by end-March 2012 (proposed as a structural benchmark).
" Banks that do not submit viable capital raising plans and do not raise the
capital needed to meet the regulatory requirements within the deadline set
by the Bank of Greece will be resolved in an orderly manner and at the lowest
cost to the State, in a way that ensures financial stability and which follows the
overall strategic plan for resolved banking system assets. Resolution options will
include the tools available under the law such as, inter alia, purchase and
assumption (transfer order), interim credit institution (bridge banks), and orderly
wind down.
! Follow up. To ensure that the system remains well-capitalized, the Bank of Greece
will by end-June 2013 conduct a new stress test exercise, based on end-2012 data,
using a methodology determined in consultation with the EC/ECB/IMF (proposed as
a structural benchmark).
18. We will enact legislation to support our strategy for bank recapitalization and
resolution (prior action):
! Capital adequacy requirements. The banking law (3601) will be amended to
enable the Bank of Greece to set new bank capital standards through regulation, and
the Bank of Greece will introduce regulations to phase in the foreseen increases in
Core Tier 1 requirements.
! Technical aspects of bank resolution. Building on the recent changes in the bank
resolution framework and the experiences gained so far, we will clarify the
procedures and responsibilities for the valuation of assets and liabilities and thus for
the opening balance sheet of the interim credit institutions. We will also clarify that
resolution should proceed in a manner that minimizes costs to the HFSF. In this
context, we will strengthen the framework to ensure that future resolutions initially
use conservative asset valuations of failed banks’ assets, based on fair value, and
subsequently allowing for a proper due diligence and revaluation followed by
complementary asset transfers within a specified time period. We will also identify
the legislative impediments to a flexible management of employment contracts in the
context of bank resolutions and adopt the needed legislative changes to remove
them.
! Recapitalization framework. The HFSF law will be amended to allow the use of
contingent convertible bonds and to provide for restrictions on HFSF voting rights
for a 5 year period. The voting rights of the HFSF for the common shares it holds
will depend on the size of the capital injection by private investors via common
shares. If this injection is below a given minimum percentage of a bank’s total
capital needs (to be defined in the HFSF law), the HFSF will have full voting rights.
The HFSF shall hold its shares for a period of two years, with the possibility to
extend for an additional two years for financial and market stability reasons. If
instead this private injection is larger than this percentage, the HFSF voting rights
will be strictly limited to specific strategic decisions. In this case, the legal
framework will be revised to allow the HFSF to hold bank shares for five years.
! Resolution framework. We will introduce a clear separation of the supervisory,
resolution and restructuring functions. In particular, the legal framework shall vest
resolution responsibilities in a separate department in the BoG and restructuring
responsibilities (pertaining to management of all temporary credit institutions) in the
HFSF. As regards interim credit institutions, the Bank of Greece will continue
pursuing its financial stability role, notably via its supervisory authority, while the
HFSF will continue aiming at safeguarding its investments.
! Framework for managing non-performing loans. Separate from the prior action,
during Q2 2012 we will prepare changes to the legal framework for addressing non-
performing loans and those at risk of becoming non-performing, with input from
international experts and in line with EC/ECB/IMF advice. Any changes will be
guided by several principles, including the need to: target our interventions (and in
line with fiscal and financial sector capacity); preserve the payment culture and
avoid strategic loan defaults; maximize asset recovery; and facilitate market
distinctions between rehabilitation of viable borrowers and the efficient exit from the
economy of non-viable borrowers.
19. The government will ensure that enough financing is available to provide for
recapitalization and resolution needs. Total bank recapitalization needs and resolution
costs are estimated to amount to €50 billion. The timing of transfers to the HFSF will take
into account the expected timeline for bank resolution and recapitalization, and requirements
for continued ECB liquidity support. Funds received via program disbursements will be
deposited in the HFSF’s ring-fenced account.
20. We are committed to preserve continued access to central bank liquidity
support. The Bank of Greece, following Eurosystem procedures and rules, will stand ready
to continue disbursing adequate appropriate emergency liquidity support in a timely manner.
Adequate liquidity support in the near term must be consistent with plans to reduce banks
reliance on exceptional central bank support in the medium term. To this end, medium-term
funding plans will be updated after completion of the recapitalization and restructuring
exercise to ensure that the gradual unwinding of exceptional liquidity support proceeds at a
pace consistent with the program’s macroeconomic, fiscal, and financial framework.
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21. The government will enact legislation to strengthen governance arrangements
in financial oversight agencies (prior action):
! Hellenic Financial Stability Fund:
" The Board of Directors will reorganize the HFSF to introduce legislation to
clarify that the HFSF shall have two departments, responsible for separate
functions:
o A department responsible for managing its ownership interest in banks on
behalf of the government. In this capacity, its mandate shall be to ensure that
the banks under its stewardship operate on a commercial basis and are
restored to a well-functioning and profitable part of the Greek financial
sector, which can eventually be returned to private ownership in an open and
transparent manner.
o A department for management of interim credit institutions (bridge banks),
established following the resolution of non-viable banks. It will undertake
this role in a cost-effective manner, based on a comprehensive strategy
agreed by the BoG, MoF and HFSF, and in compliance with EU state aid
rules. From time-to-time, this function may require funding to accomplish its
restructuring role. Such funding will be reduced, either partly or entirely, by
a contribution from the HDIGF Depositor Branch to the extent of its
obligations for deposit insurance.
" We will introduce legislation to changes the HFSF’s governance structure to
include a General Council and an Executive Board:
o The General Council shall have five members: two members, including the
Chair, with relevant international experience in banking, one other member,
one representative from the MoF, and one member nominated by the BoG.
All members shall be appointed by the Minister of Finance with the approval
of the Euro Working Group (EWG); other than the representative from the
MoF and the nominee from the BoG. EC and ECB observers on the Council
will be maintained.
o The Executive Board shall have three members: two members—one of which
shall be the CEO—with international experience in banking and bank
resolution, and one member nominated by the BoG. All members shall be
appointed by the Minister of Finance with the approval of the EWG. Staff
and officials of the BoG shall not sit on the Board of the HFSF. EC and ECB
observers will be present on the Executive Board.
" We, in consultation with HFSF, will adopt regulations to help the HFSF execute
its mandate with full autonomy and at the same time coordinate effectively with
the MoF. It will cover reporting lines and frequencies, strategic decision-making
(and the involvement of the MoF therein), investment mandate and business
plan, relationship with the MoF (in its role as shareholder in the HFSF), and
remuneration policy.
! Hellenic Deposit & Investment Guarantee Fund. We will strengthen the funding
of the HDIGF Depositor Branch by revising the HDIGF Law to: (i) prescribe that
fees shall be increased if its funds fall below a certain level of coverage of insured
deposits, which should be set taking due account of developments in the financial
system; (ii) ensure adequate diversification of re-deposits of HDIGF funds and to
gradually eliminate re-deposits in covered banks, as developments with the
restructuring of the Greek banking sector permit; and (iii) clarify that the HDIGF’s
status as privileged creditor does not impinge on claims secured with financial
collateral in the sense of the financial collateral directive. With a view to limiting
any real or perceived conflicts of interest we will prohibit HDIGF board membership
for individuals who are actively involved in credit institutions and introduce in the
law strong conflict of interest rules for Board members.
22. We will also reform governance arrangements in the Bank of Greece. In light of
the BoG’s responsibility for resolution, restructuring, and supervision, we will revise the
BoG Statute to provide for collegial decision-making at the level of executives (Governor
and Deputy Governors) and ongoing accountability through internal oversight by
nonexecutives in the General Council (also including oversight in matters other than ESCB-
related tasks). We will also revise the structure and rights of BoG shareholders to eliminate
possible conflicts of interest in the Bank of Greece’s public policy role (e.g. prohibiting
supervised institutions from shareholdings and setting a cap on the number of votes that
each or related private shareholders can exercise). We propose that this become a structural
benchmark for end-December 2012.
D. Privatization
23. Under the program, we aim to accomplish a fundamental shift of public assets
to private sector control. Transferring assets in key sectors of the economy (such as ports,
airports, motorways, energy, and real estate) to more productive uses through privatization
and concessions should help encourage FDI and other private investment, supporting the
economic recovery and long-term growth. It will also help to reduce public debt,
contributing to improved market sentiment over time and supporting Greece’s return to
bond markets. The government is determined to overcome the challenges posed by market
conditions and clean the assets from technical and legal complexities, and the program
defines targets and the steps towards achieving these.
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24. The assets comprising the privatization program have been identified. The list
includes state enterprises, concessions, and real estate (Annex IV) along with any bank
assets either previously owned or to be acquired during the recapitalization process. Given
the assets targeted for sale, the government anticipates €50 billion in proceeds over the
lifetime of the asset sale program, including at least €19 billion through 2015. Because
many of these assets are encumbered, and with current poor market conditions, we expect it
to take time beyond the program period to realize the full amount of proceeds. We will
annually update the expected value of proceeds over the timeframe in question, and to the
extent proceeds fall short of target, we will identify additional assets to be brought into the
program, including stakes in public corporations not now included. In light of the need for
assets to use in and backstop the privatization program, we will not transfer any public
assets to the recently established pension fund SPV (and we will consult with the
EC/ECB/IMF staff on a mutually agreed approach to manage this SPV). The program will
monitor progress towards objectives via quarterly indicative targets.
25. The privatization process for each asset is in general expected to comprise
several stages. This includes most prominently transferring the asset to the privatization
fund and appointing the advisors. Other steps include, restructuring of the asset, filling in
public policy and regulatory policy gaps, design of the tender process, EC clearances (for
procurement, competition and state aid), running the tender, and obtaining all of the
necessary by-law approvals.
26. To move the privatization process forward in 2012, we will take a number of
steps:
! Appointment of advisors. We expect to appoint by end-March 2012 all remaining
advisors for thirteen 2012/13 projects which do not currently have all their advisors.
! Transfer of assets to the privatization fund (HRADF). By end-March 2012, all
assets included in the MTFS will be transferred, except banking shares and loss
making assets which HRADF cannot finance before their privatization (TRAINOSE,
ELVO, EAS). Also the remaining balance of the shares of the two large ports (OLP
and OLTH) will be transferred. Real estate assets will be transferred at HRADF’s
request from the Government Real Estate Company (ETAD). Shares already
transferred or to be transferred to the HRADF will be provided their voting rights in
full so that the HRADF will be able to make all the changes necessary for the swift
privatization of each asset.
! Preparations of state-owned enterprises. We will work with the EU authorities to
obtain clearance for state aid for the lottery, DEPA/DESFA, EAS, OPAP and ODIE,
and develop the necessary regulatory frameworks with assistance from the EU Task
Force for Greece. Ministries and other public bodies will expedite administrative
decisions and/or special legislation to facilitate privatizations.
! Preparation of real estate assets. The government will correct legal and technical
deficiencies, expedite zoning, and issue required permits for real estate assets. It has
requested technical assistance from the Task Force to develop a comprehensive land
registry, and in this context, the HRADF will register 3,000 plots by end-June.
! Policy coordination. The government will formulate new policies regarding the use
of assets (e.g. town planning, REITS) and set up new regulatory authorities and
frameworks (e.g. for water, ports, airports, motorways). The Task Force for Greece
is expected to support the government through technical assistance.
! Offer of assets for sale. We intend to launch some landmark asset sales in the first
half of 2012, such as DEPA/DESFA, HELPE, OPAP, EYDAP, EYATH, and IBC,
and in the second half of the year to proceed with tenders for the ports, airports and
Egnatia Odos motorway.
27. We remain committed to a process insulated from political pressures. The
HRADF has been set up to operate under a mandate to privatize assets at prevailing market
conditions as soon as technically feasible and in an open and transparent manner. Under the
HRADF, assets will be overseen and directed so as to accelerate their transfer to the private
sector. The HRADF will not be able to transfer assets back to the general government, and if
it is determined by the Board that an asset cannot be sold in its current form, it will be sold
in pieces or liquidated. The Fund is able to raise money, on market terms, but cannot grant
liens over any of its assets if this might prevent or delay the relevant assets from being
privatized. The Fund will return all proceeds received to the government without delay.
E. Structural reforms
28. As noted above, the government’s most pressing priority is to restore
competitiveness and economic growth. We recognize a need to significantly accelerate the
implementation of comprehensive and deep structural reforms aimed at boosting
employment, output, and productivity growth by liberalizing labor, product, and service
markets and removing existing barriers in the business environment. However, as these will
likely require some time to fully translate into sustained growth, we will also take upfront
measures to allow a reduction in nominal wages to rapidly close our competitiveness gap
and lay an earlier foundation for sustained growth.
29. The government will take actions to improve the functioning of the labor
market. Rigidities in the labor market are preventing wages from adjusting to economic
conditions and are pushing labor into the informal sector. To protect employment and close
Greece’s competitiveness gap more rapidly, the government intends to target a reduction in
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unit labor costs of about 15 percent during the program period. If the ongoing social
dialogue is unsuccessful in identifying concrete solutions, then to achieve this goal the
government will take legislative measures in the urgent public interest to allow wage and
non-wage costs to adjust as needed. The package of labor market measures that will be
implemented includes:
! Structural measures to level the playing field in collective bargaining. The key
measures we will enact into law (as a prior action) include:
" Length of collective contracts and revisions of the ‘after effects’ of collective
contracts. Changes will specify that: (i) all collective contracts should have a
maximum duration of 3 years; (ii) collective contracts already in place for
24 months or more will expire not later than one year after the law is adopted;
(iii) the grace period after a contract expires is reduced from six to three months;
and (iv) in the event that a new collective agreement cannot be reached after
three months of efforts, remuneration will revert back to the basic wage plus the
following general allowances (seniority, child, education, and hazardous). This
will continue to apply until replaced by terms specified in a new collective
agreement or in new or individual contract.
" Removal of ‘tenure’ in all existing legacy contracts in all companies. The new
legal provision will automatically transform contracts with definite duration
(defined as those expiring upon age limit or retirement) into indefinite duration
contracts for which standard layoff procedures apply.
" A freeze of ‘maturity’ provided by law and/or collective agreements (referring to
all automatic increases in wages dependent on time) until unemployment falls
below 10 percent.
" Elimination of unilateral recourse to arbitration, allowing requests for
arbitration only if both parties consent. At the same time, we will clarify (by law
or circular) that: (i) arbitrators are prohibited to introduce any provisions on
bonuses, allowances, or other benefits, and thus may rule only on the basic wage;
and (ii) economic and financial considerations must be taken into account
alongside legal considerations.
! Adjustment of wage floors. This will help ensure that as the economy adjusts, and
collective bargaining agreements respond, firms and employees do not find
themselves bound at a lower limit (and a limit which is very high in international
comparison):
" We will legislate: (i) an immediate realignment of the minimum wage level
determined by the national general collective agreement by 22 percent at all
levels based on seniority, marital status and daily/monthly wages; (ii) its freeze
until the end of the program period; and (iii) a further 10 percent decline for
youth, which will apply generally without any restrictive conditions (under the
age of 25) (prior action). These measures will permit a decline in the gap in the
level of the minimum wage relative to peers (Portugal, Central and Southeast
Europe). We expect this measure to help address high youth unemployment, the
employment of individuals on the margins of the labor market, and to help
encourage a shift from the informal to the formal labor sector.
" Together with social partners, we will prepare by end-July 2012 a clear timetable
for an overhaul of the national general collective agreement. This will bring
Greece’s minimum wage framework into line with that of comparator countries
and allow it to fulfill its basic function of ensuring a uniform safety net for all
employees.
! Adjustment to non-wage labor costs. To help reduce non-wage costs and foster
employment, we will bring the labor tax wedge in Greece broadly into line with
European peers:
" We will enact legislation to reduce IKA social security contribution rates for
employers by 5 percentage points, and implement measures to ensure that this is
budget neutral. Rates will be reduced only once sufficient measures are in place
to cover revenue losses. The measures to finance rate reductions will be
legislated in two steps. First, as a prior action, we will enact legislation to close
small earmarked funds engaged in non-priority social expenditures (OEK, OEE),
with a transition period not to exceed six months. Second by end-September
2012, we will adjust pensions (with protections for low-income pensioners), and
broaden the base for contribution collections (proposed as a structural
benchmark).
" As an additional measure, by end-September we will prepare jointly with social
partners an actuarial study of first pillar occupational pension schemes in
companies with excessive social security costs (relative to comparable firms or
industries covered by IKA) and finalize a list of concrete proposals to eliminate
this differential in a fiscally neutral manner.
! Follow up work. We will review on an ongoing basis the effects of these measures
on the labor market and unit labor costs and, if necessary, are prepared to take
additional corrective measures to facilitate collective bargaining, in order to ensure
wage flexibility and higher employment. If by end-2012 effects on the labor market
remain elusive, we will consider more direct interventions.
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30. The program will, like our previous program, place deep emphasis on product
and service market reforms. The slow response of inflation to the current crisis, even after
adjusting for taxation and energy prices, suggests that rigidities remain in such markets.
These will need to be addressed in tandem with labor market reforms to facilitate the pass-
through from wages to prices. Our strategy will consist of prioritizing and phasing service
sector reforms while pushing forward with product market reforms:
! Service sector reforms. As a prior action, we will abolish restrictions in 20 high
value and/or highly restricted professions, from the list of professions and economic
activities covered in Annex II of KEPE’s “Second Report on the Impact of
Liberalizing Regulated Professions.” We will also publish the ministerial decision
establishing the road haulage license price in line with administrative costs. Looking
forward, by end-March we will prepare a detailed quarterly timetable for 2012 for
the screening and cleaning of existing legislation prioritized according to economic
performance, and again drawn from Annex II of the KEPE report (completion of this
work by end-2012 is proposed as a structural benchmark). Finally, for professions
where reinstatement of restrictions is required in line with the principles of necessity,
proportionality, and public interest, we will pass the required legislation no later than
end-June and upon consultation with the Hellenic Competition Commission and in
line with EC/ECB/IMF advice.
! Product market reforms. To promote price flexibility, by April 2012 we plan to
screen the retail, wholesale, and distribution sectors and prepare an action plan to
promote competition and facilitate price flexibility in product markets.
31. The government is committed to continue with improvements in Greece’s
business environment. A number of reforms initiated in 2011—fast-tracking investments,
speeding up licensing procedures and facilitating electronic business registration—will be
fully implemented this year. These reforms are key to promoting investment and exports,
and will boost growth once the recovery takes hold.
! By end-March, we will enact and publish legislation facilitating investment and
exports:
" We will enact legislation which: (i) improves the functioning of the fast-track
investment law (by making the framework available to more projects, lowering
fees, and relaxing financing requirements), and (ii) eliminates the registration
requirement in the Export Registry and simplifies export legislation.
" Moreover, we will publish the main secondary legislation required to implement
the licensing laws covering technical professions, manufacturing activities,
business parks, and environmental licensing.
! By end-March we will also establish timetables with the key steps needed to
complete (by end-December) the implementation of an electronic export window, e-
customs, and the new electronic environmental register, as well as to fully
implement the two licensing laws.
32. In support of efforts to improve the business climate, we will advance our
medium-term reform agenda aimed at improving the efficiency of the judicial system.
Greece’s judicial system is highly inefficient, with significant backlogs despite a relatively
large number of courts and judges. Complex judicial procedures, cumbersome execution of
court decisions, lack of transparency, and disconnect between court performance and
budgeting, have negatively affected FDI, other private investment, entrepreneurship,
exports, and employment. In this regard, our efforts will focus on:
! Addressing the case backlog in the courts. We are committed to meet the objectives
and implement the measures specified in our January 2012 work plan for the
reduction of tax cases backlog through setting semi-annual milestones, including by
placing priority on high-value tax cases exceeding €1 million). Regarding the non-
tax case backlog, we have commissioned a study to be completed by end-June, on
the basis of which we will draw up an action plan (by end-August) with specific
targets for the clearance of all backlog cases.
! Speeding Up Case Processing: We plan to speed up civil and administrative case
processing through the adoption (by end-March) of a law aimed at improving the
efficiency of administrative court proceedings (including by streamlining procedures
for group adjudication of similar administrative cases) and requiring submission of
decisions in electronic form by administrative and civil judges.
! Improving the Performance and Accountability of Courts: To improve the
effectiveness of magistrate courts, secondary legislation will be published by end-
May, merging existing courts to reduce their number. To improve transparency, at
end-March the Ministry of Justice will start publishing detailed court information on
its website. This quarterly exercise will initially cover data for tax cases. These
actions will help set the stage for the design (by end-September) of a performance
framework for all courts, including the development of a dependable data
management system, and a workload measurement system.
! Reforming the Code of Civil Procedure: By end-March, we will establish a task
force to review the Code of Civil Procedure so as to bring it in line with international
best practices. By end-June, the task force will issue a concept paper identifying the
core issues and bottlenecks in the pre-trial, trial, and enforcement stages of civil
cases and set out proposed solutions. Following its issuance, we will consult with
domestic and international experts, such that, by end-December, a detailed paper can
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be prepared outlining the main proposals for amendments to the Code of Civil
Procedure.
33. The government will accelerate efforts to improve structural reform
management and monitoring. To this end, by March we will implement a directorate of
planning, management, and monitoring of reforms. Starting with end-March, we will start
publishing on a quarterly basis monitoring indicators for each reform initiative on the
government’s website. Our efforts to carry out our ambitious reform agenda (including for
judicial reform, screening of legislation for closed professions, and using the competition
toolkit to identify rigidities in product markets) will be supported by the Commission’s
Technical Assistance Task Force.
F. Program Financing
34. Greece will face sizable balance of payments financing needs during the
program period. It is expected to take time for Greece to restore sovereign market access,
given the long process of reforms and adjustment ahead, and the projected government debt
trajectory. Given the insufficient level of domestic savings to finance these needs (alongside
private investment), we expect to face sizable balance of payments financing needs in the
period ahead, which we anticipate to be covered through financial support from our
European partners, the IMF, and private sector involvement (PSI) in the form of a
comprehensive debt restructuring operation.
35. We expect private sector involvement (PSI) to help Greece achieve debt
sustainability and to cover a significant portion of our financing gap. While the
measures outlined above would bring about an improvement in the fiscal accounts, they
would not by themselves close the financing gaps and put debt on a sustainable path.
Accordingly, with the assistance of our debt advisors, and after consultations with creditors,
we have launched a comprehensive debt exchange offer, covering a pool of government
debt of €205.6 billion.1 Our program assumes that the financial contribution of the private
sector through the debt exchange, together with the official sector support, will deliver a
debt to GDP ratio of 120 percent by 2020 (given anticipated macroeconomic and policy
developments). We recognize that this financing is essential to the program and securing it
is necessary to give the program financing assurances. We expect the debt exchange offer to
be successfully completed prior to the meeting of the IMF Executive Board to consider our
request for an Extended Arrangement under the EFF.
36. Beyond our request to the Fund for a 4 year EFF from (in an amount of SDR
23.7853 billion, or 2,158.8 percent of quota), we have secured additional financial
resources from our European partners to fill remaining needs. Euro area partners have
committed a total of €144.7 billion over 2012-14. They have also committed to support
1 See: www.greekbonds.gr
Greece for as long as it takes to restore market access, provided Greece implements and
adheres to its policy program. Finally, to ensure that this financing places Greece on a
sustainable debt trajectory, to deliver a debt-to-GDP ratio of about 120 percent by 2020,
with continued declines thereafter, they have committed to: (i) new lending at maturities of
30 years and at close to funding costs, using the EFSF as a financing vehicle; (ii) reduce the
margin of the Greek Loan Facility to a uniform 150 basis points; and (iii) for eurozone
countries where central banks currently hold Greek government bonds in their investment
portfolio, pass on to Greece an amount equal to any future income accruing to their national
central bank stemming from this portfolio until 2020.
G. Program modalities
37. Progress in the implementation of the policies under this program will be monitored
through quarterly reviews and consultations, as well as via quarterly (and continuous)
quantitative performance criteria (PCs) and indicative targets, and structural benchmarks.
These are detailed in Tables 1 and 3. The attached Technical Memorandum of
Understanding (TMU) defines the quantitative performance criteria, indicative targets, and
various benchmarks under the program. Quantitative targets up to end-December 2012 are
PCs. Targets for 2013&15 are indicative and for 2013 will be converted into PCs at the time
of the second review. It is expected that the first and second reviews under the Extended
Arrangement take place by end-June and end-September 2012. A Memorandum of
Understanding (MoU) on specific policy conditionality agreed with the European
Commission, on behalf of the euro-area Member States, specifies additional structural
policies, and sets a precise time frame for their implementation.
38. In the context of the arrangement, the Bank of Greece will undergo an updated
safeguards assessment in accordance with the IMF safeguards policy. Given that Fund
disbursements will be deposited into the government’s single treasury account at the BoG,
the existing Memorandum of Understanding between the Ministry of Finance and the BoG
will be updated.
European Commission ANNEX 2
The economic adjustment programme for Greece
118
Annex I: Pending Fiscal Measures
From the July MTFS
! Government to enact a framework law to reform supplementary pensions, to generate
savings of 0.4 percent of GDP by 2014 (in line with MTFS estimates)
! Issue MDs for the implementation of the business tax (Article 31 of Law 3986)
From the end-October implementation bill
! Issue the 4 pending MDs to fully implement the new wage grid (see TMU)
! Pass law to establish deadline for implementation of the wage grid reform in the general
government and the recovery of wage overpayments since November 1, 2011
! Issue MD to bring down the transfer time from PPC of the property tax proceeds to 10
days after the end of each month
From the November prior actions
! Issue the pending MDs on the closure/merger of extra-budgetary funds
! Update the positive list mechanism to deliver the 2012 savings target of €250 million
Annex II. Measures to reach the 2012 deficit target
! Pass a supplementary budget with a primary deficit target of 1 percent of GDP for 2012
that reflects all of the changes that follow.
! Reduce operational spending of the state by €200 million Adjust other spending by
€280 million: election spending, subsidies for remote areas; allocations for the ministry
of education, (including for service abroad; staff allowance for universities, alternate
teachers in secondary schools; operational spending of high schools); allocation of the
ministry of agriculture; and transfers to entities.
! Reduce pensions in OTE, DEI, ETE, ATE, ETVA, Emporiki, Ex-Olympic Airways and
in all other main pension funds, above the monthly amount of €1,300, by 12 percent,
effective January, 2012. Reduce supplementary pensions between €200–250 by
10 percent, between €250–300 by 15 percent, and above €300 by 20 percent, effective
January 1, 2012.
! Eliminate all family allowances for families with annual incomes above €45,000, with
the exception for families with 5 or more children, effective January 1, 2012.
! Cut domestic investment spending by €400 million relative to the 2012 budget.
! Implement a 1:10 hiring to attrition rule in the state-owned enterprises for 2012.
! In local governments: (i) reduce wages of all political employees by 10 percent
(effective January 1, 2012); and (ii) issue a decision to reduce the number of fixed term
contracts, and to limit the number of these paid from the state budget.
! Take actions (all laws, Ministerial Directives (MDs), and circulars) to limit
overprescribing of pharmaceuticals and reduce generic costs:
" Pass law and issue MDs to set maximum price of generics to 40 percent and for off-
patented products to 50 percent of patented products.
" Reduce profit margins for pharmacies to below 15 percent and wholesale margins to
a maximum of 5 percent. Establish a fixed rate of €30 for all medicine above €200.
Increase rebate for pharmacies with turnover above €35,000 by average 1½ percent.
" Pass law on rebates that will yield €250 million; pass law on an additional rebate
covering 2012–15 to be paid if outpatient pharmaceutical spending (including taxes),
retroactive to January 1, 2012 exceed €240 million per month.
" Make compulsory: electronic prescription for all doctors (and only reimburse
pharmacies for electronic entries); prescriptions of the cheapest product by active
substance; international protocols for 160 diseases, including the 10 most expensive.
European Commission ANNEX 2
The economic adjustment programme for Greece
120
" Update negative list; issue MD to allow for intakes of new brands into the positive
list only if they have been included by two-thirds of EU countries.
Annex III. Upfront Revenue Administration Reforms
Meeting end-2011 targets
! General Secretariat for Tax and Customs to meet end-2011 revenue administration
performance indicators (full scope and VAT audits of large taxpayers).
Amnesty reversal
! Amend the recent “Omnibus bill” to repeal/modify articles 3 and 21 (to eliminate the
extension of payment terms of tax debt, and eliminate the suspension of criminal
prosecution and asset freezing).
Regulations
! Amend the Bank of Greece's decisions on the reporting by financial institutions, to the
Financial Intelligence Unit, of suspicious transactions linked or related to tax evasion
(Decisions 285/2009 and 281/2009) to enhance monitoring and detection mechanisms.
! Take measures to ensure that complaint reports related to confirmed unpaid tax debts
arising from an audit are transmitted to the prosecution services and to the FIU, as
required under the system in place.
! Make it compulsory for large tax cases to exhaust the administrative dispute phase
before accessing judicial appeals.
! Tighten rules concerning suspension of payment of taxes in dispute when accessing
judicial appeals (Article 202, Administrative Procedure Code).
Delegation of powers
! Minister of Finance to issue decisions to delegate from the ministerial to the
administrative level the control powers over core business activities and human resource
management.
! Place under direct control and management of GSTC headquarters the collection of large
debts, and focus activities in the largest 35 tax offices.
Ann
ex I
V.
Pri
vat
izat
ion
Pro
gra
m
Pro
ject
Tra
nsfe
rre
dA
dvis
ors
Inte
rme
dia
te s
tep
s
Pri
va
tiza
tio
n (
lau
nch
)to
Fu
nd
co
ntr
acte
d
I. S
tate
-ow
ne
d e
nte
rpri
se
/sh
are
sa
le
20
12
Q1
Pu
blic G
as (
DE
PA
)!
!C
all f
or
ten
de
r la
un
ch
ed
in
Fe
bru
ary
20
12
.
Q1
Pu
blic G
as (
DE
SFA
)!
!C
all f
or
ten
de
r la
un
ch
ed
in
Fe
bru
ary
20
12
.
Q
1Fo
otb
all B
ett
ing (
OP
AP
)!
!Sta
te a
id c
lea
ran
ce
.
Q2
He
lle
nic
De
fen
se
Syste
ms (
EA
S)
1/
!C
lea
ran
ce
by M
inis
try o
f D
efe
nse
. A
do
pt
restr
uctu
rin
g la
w b
y A
pri
l 2
01
2.
Sta
te a
id c
lea
ran
ce
.
Q2
He
lle
nic
Pe
tro
leu
m (
HE
LP
E)
Ma
rch
20
12
2/
Ma
rch
20
12
Sig
n M
oU
wit
h P
an
eu
rop
ea
n b
y A
pri
l 2
01
2.
Q2
Ath
en
s W
ate
r (E
YD
AP
)!
Ma
rch
20
12
Esta
blish
re
gu
lato
r a
nd
pri
cin
g p
olicy b
y J
un
e 2
01
2.
Exte
nd
co
nce
ssio
n.
Q2
Ho
rse
Ra
cin
g (
OD
IE)
Ma
rch
20
12
2/
!A
do
pt
restr
uctu
rin
g la
w a
nd
esta
blish
tim
e-b
ou
nd
co
nce
ssio
n r
igh
ts b
y M
arc
h 2
01
2.
Sta
te a
id c
lea
ran
ce
.
Q2
Ath
en
s W
ate
r (E
YD
AP
)M
arc
h 2
01
2M
arc
h 2
01
2E
sta
blish
re
gu
lato
r a
nd
pri
cin
g p
olicy b
y J
un
e 2
01
2.
Exte
nd
co
nce
ssio
n.
Q2
Th
essa
lon
iki W
ate
r (E
YA
TH
)M
arc
h 2
01
2M
arc
h 2
01
2E
sta
blish
re
gu
lato
r a
nd
pri
cin
g p
olicy b
y J
un
e 2
01
2.
Exte
nd
co
nce
ssio
n.
Q2
Min
ing a
nd
Me
tallu
rgic
al C
om
pa
ny (
LA
RC
O)
Ma
rch
20
12
2/
!A
do
pt
restr
uctu
rin
g la
w b
y M
arc
h 2
01
2.
Q2
He
lle
nic
Po
st
(ELT
A)
1/
Ma
rch
20
12
Ad
op
t la
w d
ete
rmin
ing t
he
pu
blic s
erv
ice
by F
eb
rua
ry 2
01
2.
Q2
Ca
sin
o M
on
t P
arn
es
1/
Ma
rch
20
12
Sta
te a
id c
lea
ran
ce
.
Q2
Ele
ctr
icit
y C
om
pa
ny (
PP
C)
1/
Ma
rch
20
12
Re
str
uctu
rin
g t
o b
e d
ecid
ed
by J
un
e 2
01
2.
Q3
He
lle
nic
Ve
hic
le I
nd
ustr
y (
ELV
O)
1/
Ma
rch
20
12
Ad
op
t re
str
uctu
rin
g la
w b
y J
un
e 2
01
2.
Q4
Ra
ilw
ays (
Tra
ino
se
)1
/A
ugu
st
20
12
On
go
ing r
estr
uctu
rin
g a
nd
la
st
ph
ase
of
sta
te a
id c
lea
ran
ce
by J
un
e 2
01
2.
Q4
Ath
en
s A
irp
ort
(A
IA)
Ma
rch
20
12
2/
!R
e-a
pp
roa
ch
Ho
ch
tie
f A
irp
ort
s b
y J
un
e 2
01
2.
II.
Co
nce
ssio
ns
20
11
Q4
He
lle
nic
Mo
torw
ays
!M
arc
h 2
01
2C
om
ple
te n
ego
tia
tio
ns.
Ra
tify
ch
an
ge
s in
co
nce
ssio
n.
Esta
blish
re
gu
lato
ry f
ram
ew
ork
by e
nd
-20
12
.
Q4
Sta
te L
ott
ery
!!
Exp
ecte
d f
ina
ncia
l o
ffe
r fr
om
th
e t
hre
e b
idd
ers
by A
pri
l 2
01
2.
20
12
Q2
Egn
ati
a O
do
s!
Ma
rch
20
12
Un
bu
nd
lin
g in
to s
erv
ice
s/m
oto
rwa
y r
igh
ts.
Esta
blish
re
gu
lato
ry f
ram
ew
ork
by e
nd
20
12
.
Q3
Sm
all p
ort
s a
nd
ma
rin
as
1/
!Id
en
tify
po
licy.
Fir
st
lot
of
righ
ts t
ran
sfe
rre
d b
y M
arc
h 2
01
2.
Est.
re
gu
lato
ry f
ram
ew
ork
by S
ep
t. 2
01
2
Q3
Re
gio
na
l a
irp
ort
s
!M
arc
h 2
01
2Id
en
tify
pro
pe
r p
olicy.
Esta
blish
re
gu
lato
ry f
ram
ew
ork
by S
ep
tem
be
r 2
01
2.
Q4
Th
essa
lon
iki P
ort
(O
LT
H)
Ma
rch
20
12
2/
Ma
rch
20
12
Ide
nti
fy p
olicy.
All s
ha
re v
oti
ng r
igh
ts t
ran
sfe
rre
d b
y M
arc
h 2
01
2.
Est.
re
g.
fra
me
wo
rk b
y S
ep
t. 2
01
2
Q4
Pir
ae
us P
ort
(O
LP
)M
arc
h 2
01
2 2
/M
arc
h 2
01
2Id
en
tify
po
licy.
All s
ha
re v
oti
ng r
igh
ts t
ran
sfe
rre
d b
y M
arc
h 2
01
2.
Est.
re
g.
fra
me
wo
rk b
y S
ep
t. 2
01
2
Q4
La
rge
re
gio
na
l p
ort
s1
/M
arc
h 2
01
2Id
en
tify
po
licy.
All s
ha
re v
oti
ng r
igh
ts t
ran
sfe
rre
d b
y M
arc
h 2
01
2.
Est.
re
g.
fra
me
wo
rk b
y S
ep
t. 2
01
2
Q4
So
uth
Ka
va
la G
as S
tora
ge
!M
arc
h 2
01
2C
lea
r le
ga
l o
bsta
cle
s b
y S
ep
tem
be
r 2
01
2.
Min
ing r
igh
ts!
Dig
ita
l d
ivid
en
d
III.
Re
al E
sta
te
20
11
Q4
He
lle
nik
on
1M
arc
h 2
01
2 2
/!
Ad
op
t la
w o
n la
nd
use
by M
arc
h 2
01
2.
20
12
Q1
Sa
le/re
po
N b
uild
ings
!!
Go
ve
rnm
en
t to
sig
n r
en
tal co
ntr
acts
by M
ay 2
01
2.
Tra
nsfe
r cle
an
tit
le t
o t
he
HR
AD
F b
y M
ay 2
01
2.
Q1
Re
al E
sta
te I
BC
Ma
rch
20
12
!Str
ate
gic
en
vir
on
me
nta
l stu
dy.
ESC
HA
DA
to
be
issu
ed
by J
un
e 2
01
2.
3/
Q1
Re
al E
sta
te/A
sti
r V
ou
lia
gm
en
is1
/!
Ne
go
tia
tio
ns w
ith
NB
G.
ESC
HA
DA
to
be
issu
ed
. P
roce
ss le
d b
y N
BG
by J
un
e 2
01
2.
Q1
Re
al E
sta
te/C
assio
pi
Ma
rch
20
12
!M
ove
NA
TO
ra
da
r. E
SC
HA
DA
to
be
issu
ed
by J
un
e 2
01
2.
Q1
Re
al E
sta
te lo
t 1
(A
fan
tou
)1
/!
ESC
HA
DA
to
be
issu
ed
by J
un
e 2
01
2.
Q2
Re
al E
sta
te lo
t 2
1/
!Id
en
tify
asse
ts b
y J
un
e 2
01
2.
Q3
Re
al E
sta
te lo
t 3
1/
!Id
en
tify
asse
ts b
y S
ep
tem
be
r 2
01
2.
So
urc
e:
HR
AD
F u
pd
ate
on
pro
jects
un
de
r d
eve
lop
me
nt.
1/ T
ran
sfe
r o
f a
sse
ts/ri
gh
ts a
t th
e p
oin
t o
f p
riva
tiza
tio
n.
2/ S
ha
res h
ave
alr
ea
dy b
ee
n t
ran
sfe
rre
d, b
ut
no
t ye
t vo
tin
g r
igh
ts.
3/ E
SC
HA
DA
= Z
on
ing a
nd
la
nd
pla
nn
ing p
erm
it.
Tim
ing o
f
To
be
de
term
ine
d
To
be
de
term
ine
d
Table
1.
Gre
ece:
Quart
erly P
erf
orm
ance C
rite
ria (
2012-1
5 P
rogra
m)
(bill
ions o
f euro
s,
unle
ss o
therw
ise indic
ate
d)
2013
2014
2015
Mar-
12
Jun-1
2S
ep-1
2D
ec-1
2D
ec-1
3D
ec-1
4D
ec-1
5
Pro
gr.
1/
Pro
gr.
1/
Pro
gr.
1/
Pro
gr.
1/
Pro
gr.
3/
6/
Pro
gr.
4/
6/
Pro
gr.
5/
6/
Perf
orm
an
ce C
rite
ria (
un
less o
therw
ise in
dic
ate
d)
1.
Flo
or
on the m
odifie
d g
enera
l gove
rnm
ent pri
mary
cash b
ala
nce
-2.5
-6.0
-6.3
-7.0
-0.2
8.8
8.1
2.
Ceili
ng o
n S
tate
Budget pri
mary
spendin
g13.9
29.2
44.4
60.4
52.6
43.8
43.0
3.
Ceili
ng o
n the o
vera
ll sto
ck o
f centr
al g
ove
rnm
ent debt
340
340
340
340
....
..
4.
Ceili
ng o
n the n
ew
guara
nte
es g
rante
d b
y the c
entr
al gove
rnm
ent
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.
Ceili
ng o
n the a
ccum
ula
tion o
f new
ext
ern
al p
aym
ents
arr
ears
on
ext
ern
al debt contr
acte
d o
r guara
nte
ed b
y g
enera
l gove
rnm
ent 7
/0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.
Ceili
ng o
n the a
ccum
ula
tion o
f new
dom
estic
arr
ears
by H
ospita
ls a
nd
Lin
e M
inis
trie
s 7
/0.0
0.0
0.0
0.0
0.0
0.0
0.0
Ind
icati
ve T
arg
ets
7.
Ceili
ng o
n the a
ccum
ula
tion o
f new
dom
estic
arr
ears
by the g
enera
l
gove
rnm
ent 7/
0.0
0.0
0.0
0.0
0.0
0.0
0.0
8.
Flo
or
on p
riva
tization r
eceip
ts 8
/0.0
30.0
31.2
03.2
7.5
11.0
16.0
1/
Cum
ula
tive
ly f
rom
January
1,
2012 (
unle
ss o
therw
ise indic
ate
d).
3/
Cum
ula
tive
ly f
rom
January
1,
2013 (
unle
ss o
therw
ise indic
ate
d).
4/
Cum
ula
tive
ly f
rom
January
1,
2014 (
unle
ss o
therw
ise indic
ate
d).
5/
Cum
ula
tive
ly f
rom
January
1,
2015 (
unle
ss o
therw
ise indic
ate
d).
6/
Indic
ativ
e targ
ets
.
7/
Applie
s o
n a
continuous b
asis
fro
m p
rogra
m a
ppro
val.
8/
Calc
ula
ted o
n a
cum
ula
tive b
asis
fro
m J
anuary
1,
2012 a
nd a
pplie
d o
n a
continuous b
asis
fro
m p
rogra
m a
ppro
val.
2012
Eu
rop
ea
n C
om
mis
sio
n
AN
NEX
ES
Th
e e
co
no
mic
ad
just
me
nt
pro
gra
mm
e f
or
Gre
ec
e
1
24
Table
2.
Gre
ece:
Prior
Actions
Mea
sure
sM
acro
crit
ical
rele
vanc
eS
tatu
s
Fisc
al
1. G
over
nmen
t to
fully
impl
emen
t all
over
due
MT
FS m
easu
res
(Ann
ex 1
).T
o he
lp re
stor
e fis
cal s
usta
inab
ility
.P
ropo
sed.
2. G
over
nmen
t to
enac
t and
impl
emen
t mea
sure
s ne
eded
to re
ach
the
fisca
l def
icit
targ
et in
201
2 (A
nnex
II).
To
help
rest
ore
fisca
l sus
tain
abili
ty.
Pro
pose
d.
3. G
over
nmen
t to
impl
emen
t mea
sure
s to
stre
ngth
en ta
x ad
min
istra
tion
oper
atio
ns (A
nnex
III).
To
impr
ove
tax
colle
ctio
n.P
ropo
sed.
Str
uctu
ral
4. G
over
nmen
t to
legi
slat
e m
easu
res
to le
vel t
he p
layi
ng fi
eld
in c
olle
ctiv
e ba
rgai
ning
, inc
ludi
ng: (
i) re
mov
al o
f the
'afte
r effe
cts'
of
cont
ract
exp
iratio
n; (i
i) re
mov
al o
f 'te
nure
' in
all e
xist
ing
lega
cy c
ontra
cts;
(iii)
a fr
eeze
of '
mat
urity
' in
all p
rivat
e co
ntra
cts;
(iv)
elim
inat
ion
of
com
puls
ory
arbi
tratio
n.
To
prom
ote
com
petit
iven
ess
and
empl
oym
ent.
Pro
pose
d.
5. G
over
nmen
t to
legi
slat
e a
real
ignm
ent o
f the
min
imum
wag
e le
vel d
eter
min
ed b
y th
e na
tiona
l col
lect
ive
agre
emen
t by
22 p
erce
nt;
freez
e it
until
the
end
of th
e pr
ogra
m p
erio
d, a
nd a
furth
er 1
0 pe
rcen
t dec
line
for y
outh
, whi
ch w
ill a
pply
gen
eral
ly w
ithou
t any
rest
rictiv
e
cond
ition
s.
To
prom
ote
com
petit
iven
ess
and
empl
oym
ent.
Pro
pose
d.
6. G
over
nmen
t to
clos
e sm
all s
ocia
l sec
urity
fund
s an
d re
duce
oth
er n
on-p
riorit
y so
cial
sec
urity
spe
ndin
g to
allo
w a
fully
-fund
ed re
duct
ion
in s
ocia
l sec
urity
con
tribu
tion
rate
s.
To
prom
ote
com
petit
iven
ess
and
empl
oym
ent.
Pro
pose
d.
7. G
over
nmen
t to
enac
t sec
onda
ry le
gisl
atio
n es
tabl
ishi
ng li
cens
e pr
ices
for r
oad-
haul
age
in li
ne w
ith a
dmin
istra
tive
cost
s, a
nd to
scr
een
spec
ific
serv
ice
sect
or le
gisl
atio
n an
d re
peal
or m
odify
unn
eces
sary
and
out
date
d re
gula
tions
for a
n ad
ditio
nal 2
0 hi
gh v
alue
and
/or
high
ly re
stric
ted
prof
essi
ons
to e
nsur
e fu
ll co
nsis
tenc
y w
ith th
e la
w li
bera
lizin
g re
stric
ted
prof
essi
ons
(391
9).
To
effe
ctiv
ely
dere
gula
te k
ey s
ervi
ce s
ecto
rs.
Pro
pose
d.
Fina
ncia
l
8. B
ank
of G
reec
e to
und
erta
ke a
com
preh
ensi
ve a
sses
smen
t of b
anks
’ cap
ital n
eeds
.Fi
nanc
ial s
tabi
lity
Pro
pose
d.
9. M
inis
try o
f Fin
ance
to c
ompl
ete
a de
taile
d st
udy
on h
ow to
add
ress
AT
E, b
ased
on
wor
k by
the
com
mis
sion
ed e
xter
nal a
udit
firm
s.Fi
nanc
ial s
tabi
lity
Pro
pose
d.
10. G
over
nmen
t to
enac
t leg
isla
tion
to im
prov
e th
e fra
mew
ork
for r
esol
utio
n an
d re
capi
taliz
atio
n to
: (i)
enab
le th
e B
ank
of G
reec
e to
set
new
ban
k ca
pita
l sta
ndar
ds th
roug
h re
gula
tion,
and
to u
se th
is p
ower
to e
stab
lish
new
Cor
e T
ier 1
requ
irem
ents
; (ii)
rem
ove
impe
dim
ents
to a
flex
ible
man
agem
ent o
f em
ploy
men
t con
tract
s in
the
cont
ext o
f ban
k re
solu
tions
; (iii
) ens
ure
the
use
of c
onse
rvat
ive
asse
t val
uatio
ns
for f
aile
d ba
nks;
(iv)
allo
w th
e us
e of
con
tinge
nt c
onve
rtibl
e bo
nds
in re
capi
taliz
atio
n; (v
) int
rodu
ce th
e po
ssib
ility
of r
estr
ictio
ns o
n H
FSF
votin
g rig
hts;
and
(vi)
vest
reso
lutio
n re
spon
sibi
litie
s in
a s
epar
ate
depa
rtmen
t in
the
BoG
and
sys
tem
ic re
stru
ctur
ing
resp
onsi
bilit
ies
in
the
HFS
F.
To
supp
ort e
ffect
ive
reca
pita
lizat
ion
of b
anks
Pro
pose
d.
11. G
over
nmen
t to
enac
t leg
isla
tion
to im
prov
e th
e fin
anci
al o
vers
ight
fram
ewor
k. In
par
ticul
ar, c
over
ing
refo
rms
to: (
i) es
tabl
ish
two
depa
rtmen
ts in
the
HFS
F m
anda
ted,
resp
ectiv
ely,
to m
anag
e th
e go
vern
men
t's o
wne
rshi
p of
ban
ks a
nd in
terim
cre
dit i
nstit
utio
ns; (
ii)
revi
se th
e H
FSF'
s go
vern
ance
stru
ctur
e to
incl
ude
a G
ener
al C
ounc
il an
d an
Exe
cutiv
e B
oard
; and
(iii)
add
ress
HD
IGF
fund
ing
arra
ngem
ents
, and
to e
limin
ate
poss
ible
con
flict
s of
inte
rest
with
in th
e H
DIG
F.
To
stre
ngth
en g
over
nanc
e ar
rang
emen
ts fo
r
finan
cial
ove
rsig
ht a
genc
ies.
Pro
pose
d.
1
25
Table
3.
Gre
ece:
Pro
posed S
tructu
ral C
onditio
nalit
y—
Str
uctu
ral B
enchm
ark
s
Mea
sure
sM
acro
crit
ical
rele
vanc
eSt
atus
End-
Mar
ch 2
012
1. A
min
iste
rial d
ecre
e sh
all b
e is
sued
to p
rovi
de th
e te
chni
cal d
etai
ls o
f the
ban
ks' r
ecap
italis
atio
n fra
mew
ork
To s
treng
then
fina
ncia
l sec
tor r
esilie
nce
Prop
osed
.
2. B
ank
of G
reec
e to
com
plet
e a
stra
tegi
c as
sess
men
t of b
anks
' bus
ines
s pl
ans.
To s
treng
then
fina
ncia
l sec
tor r
esilie
nce
Prop
osed
.
End-
June
201
2
3. G
over
nmen
t to
adop
t a b
udge
t-neu
tral t
ax re
form
pac
kage
, inc
ludi
ng: (
i) th
e re
peal
of t
he C
ode
of B
ooks
and
Rec
ords
and
its
repl
acem
ent b
y si
mpl
er le
gisl
atio
n; (i
i) th
e el
imin
atio
n of
sev
eral
tax
exem
ptio
ns a
nd p
refe
rent
ial r
egim
es; (
iii) s
impl
ifica
tion
of th
e VA
T an
d
of th
e pr
oper
ty ta
x ra
te s
truct
ure;
(iv)
a m
ore
unifo
rm ta
x tre
atm
ent o
f ind
ivid
ual c
apita
l inc
ome;
and
(v) a
sim
plifi
ed p
erso
nal a
nd
corp
orat
e in
com
e ta
x sc
hedu
le.
To s
impl
ify th
e ta
x sy
stem
, im
prov
e its
effi
cien
cy,
and
broa
den
the
tax
base
.
Prop
osed
.
4. G
over
nmen
t to
com
plet
e th
e re
view
s of
soc
ial s
pend
ing
prog
ram
s to
iden
tify
1 pe
rcen
t of G
DP
in s
avin
gs, w
hile
at t
he s
ame
time
mak
ing
prop
osal
s to
stre
ngth
en c
ore
safe
ty n
et p
rogr
ams.
To h
elp
achi
eve
med
ium
-term
fisc
al ta
rget
s.Pr
opos
ed.
5. G
over
nmen
t to
com
plet
e th
e re
view
s of
pub
lic a
dmin
istra
tion
to id
entif
y 1
perc
ent o
f GD
P in
sav
ings
. To
hel
p ac
hiev
e m
ediu
m-te
rm fi
scal
targ
ets.
Prop
osed
6. G
over
nmen
t to
mee
t qua
ntifi
ed q
uarte
rly p
erfo
rman
ce in
dica
tors
for r
even
ue a
dmin
istra
tion
To im
prov
e ta
x co
llect
ion
Prop
osed
.
7. G
over
nmen
t to
mee
t qua
ntifi
ed q
uarte
rly p
erfo
rman
ce in
dica
tors
pub
lic fi
nanc
ial m
anag
emen
t.To
con
tain
arre
ars
End-
Sept
embe
r 201
2
8. G
over
nmen
t to
com
plet
e th
e st
rate
gy fo
r stre
ngth
enin
g so
cial
sec
urity
col
lect
ions
.To
impr
ove
soci
al s
ecur
ity c
olle
ctio
ns.
Prop
osed
.
9. G
over
nmen
t to
adju
st p
ensi
ons,
with
pro
tect
ions
for l
ow in
com
e pe
nsio
ners
, and
the
soci
al s
ecur
ity c
ontri
butio
n ba
se, t
o pe
rmit
a fu
lly-
fund
ed re
duct
ion
in ra
tes
(cum
ulat
ivel
y 5
perc
ent f
rom
Jan
uary
1, 2
012)
To
impr
ove
unit
labo
r cos
ts a
nd c
ompe
titiv
enes
s
End-
Dec
embe
r 201
2
10. G
over
nmen
t to
mee
t qua
ntifi
ed q
uarte
rly p
erfo
rman
ce in
dica
tors
for r
even
ue a
dmin
istra
tion
To im
prov
e ta
x co
llect
ion
Prop
osed
.
11. G
over
nmen
t to
mee
t qua
ntifi
ed q
uarte
rly p
erfo
rman
ce in
dica
tors
for p
ublic
fina
ncia
l man
agem
ent
To c
onta
in a
rrear
s
12. G
over
nmen
t to
com
plet
e th
e sc
reen
ing
and
clea
ning
of e
xistin
g le
gisl
atio
n co
verin
g th
e lis
t of p
rofe
ssio
ns a
nd e
cono
mic
act
iviti
es
cove
red
in A
nnex
II o
f KEP
E’s
“Sec
ond
Rep
ort o
n th
e Im
pact
of L
iber
alizi
ng R
egul
ated
Pro
fess
ions
.”
To im
prov
e co
mpe
titiv
enes
s Pr
opos
ed.
13. G
over
nmen
t to
refo
rm th
e go
vern
ance
of t
he B
oG, t
o pr
ovid
e fo
r col
legi
al d
ecis
ion-
mak
ing
at th
e le
vel o
f exe
cutiv
es (G
over
nor a
nd
Dep
uty
Gov
erno
rs) a
nd e
xpan
ded
inte
rnal
ove
rsig
ht b
y no
nexe
cutiv
es o
f the
exis
ting
Gen
eral
Cou
ncil,
and
to re
vise
the
stru
ctur
e an
d
right
s of
BoG
sha
reho
lder
s to
elim
inat
e po
ssib
le c
onfli
cts
of in
tere
st in
the
Bank
of G
reec
e’s
publ
ic p
olic
y ro
le.
To s
treng
then
fina
ncia
l sec
tor s
tabi
lity
Prop
osed
.
End-
June
201
3
14. B
ank
of G
reec
e w
ill co
mpl
ete
an a
dditi
onal
ass
essm
ent o
f cap
ital n
eeds
bas
ed o
n en
d-20
12 d
ata.
To a
lign
capi
tal b
uffe
rs to
ban
ks’ i
ndiv
idua
l ris
k
prof
iles
Prop
osed
.
European Commission ANNEXES
The economic adjustment programme for Greece
126
GREECE
Memorandum of Understanding
on
Specific Economic Policy Conditionality
The disbursements of financial assistance to Greece, by the European Financial
Stability Facility (EFSF), are subject to quarterly reviews of conditionality for the
duration of the arrangement. The release of the tranches will be based on observance
of quantitative performance criteria and a positive evaluation of progress made with
respect to policy criteria in Council Decision 2011/734/EU of 12 July 2011 (as
amended; hereinafter the Council Decision), the memorandum of economic and
financial policies (MEFP) and in this Memorandum.
The annex on data provision is part of the Memorandum and how well it has been
respected will be considered in the assessment of compliance.
Greece commits to consult with the European Commission, the ECB and the IMF
staff on the adoption of policies falling within the scope of this Memorandum
allowing sufficient time for review. The Government publishes a quarterly report in
line with Article 4 of the Council Decision.
In line with the conclusions of the euro-area summit of 26 October 2011, the
Government will fully cooperate with the Commission, the ECB and the IMF staff
teams to strengthen the monitoring of programme implementation, and will provide
the staff teams with access to all relevant data and other information in the Greek
administration. However the ownership of the programme and all executive
responsibilities in the programme implementation remain with the Greek
Government.
FISCAL CONSOLIDATION
127
1 FISCAL CONSOLIDATION
Budget implementation
For 2012, the annual general government primary deficit should not exceed
EUR 2 037 million; and for 2013 and 2014 the primary surplus should be at least
EUR 3 652 million and EUR 9 352 million, respectively.
Proceeds from the privatisation of financial and non-financial assets do not substitute
fiscal consolidation efforts and will not be considered when assessing compliance
with the annual general government deficit ceilings established in this memorandum
and in the Council Decision. The bank recapitalisation-related flows will not be
considered in the monitoring of annual general government deficit ceilings
irrespective their recording in the ESA accounts by ELSTAT and Eurostat.
Prior to the first disbursement of the new programme, the Government adopts
the following measures, through a supplementary budget, and other legal acts:
! Reduction in pharmaceutical expenditure by at least EUR 1 076 million, in 2012
by reducing medicine prices (generics, off-patent and branded medicines),
increasing co-payments, reducing pharmacists' and wholesalers' trade margins,
application of compulsory e-prescription by active substance and protocols, the
update of the positive list of medicines and the implementation of a mechanism
of quarterly rebates (automatic claw-back) to be paid by the pharmaceutical
industry. (See below section 2.8).
! Reduction in overtime pay for doctors in hospitals by at least EUR 50 million.
! Reduction in the procurement of military material by EUR 300 million (cash and
deliveries).
! Reduction by 10 percent in the remuneration of elected and related staff at local
level and reduction in the number of deputy mayors and associated staff in 2013
with the aim of saving at least EUR 9 million in 2012 and 28 million in 2013
onwards.
! Reduction in the central government's operational expenditure, and election-
related spending, by at least EUR 370 million (compared to the 2012 budget), of
which at least EUR 100 million in military-related operational expenditure., and
at least EUR 70 million in electoral spending.
! Reduction in operational expenditure by local government with the aim of
saving at least EUR 50 million.
! Frontloading cuts in subsidies to residents in remote areas, and cuts in grants to
several entities supervised by the several ministries, with the aim of reducing
expenditure in 2012 by at least EUR 190 million.
! Reduction in the public investment budget (PIB) by EUR 400 million: this cut
will be implemented through cuts in subsidies to private investments and
nationally-financed investment projects. The reduction in the PIB will not have
any impact on projects that are co-financed by structural funds (uncompleted
project financed by the 2000-06 operational programmes, cohesion fund (2000-
06) projects, 2007-13 operational programmes, and non-eligible expenditure
related to the above projects, including TEN-T projects).
FISCAL CONSOLIDATION
128
! Changes in in supplementary pension funds and pension funds with high average
pensions or which receive high subsidies from the budget and cuts in other high
pensions, with the aim of saving at least EUR 450 million (net after taking into
account the impact on taxes and social contributions).
! Cuts in family allowances for high-income households, with the aim of saving
EUR 43 million.
Prior to the disbursement, the Government also adopts the following pending acts:
! Ministerial Decisions for the implementation of the business tax (minimum levy
on self-employed) provided for Article 31 of Law 3986/2011;
! Ministerial Decisions to complete the full implementation of the new wage grid
in all the pertinent entities, and legislation on the modalities for the recovery of
wages paid in excess from November 2011 afterwards.
By end-June 2012, the Government will legislate an average reduction by 12
percent in the so-called 'special wages' of the public sector, to which the new wage
grid does not apply. This will apply from 1 July 2012 on and deliver savings of at
least EUR 205 million (net after taking into account the impact on taxes and social
contributions).
In order to prepare the measures that will be adopted with the 2013 and 2014
budgets and contribute to meet the fiscal targets, the Government initiates, before
end-February 2012, a review of public spending programmes. This review should
be completed by June 2012. The review will draw on external technical assistance
and will focus on pensions and social transfers (in a manner that will preserve basic
social protection); defence spending without prejudice to the defence capability of
the country; and restructuring of central and local administrations. By the same date
(June 2012), a further rationalization of pharmaceutical spending and operational
spending of hospitals, and of welfare cash benefits will also be specified.
Preliminary results from the spending review will be included in the update of the
medium-term fiscal strategy (MTFS), which will be tabled in Parliament by May
2012.
The Ministry of Finance ensures a tight supervision of expenditure commitments by
the government departments, including extra-budgetary funds, public investment
budget, social security funds and hospitals, local governments and state-owned
enterprises, and an effective tax collection, in order to secure the programme
quantitative criteria.
The Government stands ready to define and enact additional measures, if needed, in
order to respect the budgetary targets.
STRUCTURAL FISCAL REFORMS
129
2 STRUCTURAL FISCAL REFORMS
2.1 Asset management and privatisation
The Government implements the privatisation programme with the aim of
collecting EUR 50 billion in the medium term.
Cumulative privatisation receipts since June 2011 should be at least EUR
5 200 million by end-2012, EUR 9 200 million by end-2013 and, EUR
14 000 million by end-2014.
The Government stands ready to offer for sale its remaining stakes in state-
owned enterprises, if necessary in order to reach the privatisation objectives.
Public control will be limited only to cases of critical network infrastructure.
To ensure that the plan objectives are achieved, the Government will
continuously transfer assets to the Hellenic Republic Asset Development
Fund (HRADF). In particular, the Government will transfer to the HRADF all
the assets that are expected in 2012 and 2013 at the request of the HRADF.
All legal, technical and financial advisors for the privatisations planned for
2012 and 2013 will be appointed by end Q1-2012.
Privatisation is conducted in a transparent manner and will clearly set out
post-privatisation property rights and obligations. For a number of assets,
successful privatisation requires a proper regulatory framework ensuring that
entry in a competitive market is possible after privatisation, consumers are
adequately protected, and privatised assets are deployed in competitive
markets. The conditions for sales or concessions shall avoid the creation of
unregulated private monopolies, prevent any form of discrimination, facilitate
open access, and impose full transparency of accounts.
Intermediate steps for privatisation are specified, including clearing all legal
titles, securing state-aid approval, unbundling assets, respecting public
procurement rules, having a more comprehensive inventory of real estate
assets; reallocating land uses; seeking the council of experts' and audit court's
approvals.
The Government will neither propose nor implement measures which may
infringe the rules on the free movement of capital. Neither the State nor other
public bodies will conclude shareholder agreements with the intention or
effect of hindering the free movement of capital or influence the management
or control of companies. The Government will neither initiate nor introduce
any voting or acquisition caps, and it will not establish any disproportionate
and non-justifiable veto rights or any other form of special rights in privatised
companies. No further special rights will be introduced in the course of future
privatisation projects.
To ensure compliance with the EU Treaty, the Government repeals or
appropriately amends the existing special rights granted to the State in the
STRUCTURAL FISCAL REFORMS
130
process of privatisation. In particular, the Law on Strategic Companies (Law
3631/2008, Art 11) is repealed or appropriately amended. [Q2-2012]
In order to ensure a timely clearance of state-aid issues that could constitute a
hurdle for privatisation:
! the Government appoints an interlocutor formally designated for ensuring
compliance of privatisation with State aid rules by end-Q1 2012.
! the Government,in cooperation with the HRADF, submits by end-Q2
2012, to the Commission information on the financial situation of each
asset that will be privatised in the course of 2012, whether the
privatisation needs to be preceded by restructuring and respective
modalities; liabilities to the state which might hinder the privatisation
process or the final price; legislation which grants an advantage to the
firm (or concessionaire), such as tax discrimination or monopoly status,
etc.; conditions that may be imposed on interested buyers, as well as
conditions on buyers' eligibility; and the method of privatisation planned
(public tender, negotiation with existing shareholders, IPO, etc.). A
similar report will be submitted in Q4-2012 for each asset that is expected
to be launched for privatisation in 2013.
The Government continues compiling and publishing a comprehensive
inventory of state-owned assets, including stakes in listed and non-listed
enterprises and commercially viable real estate and land. The inventory will
be published in successive stages by mid-2012 and end-2012 on the Ministry
of Finance's website.
The Government accelerates state land ownership registration. For this
purpose, the Government (i) prepares a comprehensive asset-inventory
(ii) prepares a special law for the land development of the Hellinikon Area
(iii) clarifies land-use status for the single assets and/or portfolios of assets
that will be assessed and selected for exploitation within 2012. [Q2-2012]
2.2 Reducing waste in public enterprises and other public entities
Tariffs in OASA, OSE Group and Trainose increase by at least 25 percent,
while their business plans are appropriately updated. [Q1-2013]
2.3 Tax policy
The Government will prepare a tax reform that aims at simplifying the tax
system, eliminating exemptions and preferential regimes, including and
broadening bases, thus allowing a gradual reduction in tax rates as revenue
performance improves. This reform relates to the personal income tax,
corporate income tax and VAT, property taxes, as well as social contributions,
and will maintain the relative tax burden from indirect taxes. The reform will
be adopted by June 2012. In March 2012, the Government will announce the
full schedule of intermediate steps until the reform is tabled. These
intermediate steps will include public consultation and appropriate review by
the European Commission, ECB and IMF staff.
STRUCTURAL FISCAL REFORMS
131
By June 2012, the Government will revise the legal values of real estate to
better align them with market prices.
2.4 Revenue administration reforms
Articles 3 and 21 of Law 4038/2012 are amended prior to the disbursement.
The suspension of criminal prosecution and asset freezing is eliminated; the
conditions to extend the instalment plans for overdue taxes and social
contributions are revised so that the instalment plans will only apply to
existing overdue amounts below EUR 10 000 for individuals and EUR 75 000
for corporations. Tax payers applying for an extended instalment plan should
disclose all their financial statements to the tax authorities.
Moreover, during the years covered by the economic adjustment programme,
the Government commits not to adopt new tax amnesties, or extend existing
amnesties for the collection of taxes and social contributions.
The Government will define 'tax refunds in arrears,' set standards for their
processing [Q1-2012] and publish on the web [Q2-2012] monthly data on
these arrears with a lag of 20 days after the end of each month.
In line with the anti-tax evasion action plan, the Government will step up
audits of large-scale tax payers, high-wealth individuals and self-employed. It
will also accelerate the resolution of tax arrears, and better integrate anti-
money laundering tools into the strategy. Progress will be monitored by
quantitative indicators according to targets set under the anti-tax evasion plan
(key performance indicators). These indicators concern completion of full
scope and temporary audits of large taxpayers, of risk-based audits of self-
employed and high wealth individuals and of non-filers. They also involve
collection of assessed taxes and penalties from new audits of large taxpayers,
of the existing stock of tax debt, and increase in the number of registered VAT
taxpayers filing returns.
The achievement of the completion of 75 full-scope audits and 225 VAT
audits of large taxpayers, as targets set in the memorandum of 31 October
2011 for end-December 2011, are prior to the disbursement.
To advance the reforms of revenue administration, the Government:
! increases the staff of the large-taxpayers unit by 40 auditors to step up the
fulfilment of audits in progress [end-March 2012]
! steps up the hiring procedure in order to complete the first wave of auditor
reassessment and hiring (1 000 staff), [end-April 2012] with the objective
to achieve the target of 2 000 tax auditors fully operational by end-2012
within the overall limits for public hiring;
! removes barriers to effective tax administration [June 2012], including a
formal performance review and replacing managers who do not meet
performance targets;
! continues to centralise and merge tax offices; 200 local tax offices,
identified as inefficient, will be closed, by end-2012;
! centralises the management of tax files related to the taxpayers in the list
of big debtors; [Q1-2012]
! revises the procedures to write-off tax debts, so that the administrative
efforts may focus on effectively collective debts, by end-2012;
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! discontinue payments in cash and cheque in tax offices which should be
replaced by bank transfers, so that staff time is freed-up to focus on more
value added work (audit, collection enforcement and taxpayer advice);
[Q2-2012]
! starts to publish on the web key performance indicators for the tax
department; [Q2-2012]
! puts in place a new IT system that interconnects all tax offices.
The preparation of the new IT system involves the following main steps in
relation to the new data centre, web-facing and back-office applications:
! the new data centre hardware is in place and running by end-March 2012;
! 20 more new electronic services and enhancements by end-June 2012.
These concern mainly taxes withheld at source;
! database and application design and implementation, by end-October
2012;
! 8 remaining new electronic services and enhancements by end-December
2012. These concern forms filed late with a fine, real-estate tax, and VAT
administration;
! system and user tests, user training, and migration of all tax offices to the
centralized database: by end-December 2012;
! operational use of the new IT infrastructure by all tax offices: 1 January
2013.
To strengthen the anti-corruption framework for the tax administration, the
Government will:
! reform the financial inspections' unit, which should focus only on auditing
tax collectors and revenue administration issues [June 2012];
! activate an Internal Affairs Directorate [June 2012];
! require the Financial Intelligence Unit to audit annually at least 200 asset
statements of tax officials [June 2012];
! establish procedures for the rotation of managers on a periodic basis [June
2012];
! improve the system to protect whistle-blowers who report corruption
[June 2012];
! prepare a fully-fledged anti-corruption plan [September 2012].
Moreover, the Government will define powers to be delegated from the
political level to the tax administration. These powers will include control over
core business activities and management of human resources. The Government
will also tighten the control of local tax offices by central offices, and fill the
position of Secretary General of Revenue Administration with an external
appointee with appropriate professional experience. [March 2012]
The Government adopts secondary legislation to make arbitration operational
and certifies arbitrators by end-March 2012. By the same date, legislation will
make it compulsory to exhaust administrative dispute phase for large tax cases,
before entering the judicial appeals.
The Code of Books and Records is repealed in its entirety and replaced by
simpler legislation. [not later than June 2012]
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2.5 Public financial management reforms
A plan for the clearance of arrears owed to suppliers by public entities is
published by June 2012 and the Government ensures that the stock of arrears
steadily declines. Clearance of arrears of government entities by the state
budget will be contingent on progress in relation to the commitment registry,
and no additional accumulation of arrears by each public entity. Data on
arrears are published monthly with a lag of not more than 20 days after the
end of each month.
To strengthen expenditure control, the Government:
! continues the process of establishing commitment registries, which should
fully cover the central government by March 2012, and the investment
budget and at least 70 percent of general government units [June 2012])
and extended to other general government entities;
! enforces the obligation of accounting officers to report commitments,
including by enacting sanctions to entities not submitting the data and
disciplinary action for accounting officers; [June 2012]
! adopts legislation streamlining the procedure for submission and approval
of supplementary budgets, [October 2012] and establishes an
administrative calendar for the update of the medium-term fiscal strategy.
[Q1-2012]
2.6 To modernise the public administration
At the central level
By December 2012, and in accordance with the roadmap established, the
Government has to: i) set up a high-level transformation steering group,
chaired by the PM, that will supervise, monitor and ensure the implementation
of administrative reforms; [February 2012] ii) establish a stable structure for
Inter-Ministerial Coordination; [May 2012] iii) create basic horizontal
structures in each Ministry, implementing the relevant procedures with
Budget/Finance [February 2012], Audit, Internal Control, Human Resource
Management, acting under common rules. A framework legislation, to be
drafted in line with the roadmap agreed and adopted, will provide the legal
reference for implementing such a reform.
At the decentralized/regional/local level
A specific roadmap is created, translating all principles of coherence and
efficiency at the central level into the decentralized regional/local level.
[March 2012]
Social programmes
The ongoing functional review on social programmes is finalised by end-
March 2012. The review report will include recommendations to the
Government on the objectives, design and implementation of social policies,
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as well as on the need to keep a balance between achieving savings and
protecting the most vulnerable.
Public sector wages and human resource management
The Government publishes and updates on a quarterly basis its medium-
term staffing plans per department, for the period up to 2015, in line with the
rule of 1 recruitment for 5 exits. The recruitment/exit rule applies to the
general government as a whole. The staffing plans should be consistent with
the target of reducing public employment by 150 thousand in end-2010–end-
2015. If necessary, the Government will enact temporary hiring freezes.
Staff transferred to the Government from either state-owned enterprises or
other entities under restructuring are considered as new recruitments. The
same applies to staff in the labour reserve that is transferred to other
government entities, after screening of professional qualifications by ASEP
under its regular evaluation criteria. The overall intake in the professional
schools (e.g. military and police academies) is reduced to a level consistent
with hiring plans. .
The staffing plans per Ministry and each group of public entities will include
tighter rules for temporary staff, cancellation of vacant job post and
reallocation of qualified staff to priority areas and takes into account the
extension of working hours in the public sector. The staffing plans and
monthly data on staff movements (entries, exits, transfers among entities) of
the several government departments are published on the web. [monthly
starting March 2012]
15 000 redundant staff will be transferred to the labour reserve in the course
of 2012, in connection with the identification of entities or units that are
closed or downsized. Staff in the labour reserve will be paid at 60 percent of
their basic wage (excluding overtime and other extra payments) for not more
than 12 months, after which they will be dismissed. This period of 12 months
may be extended up to 24 months for staff close to retirement. Payments to
staff while in the labour reserve are considered part of their severance
payments.
The Government commissions an expert assessment of the new wage grid.
[Q1-2012] This assessment will focus on the wage drift that is embedded in
the new promotion mechanism. If the assessment reveals any excessive wage
drift, the promotion rules are adjusted before end-2012. No promotion takes
place before the assessment and adjustment to the promotion rules.
The Government sets up an electronic automated system linking the census
data base with the Single Payment Authority (SPA)'s, which will allow for a
more effective coverage, assessment and payment of employees. This system
will be coordinated with other ministries. [Q2-2012]
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Public procurement
Single Public Procurement Authority (SPPA)
The Government issues decisions:
! to appoint the members of the SPPA. [February 2012]
! to provide for the institution and establishment of positions for the SPPA’s
personnel, as well as for the organization of human resources and services
of the Authority in accordance with the provisions of the law on the SPPA.
[March 2012]
! to provide for the Implementing Regulation of the SPPA. [April 2012]
The SPPA starts its operations to fulfil its mandate, objectives, competences
and powers as defined in the law on the SPPA and the Action Plan agreed with
the European Commission in November 2010. [April 2012]
E-procurement
The Government presents a detailed plan for the development of the e-
procurement platform, including its phased roll-out, communication and
training programmes, its target usage levels, and planned revision of the
current legislation (if needed). [Q1-2012]
The Government presents a pilot version of the e-procurement system. [Q2-
2012]
The e-procurement platform is fully operational and ready for use and a
common portal is created for the publication of all procurement procedures
and outcomes. The e-procurement framework is placed under the
responsibility of the SPPA, which supervises its operations. [Q1-2013]
The whole public sector uses the e-procurement platform [Q4-2013] and the
government presents results of the monitoring activities covering year 2013
against the target usage levels. [Q1-2014]
Efficiency of procedures
The Government will move towards more centralised procurement, especially
in the field of health procurement, services and supplies:
The Government identifies a number of potential sectoral Central Purchasing
Bodies (CPB) at central government level. The first CPBs are fully operational
and coordinated by the SPPA. [Q2-2012]
The Government establishes centralised purchasing/framework contracts for
frequently purchased supplies or services at central government level with the
obligation for ministries and central government bodies to source via these
contracts and optional use for regional entities. [Q3-2012]
The Government proposes an Action Plan to establish CPB at regional/local
level, at least one per administrative region. [Q3-2012] Regional/local CPBs
are fully operational and coordinated by the SPPA.
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The Government undertakes a reform of the public procurement system
including works, supplies and services with a view to (a) simplifying,
streamlining and consolidating the body of public procurement legislation, and
(b) rationalising the administrative structures and processes in public
procurement to desired procurement results in terms of efficiency and efficacy.
The review starts from an analysis of the state of play (flowcharts, procedural
phases, actors involved, timelines, statistics). A first Action Plan for the reform
is developed in agreement with the European Commission. [Q2-2012]
Government presents drafts of the necessary legislative and organisational
measures to implement the above-mentioned Action Plan to the European
Commission. [Q4-2012]
The Government undertakes a thorough review of the system of redress
against award procedures with the objective of (1) reducing the significant and
frequent delays triggered by excessive use and lengthy processing of redress in
public procurement procedures and of (2) assessing the role to confer to the
SPPA in this area. The Government proposes an Action Plan in agreement
with the European Commission. [Q2-2012]
Quality of statistics
The ongoing strengthening of the European Statistical System includes the
introduction of Commitments of Confidence in Statistics, to be signed by all
Member States. The Government will sign such a Commitment, which will be
endorsed by Parliament, prior to the disbursement. This Commitment
includes the revision of the Statistical Law to reform the ELSTAT governance
arrangements and establish the ELSTAT Board as an advisory body, and to
clarify further the professional authority of the ELSTAT President as chief
officer and coordinator of the national statistical system.
2.7 To complete the pension reform
Prior to the disbursement, the Government proceeds, through a framework
law, with an in-depth revision of the functioning of secondary/supplementary
public pension funds.
The aim of the revision is to stabilise pension expenditure, guarantee the
budgetary neutrality of these schemes, and ensure medium- and long-term
sustainability of the system. The revision achieves:
! the elimination of imbalances in those funds with deficits;
! the unification of all existing funds;
! reduction of overall operational and payroll costs including an adequate
reduction in staff headcount (by at least 30 percent) in the new single fund;
! the long-term sustainability of secondary schemes through a strict link
between contributions and benefits.
The reform of the secondary/supplementary schemes is designed in
consultation with the European Commission, ECB and IMF staff, and its
estimated impact on long-term sustainability is validated by the EU Economic
Policy Committee. The parameters of the new secondary notional defined-
contribution system ensure long-term actuarial balance, as assessed by the
National Actuarial Authority. [Q1-2012]
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The individual pension benefit will be calculated on the basis of (i) a notional
rate of return linked to the rate of growth of the wage bill of insured workers;
(ii) a sustainability factor that adjust benefits to promptly eliminate any future
imbalances should they occur. [Q1-2012]
The Government will reduce nominal supplementary pension benefits starting
from January 2012 to eliminate deficits. The new single fund sets up in a cost
effective way a computerised system of individual pension accounts. [Q1-
2012]
The Government identifies the schemes for which lump sums paid on
retirement are out of line with contributions paid, and adjusts the payments.
[Q1-2012]
The Health Committee set up by Law 3863/2010 will produce a first quarterly
report of its activities aimed at revising the disability status and reduce the
disability pensions to not more than 10 percent of the overall number of
pensions. [Q1-2012]
The Bank of Greece commits not to grant pension privileges to its staff and to
revise the main parameters of its pension scheme, so that they remain aligned
to those of IKA.
The Government will ensure that social security's assets, including the
liquidity that results from the ongoing debt exchange is invested in
government bills, deposits in Treasury, or any other instrument that
consolidates in government debt.
2.8 To modernise the health care system
The Government continues to implement the comprehensive reform of the
health care system started in 2010 with the objective of keeping public health
expenditure at or below 6 percent of GDP, while maintaining universal access
and improving the quality of care delivery. Policy measures include reducing
the fragmented governance structure, reinforcing and integrating the primary
healthcare network, streamlining the hospital network, strengthening central
procurement and developing a strong monitoring and assessment capability
and e-health capacity.
The Government continues the efforts undertaken in 2010-11 and intensifies
measures to reach savings in the purchasing (accruals basis) of outpatient
medicines of close to EUR 1 billion in 2012 compared to the 2011. This will
contribute to the goal of bringing average public spending on outpatient
pharmaceuticals to about 1 percent of GDP (in line with the EU average) by
end-2014.
More specifically, the following measures are implemented:
Governance
To strengthen health system governance, improve health policy coherence,
reduce fragmentation in the purchasing of health services and reduce
administrative costs, the Government further concentrates all health-related
decision making procedures and responsibilities (including payroll
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expenditures) under the Ministry of Health by at the latest June 2012. In order
to do this, the Government prepares a plan and the necessary legislative
changes by end-February 2012. As part of this concentration process, all
health insurance funds are merged into EOPYY and come under the
responsibility of the Ministry of Health. EOPYY buys services in a cost
effective way from NHS facilities and private providers through contracts. All
other welfare / social assistance schemes under the Ministry of Health are
moved to the Ministry of Labour by at the latest June 2012.
From January 2013 EOPYY will purchase hospital services on the basis of
prospective budgets following the development of costing of procedures by
treatment/ pathology categories (full absorption cost DRGs).
As a result of the concentration process, EOPYY rationalises the number of
contracts with private doctors so as to bring down the doctor-to-patients ratio
close to the much lower EU average. [Q2-2012]
Contributions paid by OGA members are progressively equalised to those of
other members of EOPYY, as envisaged in the medium-term fiscal strategy.
The process of equalisation of contributions will be completed in 2013.
Controlling pharmaceutical spending
In order to achieve EUR 1 billion of reduction in outpatient pharmaceutical
spending in 2012, the Government will simultaneously implement a set of
consistent policies comprising changes in pricing, prescribing and
reimbursement of medicines that enhance the use of less expensive medicines,
control prescription and consumption and prosecute misbehaviour and fraud.
The Government defines a consistent set of incentives and obligations for all
participants along the medicines supply chain (including producers,
wholesalers, pharmacies, doctors and patients) to promote the use of generic
medicines.
The Government will revise the co-payment system in order to exempt from
co-payment only a restricted number of medicines related to specific
therapeutic treatments. [Q1-2012]
Pricing of medicines
The Government continues to update, on a quarterly basis, the complete price
list for the medicines in the market, using the new pricing mechanism based on
the three EU countries with the lowest prices. [Q1-2012]
The Government introduces an automatic claw-back mechanism (quarterly
rebate) on the turnover of pharmaceutical producers which guarantees that the
outpatient pharmaceutical expenditure does not exceed budget limits. [Q1-
2012]
Starting from Q1-2012, the pharmacies' profit margins are readjusted and a
regressive margin is introduced - i.e. a decreasing percentage combined with
flat fee of EUR 30 on the most expensive medicines (above EUR 200) - with
the aim of reducing the overall profit margin to below 15 percent.
Government produces an implementation report on the impact of the new
profit margins by Q1-2013. If it is shown that this new model to calculate
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profit margins does not achieve the expected result, the regressive margin will
be further revised.
Starting from Q1-2012, the wholesalers' profit margins are reduced to
converge to 5 percent upper limit.
Prescribing and monitoring
The Government
! takes further measures to extend in a cost-effective way the current e-
prescribing to all doctors, health centres and hospitals. E-prescribing is
made compulsory and must include at least 90 percent of all medical acts
covered by public funds (medicines, referrals, diagnostics, surgery) in both
NHS facilities and providers contracted by EOPYY and the social security
funds. [Q1-2012]
! introduces a temporary and cost-effective mechanism (until all doctors are
able to use the e-prescription system) which allows for the immediate and
continuous monitoring and tracking of all prescriptions not covered by e-
prescription. This mechanism will make use of the web-based e-
prescription application established by IDIKA, which allows the
pharmacies to electronically register manual prescriptions from a specific
doctor to a specific patient. For medicines to be reimbursed by EOPYY
(and other funds), pharmacies must register in the web-based application
all manual prescriptions. For this service, doctors who prescribe manually
will be charged a monthly administrative fee by EOPYY to compensate
the pharmacies. The introduction of this temporary mechanism would
ensure that all prescriptions are electronically recorded, allowing for the
full and continuous monitoring of doctors' prescription behaviour, their
compliance with prescription guidelines. [February 2012]
! continues publishing prescription guidelines/protocols for physicians.
Starting with the guidelines for the most expensive and/or mostly used
medicines the government makes it compulsory for physicians to follow
prescription guidelines. Prescription guidelines/protocols are defined by
EOF on the basis of international prescription guidelines to ensure a cost-
effective use of medicines and are made effectively binding. [Q1-2012]
! enforces the application of prescription guidelines also through the e-
prescription system, therefore discouraging unjustified prescriptions of
most expensive medicines and diagnostic procedures. [Q1-2012]
! produces (Ministry of Health and EOPYY together with the other social
security funds until they merge) detailed monthly auditing reports on the
use of e-prescription in NHS facilities and by providers contracted by
EOPYY and other social security funds (until they merge). These reports
are shared with the European Commission, ECB and IMF staff teams.
[Q1-2012]
! implements (Ministry of Health and EOPYY together with the other social
security funds until they merge) an effective monitoring system of
prescription behaviour. They establish a process to regularly assess the
information obtained through the e-prescribing system. [Q2-2012]
! produces regular reports, at least on a quarterly basis, on pharmaceutical
prescription and expenditure which include information on the volume and
value of medicines, on the use of generics and the use of off-patent
medicines, and on the rebate received from pharmacies and from
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pharmaceutical companies. These reports are shared with the European
Commission, ECB and IMF staff teams. [Q1-2012]
! provides feedback and warning on prescription behaviour to each
physician when they prescribe above the average of comparable
physicians (both in NHS facilities and contracted by EOPYY and other
social security funds until they merge) and when they breach prescription
guidelines. This feedback is provided at least every month and a yearly
report is published covering: 1) the volume and value of the doctor's
prescription in comparison to their peers and in comparison to prescription
guidelines; 2) the doctor's prescription of generic medicines vis-à-vis
branded and patent medicines and 3) the prescription of antibiotics. [Q2-
2012]
! enforces sanctions and penalties as a follow-up to the assessment and
reporting of misconduct and conflict of interest in prescription behaviour
and non-compliance with the EOF prescription guidelines. Continuous or
repeated non-compliance with the prescription rules will lead to the
termination of the contract between the doctor and the EOPYY and the
doctor’s permanent loss of his/her capability/right to prescribe
pharmaceuticals which are reimbursed by the government/EOPYY in the
future. [Q1-2012]
! continuously updates the positive list of reimbursed medicines using the
reference price system developed by EOF. [Q1-2012]
! selects a number of the most expensive medicines currently sold in
pharmacies, to be sold in hospitals or EOPYY pharmacies, so as to reduce
expenditure by eliminating the costs with outpatient distribution margins,
and by allowing for a strict control of the patients who are being
administered the medicines. [Q1-2012]
If the monthly monitoring of expenditure shows that the reduction in
pharmaceutical spending is not producing expected results, additional
measures will be promptly taken in order to keep pharmaceutical consumption
under control. These include a prescription budget for each doctor and a target
on the average cost of prescription per patient and, if necessary, across-the-
board further cuts in prices and profit margins and increases of co-payments.
[Q2-2012]
In compliance with EU procurement rules, the Government conducts the
necessary tendering procedures to implement a comprehensive and uniform
health care information system (e-health system). [Q1-2012]
Increasing use of generic medicines
A comprehensive set of measures is adopted simultaneously to promote the
use of generic and less expensive medicines. The aim of these measures is to
gradually and substantially increase the share of the generic medicines to reach
35 percent of the overall volume of medicines sold by pharmacies by end-
2012, and 60 percent by end-2013. This will be achieved by:
! reducing the maximum price of the generic to 40 percent of the price of
the originator patented medicine with same active substance at the time its
patent expired. This is set as a maximum price; producers can offer lower
prices, thus allowing an increased competition in the market. [Q1-2012]
! automatically reducing the prices of originator medicines when their
patent expires (off-patent branded medicines) to a maximum of 50 percent
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of its price at the time of the patent expiry. Producers can offer lower
prices, thus allowing an increased competition in the market. [Q1-2012]
! creating dynamic competition in the market for generic medicines through
price reductions of at least 10 percent of the maximum price of each
generic follower. [Q4-2012]
! associating a lower cost-sharing rate to generic medicines that have a
significantly lower price than the reference price for reimbursement (lower
than 40 percent of the reference price) on the basis of the experience of
other EU countries, while increasing substantially the co-payment of more
expensive medicines in the reference category and of new molecules. [Q1-
2012]
! deciding about the reimbursement of newly patented medicines (i.e. new
molecules) on the basis of objective criteria and, until internal capacity is
in place, by relying on best practice health technology assessment of their
cost-effectiveness carried out in other member states, while complying
with Council Directive 89/105/EEC. [Q1-2012]
! excluding from the list of reimbursed medicines those which are not
effective or cost-effective, also on the basis of the experience of other
countries. [Q1-2012]
! making it compulsory for physicians to prescribe by international non-
proprietary name for an active substance, rather than the brand name. [Q1-
2012]
! mandating the substitution of prescribed medicines by the lowest–priced
product of the same active substance in the reference category by
pharmacies (compulsory "generic substitution"). [Q1-2012]
The Government takes further measures to ensure that at least 40 percent of
the volume of medicines used by public hospitals is made up of generics with
a price below that of similar branded products and off-patent medicines. This
should be achieved, in particular by making compulsory that all public
hospitals procure pharmaceutical products by active substance, by using the
centralised tenders procedures developed by EPY and by enforcing
compliance with therapeutic protocols and prescription guidelines. [Q2-2012]
The Government, pharmaceutical companies and physicians adopt a code of
good conduct (ethical rules and standards) regarding the interactions between
pharmaceutical industry, doctors, patients, pharmacies and other stakeholders.
This code will impose guidelines and restrictions on promotional activities of
pharmaceutical industry representatives and forbids any direct (monetary and
non-monetary) sponsorship of specific physicians (sponsorship should be
attributed through a common and transparent allocation method), based on
international best practice. [Q1-2012]
The Government simplifies administrative and legal procedures, in line with
EU legal frameworks, to speed up the entry of cheaper generic medicines in
the positive list. [Q2-2012]
Pricing and use of diagnostic services
Fees for diagnostic services contracted to private providers are reviewed with
the aim of reducing related costs by EUR 45 million in 2012. [Q1-2012]
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The government starts publishing a quarterly report on the prescription and
expenditure of diagnostic tests. [Q1-2012]
NHS (ESY) service provision
The plan for the reorganisation and restructuring is implemented for the short
and medium term with a view to reducing existing inefficiencies, utilising
economies of scale and scope, and improving quality of care for patients. The
aim is to reduce further hospital operating costs by 8 percent in 2012. This is
to be achieved through:
! increasing the mobility of healthcare staff (including doctors) within and
across health facilities and health regions.
! adjusting public hospital provision within and between hospitals within the
same district and health region.
! revising the activity of small hospitals towards specialisation in areas such
as rehabilitation, cancer treatment or terminal care where relevant.
! revising emergency and on-call structures.
! optimise and balance the resource allocation of heavy medical equipment
(e.g. scanners, radiotherapy facilities, etc.) on the basis of need.
A first annual report comparing hospitals performance on the basis of the
defined set of benchmarking indicators will be published by end-March 2012.
Wages and human resource management in the health care sector
The Government updates the existing report on human resources conducted by
the Ministry of Health to present the staff structure according to specialty. This
report will be updated annually and will be used as a human resource planning
instrument. The 2012 report will also present plans for the allocation and re-
qualification of human resources for the period up to 2013. It will also provide
guidance for the education and training system and it will specify a plan to
reallocate qualified and support staff within the NHS with a focus in particular
on training and retention of primary care healthcare professionals and hospital
nurses. [Q3-2012]
The revised payment system used by EOPYY for contracting with physicians,
and the efficiency gains in the use of staff (including reduction in overtime
costs) will lead to savings of at least EUR 100 million in the overall social
security costs associated with wages and fees of physicians in 2012. [Q4-
2012]
Accounting and control
Internal controllers are assigned to all hospitals and all hospitals adopt
commitment registers. [Q1-2012]
By end-March 2012, the Government publishes the monthly report with
analysis and description of detailed data on healthcare expenditure by all social
security funds with a lag of three weeks after the end of the respective month.
This report will make it possible a detailed monitoring of the budget execution,
by including both expenditure commitments/purchases (accruals basis) and
actual payments (cash basis). The report will also (1) describe performance of
entities on execution of budget and accumulation of arrears, (2) highlight any
defaulters, and (3) recommend remedial actions to be taken. [Q1-2012]
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EOPYY and other social security funds (until they merge) start publishing an
annual report on medicine prescription. The annual report and the individual
prescription reports examine prescription behaviour with particular reference
to the most costly and most used medicines. [Q1-2012]
Hospital computerisation and monitoring system
The necessary tendering procedures are carried out by HDIKA to develop the
full and integrated system of hospitals' IT systems. [Q1-2012]
Throughout 2012, further measures are taken to improve the accounting, book-
keeping of medical supplies and billing systems, through:
! the introduction of analytical cost accounting systems and the regular
annual publication of balance sheets in all hospitals. [Q2-2012]
! the calculation of stocks and flows of medical supplies in all the hospitals
using the uniform coding system for medical supplies developed by the
Health Procurement Commission (EPY) and the National Centre for
Medical Technology (EKEVYL) for the purpose of procuring medical
supplies. [Q1-2012]
! timely invoicing of full treatment costs (including staff payroll costs) - i.e.
no later than 2 months to other EU countries and private health insurers for
the treatment of non-nationals/non-residents. [Q2-2012]
! enforcing the collection of co-payments and implementing mechanisms
that fight corruption and eliminate informal payments in hospitals. [Q2-
2012]
ELSTAT starts providing expenditure data in line with Eurostat, OECD and
WHO databases i.e. in line with the System of Health Accounts (joint
questionnaire collection exercise). [Q1-2012]
The programme of hospital computerisation allows for a measurement of
financial and activity data in hospital and health centres. Moreover, the
Minister of Health defines a core set of non-expenditure data (e.g. activity
indicators) in line with Eurostat, OECD and WHO health databases, which
takes account of the future roll-out of DRG (diagnostic-related groups)
schemes in hospitals. [Q1-2012] The programme of hospital computerisation
will continue the development of a system of patient electronic medical
records. [Q3-2012]
In all NHS hospitals, the Government pilots a set of DRGs, with a view to
developing a modern hospital costing system for contracting (on the basis of
prospective block contracts between EOPYY and NHS). To support the
development of DRGs, the government develops clinical guidelines and
assesses existing international examples of DRG-base schemes, in particular
considering observations on DRG costing and proportionality of DRG-based
tariffs. DRGs include a detailed item on costs of personnel. [Q3-2012]
An analysis will be made of how hospital accounting schemes integrate DRGs
at hospital level in view of future activity-based cost reporting and prospective
budgets payment for hospitals [Q3-2012]
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144
Centralised procurement
Government continues centralised procurement through EPY and regional
procurement through the Regional Health Authorities, with the aim of
increasing substantially the number of expenditure items and therefore the
share of expenditure covered by centralised tender procedures. [Q4-2012]
EPY will undertake a major effort to utilise tender procedures for framework
contracts for the most expensive medicines used in the outpatient context so as
to substantially reduce the price paid by EOPYY. [Q4-2012]
Government puts in place the procurement monitoring mechanism. [Q1-2012]
Independent task force of health policy experts
The Independent Task Force of Health Policy Experts, established as an
advisory group, produces an annual report on the implementation of reforms.
[Q4-2012]
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145
3 FINANCIAL SECTOR REGULATION AND SUPERVISION
Assessment of capital needs
All banks will be required to achieve a core tier 1 capital ratio set at 9 percent
by Q3-2012, reaching 10 percent in Q2-2013. The Bank of Greece, with the
support of external consultants, will undertake a comprehensive assessment of
banks’ capital needs prior to disbursement. This assessment will be based on,
inter alia, the results from the BlackRock loan diagnostic exercise, the PSI
impact, and the business plans banks have submitted. In addition, banks’
capital needs will be determined on the basis of a requirement to maintain a
7 percent core tier 1 capital ratio under a three-year adverse stress scenario
(pillar II requirements), Based on these capital needs identified by the Bank of
Greece, banks will revise their business plans and submit capital raising plans
by Q1-2012.
A strategic assessment of the banking sector will be carried out. In
consultation with the Commission, ECB and IMF staff, the Bank of Greece
will conduct a thorough and rigorous assessment of each bank, using a set of
quantitative and qualitative criteria. The criteria will include in non-exhaustive
terms: shareholders’ soundness and willingness to inject new capital; quality
of management and risk management systems; capital, liquidity, and
profitability metrics (both forward and backward looking); quality of Bank of
Greece’s assigned ratings to bank risks; and a sustainable business model. The
assessment will be completed by Q1-2012.
Based on the ongoing work by the commissioned external audit firm, a study
will be completed prior to disbursement on how to address ATE. The study
will illustrate the legal, operational and financial aspects of the different
solutions and lay out associated costs.
Recapitalization and resolution actions.
Banks will be given time to raise capital in the market. Based on an assessment
of their viability and capital raising plans, by end-April 2012, the Bank of
Greece will communicate to banks specific deadlines to raise capital in the
market. The deadlines to raise capital will be set for each bank on a case by
case basis, with a maximum duration by to Q3-2012, taking into account the
regulatory framework and the requirements set by the Hellenic Capital Market
Commission.
Banks submitting viable capital raising plans will be given the opportunity to
apply for and receive public support in a manner that preserves private sector
incentives to inject capital and thus minimizes the burden for taxpayers.
Specifically, banks will be able to access capital from the Hellenic Financial
Stability Fund (HFSF) through common shares and contingent convertible
bonds.
The Government will ensure that Greek banks have business autonomy both
de jure and de facto. The voting rights of the HFSF for the common shares it
holds will be strictly limited to specific strategic decisions (unless the private
participation in the form of common shares is less than a given minimum
percentage of the bank's total capital needs). This percentage will be defined in
the amended HFSF law. The shares and/or the voting rights acquired by the
HFSF shall not be transferred or sold to any other state-related entity in any
FINANCIAL SECTOR REGULATION AND SUPERVISION
146
form. Private shareholders will be given incentives to purchase HFSF-held
shares. A ministerial decree agreed in consultation with the European
Commission, ECB and IMF staff shall provide the technical details of the
banks' recapitalisation framework, embodying these principles, by Q1-2012.
Banks that do not submit viable capital raising plans and do not raise the
capital needed to meet the regulatory requirements within the deadline set by
the Bank of Greece will be resolved in an orderly manner and at the lowest
cost to the State, in a way that ensures financial stability and which follows the
overall strategic plan for resolved banking system assets. Resolution options
will include the tools available under the law such as, inter alia, purchase and
assumption (transfer order), interim credit institution (bridge banks), and
orderly wind down.
To ensure that the system remains well-capitalized, by Q2-2013, the Bank of
Greece will conduct a new stress-test exercise, based on end-2012 data, using
a methodology determined in consultation with the Commission, ECB and
IMF staff.
Legislation will be enacted prior to disbursement to support the strategy for
bank recapitalisation and resolution:
! Capital adequacy requirements. The banking law (3601) will be amended
to enable the Bank of Greece to set new bank capital standards through
regulation, and the Bank of Greece will introduce regulation to phase in
the foreseen increases in Core Tier 1 requirements.
! Technical aspects of bank resolution. Building on the recent changes in the
bank resolution framework and the experiences gained so far, the
authorities will clarify the procedures and responsibilities for the valuation
of assets and liabilities and thus for the opening balance sheet of the
interim credit institutions. The authorities will also strengthen the
framework to ensure that future resolutions initially use conservative asset
valuations of failed banks’ assets, based on fair value, and subsequently
allowing for a proper due diligence and revaluation followed by
complementary asset transfers within a specified time period. The
authorities will also identify the legislative impediments to a flexible
management of employment contracts in the context of bank resolutions
and adopt the needed legislative changes to remove them.
! Recapitalisation framework. The HFSF law will be amended to allow the
use of contingent convertible bonds and to provide for restrictions on
HFSF voting rights for a 5-year period. The voting rights of the HFSF for
the common shares it holds will depend on the size of the capital injection
by private investors via common shares. If this injection is below a given
minimum percentage of a bank's total capital needs (to be defined in the
HFSF law), the HFSF will have full voting rights. The HFSF shall hold its
shares for a period of two years, with the possibility to extend for an
additional two years for financial and market stability reasons. If instead
this private injection is larger than this percentage, the HFSF voting rights
will be strictly limited to specific strategic decisions. In this case, the legal
framework will be revised to allow the HFSF to hold bank shares for 5
years.
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147
! Resolution framework. The Government and the Bank of Greece will
introduce a clear separation of the supervisory, resolution and
restructuring functions. In particular, the legal framework shall vest
resolution responsibilities in a separate department in the Bank of Greece
and restructuring responsibilities (pertaining to management of all
temporary credit institutions) in the HFSF. As regards interim credit
institutions, the Bank of Greece will continue pursuing its financial
stability role, notably via its supervisory authority, while the HFSF will
continue aiming at safeguarding its investments.
The Government will ensure that enough financing is available to provide for
recapitalization and resolution needs. Total bank recapitalization needs and
resolution costs are estimated to amount to EUR xx billion. The phasing will
be determined taking into account the expected timeline for bank resolution
and recapitalization, and requirements for continued ECB liquidity support.
The Bank of Greece is committed to preserve continued access to central bank
liquidity support. The Bank of Greece, as a member of the Eurosystem, stands
ready to disburse adequate liquidity support in a timely manner. Adequate
liquidity support in the near term must be consistent with plans to reduce
banks reliance on exceptional central bank support in the medium term. To this
end, medium-term funding plans will be updated after completion of the
recapitalization and restructuring exercise to ensure that the gradual unwinding
of exceptional liquidity support proceeds at a pace consistent with the
program’s macroeconomic, fiscal, and financial framework.
Prior to the disbursement, the Government will enact legislation to
strengthen governance arrangements in financial oversight agencies:
! Hellenic Financial Stability Fund:
The Government will revise the legal framework to clarify that the HFSF
shall have two departments, responsible for separate functions:
o A department responsible for managing its ownership interest in
banks on behalf of the Government. In this capacity, its mandate
shall be to ensure that the banks under its stewardship operate on a
commercial basis and are restored to a well-functioning and
profitable part of the Greek financial sector, which can eventually
be returned to private ownership in an open and transparent
manner.
o A department for management of interim credit institutions
(bridge banks), established following the resolution of non-viable
banks. It will undertake this role in a cost-effective manner, based
on a comprehensive strategy agreed by the Bank of Greece,
Ministry of Finance and HFSF, and in compliance with EU state
aid rules. From time-to-time, this function may require funding to
accomplish its restructuring role. Such funding will be reduced,
either partly or entirely, by a contribution from the HDIGF
Depositor Branch to the extent of its obligations for deposit
insurance.
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148
The Government will revise the HFSF’s governance structure to include a
General Council and an Executive Board:
o The General Council shall have five members: two members,
including the Chair, with relevant international experience in
banking, one other member, one representative from the Ministry
of Finance, and one member nominated by the Bank of Greece.
All members shall be appointed by the Minister of Finance with
the approval of the Euro Working Group (EWG); other than the
representative from the Ministry of Finance and the nominee from
the Bank of Greece. European Commission and ECB observers on
the Council will be maintained.
o The Executive Board shall have three members: two members—
one of which shall be the CEO—with international experience in
banking and bank resolution, and one member nominated by the
Bank of Greece. All members shall be appointed by the Minister
of Finance with the approval of the EWG. Staff and officials of
the Bank of Greece shall not sit on the Board of the HFSF.
The Government, in consultation with the HFSF, will adopt regulations to
help the HFSF execute its mandate with full autonomy and at the same
time coordinate effectively with the Ministry of Finance. It will cover
reporting lines and frequencies, strategic decision-making (and the
involvement of the Ministry of Finance therein), investment mandate and
business plan, relationship with the Ministry of Finance (in its role as
shareholder in the HFSF), and remuneration policy.
! Hellenic Deposit and Investment Guarantee Fund.
The Government will strengthen the funding of the HDIGF Depositor
Branch by revising the HDIGF Law to: (i) prescribe that fees shall be
increased if its funds fall below a certain level of coverage of insured
deposits, which should be set taking due account of developments in the
financial system; (ii) ensure adequate diversification of re-deposits of
HDIGF funds and to gradually eliminate re-deposits in covered banks, as
developments with the restructuring of the Greek banking sector permit;
and (iii) clarify that the HDIGF’s status as privileged creditor does not
impinge on claims secured with financial collateral in the sense of the
financial collateral directive and follows best practice with respect to
secured creditors in general. With a view to limiting any real or perceived
conflicts of interest, HDIGF board membership will be prohibited for
individuals who are actively involved in credit institutions and introduce in
the law strong conflict of interest rules for Board members.
The Bank of Greece will carry out a new insurance sector analysis to evaluate
insurers’ solvency under Solvency I and Solvency II risks of defaults based on
the Q3-2012 results. Clear obligations will be established in law concerning
the governance, role and tasks of the Greek Motor Auxiliary Insurance
guarantee funds in Greece to ensure that they it can comply with their its
obligations related to compensation of car accidents’ victims, by Q2-2012 .
The Bank of Greece will evaluate, by Q1-2013, the capacity of the insurance
sector to assume social security/pension schemes. taking into consideration the
under development Solvency II regime for institutions for occupational
FINANCIAL SECTOR REGULATION AND SUPERVISION
149
pensions (IORP Directive). In this regard, the Bank of Greece will establish a
list of additional changes in legislation/structure of Greek insurance industry
and the relevant legislation will be adopted by Q2-2014.
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4 GROWTH-ENHANCING STRUCTURAL REFORMS
4.1 To ensure a rapid adjustment of the labour market and strengthen labour
market institutions
Given that the outcome of the social dialogue to promote employment and
competitiveness fell short of expectations, the Government will take measures to
foster a rapid adjustment of labour costs, fight unemployment and restore cost-
competitiveness, ensure the effectiveness of recent labour market reforms, align
labour conditions in former state-owned enterprises to those in the rest of the private
sector and make working hours arrangements more flexible. This strategy should
aim at reducing nominal unit labour costs in the business economy by 15 percent in
2012-14. At the same time, the Government will promote smooth wage bargaining at
the various levels and fight undeclared work.
Exceptional legislative measures on wage setting
Prior to the disbursement, the following measures are adopted:
! The minimum wages established by the national general collective agreement
(NGCA) will be reduced by 22 percent compared to the level of 1 January 2012;
for youth (for ages below 25), the wages established by the national collective
agreement will be reduced by 32 percent without restrictive conditions.
! Clauses in the law and in collective agreements which provide for automatic
wage increases, including those based on seniority, are suspended.
Reforms in the wage-setting system
The Government will engage with social partners in a reform of the wage-setting
system at national level. A timetable for an overhaul of the national general
collective agreement will be prepared by end-July 2012. The proposal shall aim at
replacing the wage rates set in the NGCA with a statutory minimum wage rate
legislated by the government in consultation with social partners.
Measures to foster the re-negotiation of collective contracts
Prior to the disbursement, legislation on collective agreements is amended with a
view to promoting the adaptation of collectively bargained wage and non-wage
conditions to changing economic conditions on a regular and frequent basis. Law
1876/1990 will be amended as follows:
! Collective agreements regarding wage and non-wage conditions can only be
concluded for a maximum duration of 3 years. Agreements that have been
already in place for 24 months or more shall have a residual duration of 1 year.
! Collective agreements which have expired will remain in force for a period of
maximum 3 months. If a new agreement is not reached, after this period,
remuneration will revert to the base wage and allowances for seniority, child,
education, and hazardous professions will continue to apply, until replaced by
those in a new collective agreement or in new or amended individual contracts.
Raising the potential of recent labour market reforms
! Prior to the next disbursement, legislation is revised so that arbitration takes
place when agreed by both employees and employers. The government will
clarify that arbitration only applies to the base wage and not on other
remuneration, and that economic and financial considerations are taken into
account alongside legal considerations.
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! Moreover, by October 2012, an independent assessment of the working of
arbitration and mediation shall be prepared, with a view to improve the
arbitration and mediation services in order to guarantee that arbitration awards
adequately reflect the needs of wage adjustment.
Legacy issues and special labour conditions
! Prior to the disbursement, clauses on tenure (contracts with definite duration
defined as expiring upon age limit or retirement) contained in law or in labour
contracts are abolished.
! The Government carries out an actuarial study of first-pillar pension schemes in
companies where the contributions for such schemes exceed social contribution
rates for private sector employees in comparable firms/industries covered in
IKA. Based on this study, the Government reduces social contributions for these
companies in a fiscally-neutral manner [Q3-2012].
Non-wage labour costs, fighting undeclared work and social contribution evasion
The Government will enact legislation to reduce social contributions to IKA by 5
percentage points and implement measures to ensure that this is budget neutral.
Rates will be reduced only once sufficient measures are in place to cover revenue
losses. The measures to finance rate reductions will be legislated in two steps. First,
as a prior action, legislation will be enacted to close small earmarked funds engaged
in non-priority social expenditures (OEK, OEE), with a transition period not to
exceed 6 months. Second, by end-September 2012, the government will adjust
pensions (with protections for low-income pensioners), and adjust the base for
contribution collections.
An independent assessment on the effectiveness of the Labour Inspectorate structure
and activities will be carried out. Corrective actions to tackle the ineffectiveness
found in that assessment will be presented. These may include changes in the
organisation and work of the Labour Inspectorate, reinforced anti-fraud and anti-
corruption mechanisms and reinforced monetary and legal penalties for infringement
of law and labour regulations and for social contribution evasion. Quantitative
targets on the number of controls of undeclared work to be executed will be set for
the Labour Inspectorate [Q2-2012].
A fully articulated plan for the collection of social contribution will be developed by
end-September 2012. Already by end-March 2012, the collection of taxes and
social contributions of the largest tax debtors is unified, and there will be common
audits of tax and social contributions for large payers.
The Labour Card is progressively introduced as of March 2012 and every firm in
specific sectors will be obliged to use it by end-2012. For those firms using the
labour card, the simultaneous payment by electronic means of wages, withheld
payroll taxes and social contributions will be made compulsory. [Q2-2012]
4.2 To improve the business environment and enhance competition in open
markets
Regulated professions
Implementation of Chapter A of Law 3919/2011
Prior to the disbursement, the Government screens and makes the necessary
changes to ensure that the regulatory framework (e.g., laws, presidential decrees,
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152
ministerial decisions, circulars) of the following professions and economic activities
is fully in line with chapter A of law 3919/2011:
! private providers of primary care services i.e., i) private providers of primary
health care (private doctors and dentists' practices; private group doctors' and
dentists' practices; private diagnostic centres; private centres for physical
medicine and rehabilitation); ii) chronic dialysis units other than in hospitals and
clinics; iii) dental laboratories; iv) shops for optical use and contact lenses;
v) physiotherapy centres; vi) beauty salons; vii) slimming/dietary businesses;
! stevedores (loaders for land operations at central markets);
! sworn-in valuators;
! accountants and tax consultants;
! actuaries;
! temporary employment companies;
! private labour consultancy offices;
! tourist guides;
! real-estate brokers.
The Government publishes on its website a report [Q1-2012] on the implementation
of Law 3919/2011, including:
! the list of all professions/economic activities falling under the scope of that law.
! a timetable to screen and eliminate inconsistencies between Chapter A of Law
3919/2011 and the regulations (i.e., laws, presidential decrees, ministerial
decisions and circulars) of professions and economic activities falling under that
chapter. The timetable specifies the list of professions and economic activities
prioritised by economic importance that will be assessed every quarter with a
view to finalizing this exercise by end-2012.
For professions where reinstatement of restrictions is required in line with the
principles of necessity, proportionality and public interest, the Government will pass
the required legislation no later than end-June 2012 upon consultation with the
HCC and the Commission, IMF and ECB staff teams.
Measures for regulated professions falling under chapter B of law 3919/2011
The Government also adopts legislation [Q2-2012] to:
! reinforce transparency in the functioning of professional bodies by publishing on
the webpage of each professional association the following information:
o the annual accounts of the professional association.
o the remuneration of the members of the Governing Board broken down by
function.
o the amounts of the applicable fees broken down by type and type of service
provided by the professional association as well as the rules for their
calculation and application.
o statistical and aggregate data relating to sanctions imposed, always in
accordance with the legislation on personal data protection.
o statistical and aggregate data relating to claims or complaints submitted by
consumers or organisations and the reasons for accepting or rejecting the
claim or the complaint, always in accordance with the legislation on personal
data protection.
o any change in the professional codes of conduct, if available.
o the rules regarding incompatibility and any situation characterised by a
conflict of interests involving the members of the Governing Boards.
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Additional measures on regulated professions
On fixed fees applied by the main regulated professions:
! The Government amends Art. 10 of Presidential Decree 100/2010 on the
authorization process and applicable fees for energy inspectors, to repeal the
minimum fees for energy inspection services provided for thereof and to replace
the fixed fees per square meter by maximum fees. [Q2-2012]
! For the legal profession, the Government issues a Presidential Decree, which
sets prepaid amounts for each procedural act or court appearances (i.e., it sets a
system of prepaid fixed/contract sums for each procedural act or appearance by a
lawyer which is not linked to a specific ‘reference amount’). [Q1-2012]
! The Government carries out an assessment regarding the extent to which the
contributions of lawyers and architects to cover the operating costs of their
professional associations are reasonable, proportionate and justified. [Q1-2012]
! The Government identifies ways of decoupling taxation, social contributions,
distribute funds (if applicable) and payments to the professional associations
from legal fees. [April 2012]
! The Government defines contributions of lawyers and engineers to their
professional associations that reflect the operating costs of the services provided
by those associations. These contributions are paid periodically and are not
linked to prices charged by professions. [Q3-2012]
Revision of the areas of reserve of activities of regulated professions:
! The Government presents the results of screening of the regulations of the
professions to assess the justification and the proportionality of the requirements
reserving certain activities to providers with specific professional qualifications.
[Q2-2012]
! The Government modifies the unjustified or disproportionate requirements
reserving certain activities to providers with specific professional qualifications,
starting from the main regulated professions. [Q3-2012]
Reform of the Code of Lawyers
In the context of the Government's initiative to revise the Code of Lawyers, the
Government amends the terms of entry and re-entry as well as the conditions for the
exercise of the profession. Draft legislation is presented to the European
Commission by end-February 2012 and is adopted by end-June 2012.
Before end-June 2012, legislation is adopted to:
! amend or repeal provisions on pricing and on access to, and exercise of,
professional or economic activities that are against Law 3919/2011, EU law and
competition principles. In particular, legislation:
o repeals Art. 42.1 of Legislative Decree 3026/1954, regarding the mandatory
presence of a lawyer for the drawing up of documents before a notary for a
series of legal transactions;
o repeals Arts. 92.2 and 92A of Legislative Decree 3026/1954 providing for
the minimum amounts and for the scale of minimum monthly amounts that
are due to lawyers that are only remunerated for services rendered with a
fixed periodic fee. This is without prejudice to having fee regulations for
trainee lawyers.
Recognition of professional qualifications
All the necessary measures are taken to ensure the effective implementation of EU
rules on the recognition of professional qualifications, including compliance with
ECJ rulings (inter alia, related to franchised diplomas).
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In particular, the Government:
! keeps updating the information on the number of pending applications for the
recognition of professional qualifications, and sends it to the European
Commission.
! presents draft legislation by end-March 2012, to be adopted by Q2-2012, in
order to remove the prohibition to recognise the professional qualifications
derived from franchised degrees. Holders of franchised degrees from other
Member States should have the right to work in Greece under the same
conditions as holders of Greek degrees.
Services Directive
The Government completes the adoption of changes to existing sectoral legislation
in key services sectors such as retail (e.g. open air markets and outdoor trade),
agriculture (e.g. slaughter houses), employment (employment agencies), real estate
services and technical services (cfr. the section on business environment). The
Government also adopts changes to the remaining sectoral regulation, ensuring full
compliance with the directive.
Regulations should:
! facilitate the establishment by:
o abolishing or amending requirements which are prohibited by the Services
Directive;
o abolishing or amending unjustified and disproportionate requirements,
including those relating to quantitative and territorial restrictions, legal form
requirements, shareholding requirements, fixed minimum and/or maximum
tariffs and restrictions to multidisciplinary activities.
! facilitate the provision of cross-border services, so that providers of cross-border
services are required to comply with specific requirements of the Greek
legislation only in exceptional cases (when admitted by Articles 16 or 17 of the
Services Directive).
! provide legal certainty for providers of cross-border services by setting out in the
respective (sectoral) legislation which requirements can, and which requirements
cannot, be applied to cross-border services.
In particular, the following pending regulations are adopted by Q1-2012:
! Law providing for the possibility of having secondary establishment for private
employment agencies, eliminating fixed maximum rates, abolishing the
requirement of having a minimum number of employees and allowing for the
cross border provision of services of private employment agencies.
! Law on real estate agents.
! Presidential Decree abolishing the economic test for the opening of slaughter
houses.
The Government carries out a proportionality analysis of the restrictions applied on
outdoor / ambulant trade for social policy criteria. [Q1-2012]
The Government also ensures:
! that the Point of Single Contact (PSC) is fully operational in all sectors covered
by the Services Directive;
! that the PSC distinguishes between procedures applicable to service providers
established in Greece and those applicable to cross-border providers (in particular
for the regulated professions);
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! that there is adequate connection between the PSC and other relevant authorities
(including one-stop shops, professional associations and the recognition of
professional qualifications). [Q1-2012]
Studies on price flexibility
The Government screens the main service sectors (including retail and wholesale
distribution) and prepares an action plan to promote competition and facilitate price
flexibility in product markets. [April 2012]
Business environment
Package of reform measures to improve the business environment
The Government adopts a package of measures to improve the business environment
to:
! review and codify the legislative framework of exports (i.e., Law 936/79 and
Law Order 3999/59), abolish the obligation of registration with the exporters’
registry of the Chamber of Commerce and set the framework for the introduction
of a single electronic export window. [Q1-2012]
! amend Arts. 26.2, 43B, 49.1, 49.5, 69.3 and 70.1 of Law 2190/1920, the
corresponding articles in Law 3190/1955 and any other legal provisions to lift
the requirement to publish company information in any kind of newspapers for
companies with a website. This is without prejudice to the publication of
company information in the Official Gazette / GEMI. [Q1-2012]
! repeal Art. 24 of Law 2941/2001, prohibiting the sale of merchandise at prices
below the cost of purchase. This is without prejudice to Art. 2 of Law 3959/2001
on abuse of dominance in the form of predatory pricing and to Law 149/14 on
unfair competition. [Q1-2012]
! lift constraints for retailers to sell restricted product categories such as baby food
provided for in Law 3526/2007 and its implementing legislation. [Q1-2012]
! repeal Art. 9 and 12 of Ministerial Decision A2-3391 concerning the submission
of wholesale price lists, cost elements and contracts to the Ministry of
Development, Competitiveness and Shipping. [Q1-2012]
! amend Art. 22 law 3054/2002 regulating the market of oil products and other
clauses as well as its implementing ministerial decision to fully liberalize petrol
station opening hours, with parallel application of the current system of
compulsory night opening, on a rotating basis, on a certain number of petrol
stations per prefecture outside the normal opening hours. [Q1-2012]
! amend Art. 11(1) of law 3897/2010 to i) reduce the minimum distance provided
for thereof between a petrol station and a place where more than 50 people may
gather; ii) repeal the requirement to have an independent traffic connection for
petrol stations within the area of a hypermarket provided for in Article 11(1) of
Law 3897/2010 and iii) amend Art. 11(6) of the same law to allow EEA citizens
to open a petrol station in Greece. [Q2-2012]
! repeal Art. 12.2 of Law 3853/2010, providing that draft model company statues
will be first proposed by the chambers of notaries and lawyers before the
Ministry of Development, Competitiveness and Shipping can issue the relevant
common ministerial decision provided thereof. [Q1-2012]
! cease to earmark the 0.15 percent surcharge (provided for in the Joint Ministerial
Decision 25323/1960 and in Art. 64 of law 1249/1982) levied on the CIF value
of imported goods from non-EU countries in favour of the Assistance Account
GROWTH-ENHANCING STRUCTURAL REFORMS
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of Foreign Trade. Government allocates the aforementioned amounts to the 2013
State budget. [Q2-2012]
! cease to earmark the 0.5 percent charge provided for in the Emergency Statute
788/48 and in Law 3883/1958 on the value of all imported merchandise in
favour of the National Technical University of Athens, the University of
Thessaloniki, the Athens Academy and for the promotion of exports.
Government allocates the aforementioned amounts to the 2013 State budget.
[Q2-2012]
! cease to earmark the non-reciprocating charge paid via the power public
corporation bill in favour of the executive work provided for in No. T.
4363/1236. Government allocates the aforementioned amounts to the 2013 State
budget. [Q2-2012]
! cease to earmark the non-reciprocating charge calculated on the fuel price in
favour of Mutual Distribution Fund of the Oil-Pump Operators of Liquid Fuel.
Government allocates the aforementioned amounts to the 2013 State budget.
[Q2-2012]
Implementation of law 3982/2011 on the fast track licensing procedure for technical
professions, manufacturing activities and business parks and other provisions
The Government:
! Issues the Joint Ministerial Decision of degrees of nuisance provided for in Art.
20.9 of 3982/2011. [March 2012]
! Issues the Joint Ministerial Decision on standardised environmental terms for
industrial activities provided for in Art. 36.1 of Law 3982/2011. [March 2012]
! Issues the Presidential Decrees on preconditions for obtaining a licence for
industry technicians, plumbers, liquid and gaseous fuel technicians, cooling
technicians and machine operators in constructions provided for in Art. 4.4 of
Law 3982/2011. [March 2012]
! Issues the Presidential Decrees on preconditions for obtaining a licence for
electricians provided for in Art. 4.4 of Law 3982/2011. [May 2012]
! Issues the Presidential Decree on Certified Inspectors provided for in Art. 27.4
of law 3982/2011. [Q2-2012]
! Issues the Joint Ministerial Decision on the process of licencing business parks
provided for in Art. 46.6 of law 3982/2011. [March 2012]
Implementation of Law 4014/2011 on environmental licensing of projects and
activities
The Government:
! Issues the Ministerial Decision provided for in Art. 2.7 of Law 4014/2011 on
environmental licensing of projects and activities, laying down requirements for
the content of the decision approving the environmental conditions according to
the type of project or activity. [Q2-2012]
! Issues the Ministerial Decisions provided for i) in Art. 8.3 of Law 4014/2011 on
environmental licensing of projects and activities (other than industrial
activities), laying down the standard environmental commitments of projects and
activities in category B; and ii) in Art. 2.13 of Law 4014/2011 to further specify
the procedure and specific criteria for environmental licencing. [Q2-2012]
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Business-Friendly Greece
The Government publishes on its website a plan for a Business-Friendly Greece,
tackling remaining restrictions to business activities, investment and innovation not
covered elsewhere in this memorandum. [end-February 2012]
The Government implements the Business-Friendly Greece Action plan. [Q1-2012]
The plan includes measures, among others, in order to:
! complete the setting-up of the General Commercial Registry (GEMI) by
promptly taking measures for the completion of the GEMI database, the further
development of web services and use of electronic signatures, the
interconnection of GEMI to the Chamber's information systems and to the PSC,
in order to ensure access to online completion of procedures both for company
formation and for any administrative procedures necessary for the exercise of
their activities. By July 2012, all companies established in Greece should be
able to publish all relevant company data through GEMI.
! simplify environmental, building and operating permits.
! develop a "single electronic window" centralizing standardized trade-related
information and simplifying the number of documents needed to export.
! address restrictions in the transport sector, including the transport of empty
containers and of non-hazardous waste.
Land registry and spatial planning
The Government accelerates the completion of the land registry, with a view to:
! tendering out all remaining rights (ca. 15 million) and awarding cadastral
projects for 7 million rights. [Q4-2012]
! digitalising the operations of all mortgage and notaries' offices and conveying all
newly registered deeds to the cadastre by 2015.
! exclusively-operating cadastral offices for large urban centres by 2015.
! establishing a complete cadastral register and exclusively operating cadastral
offices nationwide by 2020.
The Government completes the revision of the 12 regional spatial plans to make
them compatible with the sectoral plans on industry, tourism, aquaculture and
renewable energy. [Q4-2012]
The Government adopts legislation to (i) simplify and reduce time needed for town
planning processes; (ii) update and codify legislation on forests, forest lands and
parks. [Q3-2012] It also adopts legislative measures for the management of
industrial hazardous waste [Q2-2012] and licenses at least two disposal sites for
hazardous waste by [Q4-2012].
Other measures to improve the business environment
! Quasi fiscal charges: the list of non-reciprocating charges in favour of third
parties presented to the Commission services in November 2011 is further
refined by i) identifying beneficiaries, ii) specifying the legal base of each
contribution and by iii) quantifying contributions paid by consumers in favour of
those beneficiaries, with a view to rationalize these contributions and/or channel
those through the State budget. [Q2-2012]
! Market regulations: the revision of Ministerial Decision A2-3391/2009 on
market regulations, as well as any other related legislation, is completed [March
2012]. This exercise is carried out in cooperation with the Hellenic Competition
Commission, with a view to identifying administrative burdens and unnecessary
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barriers to competition and developing alternative, less restrictive, policies to
achieve government objectives. The revised Ministerial Decision on market
regulations is adopted in April 2012.
! Screening of business restricting regulations: The Government completes a
structured analysis of how regulation in areas such as permits and licences,
health and safety rules, urban planning and zoning, can unnecessarily restrict
business and competition in important sectors such as food processing, retail
trade, building materials, manufacturing or tourism. Similarly, the government
seeks to simplify business regulations in areas such as new business registration
and regulation of accounting. [Q3-2012] Within 6 months of the completion of
the analysis, the Government will take the necessary legislative or other actions
to remove disproportionate regulatory burdens.
! Planning reform: The Government reviews and amends general planning and
land-use legislation ensuring more flexibility in land development for private
investment and the simplification and acceleration of land-use plans. [Q3-2012]
! Development of an integrated and simplified process for export and customs
formalities. By end-March 2012, the e-customs system supports the electronic
submission of export declarations. By end-December 2012, (i) the e-customs
system supports the electronic submission of import declarations; (ii) pre-
customs procedures (i.e., certificates, licenses as well as steps and actors
involved in the processes) are streamlined according to EU regulations and best
practices; (iii) legislation is aligned with EU regulations and the common rules
for customs procedures at export and import, including the local clearance
procedure; (iv) the level (number) of customs' controls (both physical and
documentary) are also aligned with best practices; (v) the electronic single-
window of exports is launched after the simplification of the pre-customs
procedures and it is interlinked with e-customs to provide a single entry point for
the exporters.
! Security stocks of crude oil and petroleum products: The Government transposes
Directive 2009/119 imposing an obligation on Member States to maintain
minimum stocks of crude oil and /or petroleum products. [Q4-2012]
! An ex post impact assessment is presented in order to evaluate Law 3853/2010
on the simplification of procedures for the establishment of companies in terms
of savings in time and cost to set up a business, as well as to verify that all
secondary legislation is in force. [Q3-2012]
Transport
Road
A report is submitted on the functioning of the regular passenger transport services
(KTEL), presenting options for liberalisation. [Q1-2012]
The transitional period established in Law 3887/2010 for the reduction in costs for issuing
new road transport operator licences has been brought to an end in January 2012. Prior to
the disbursement, the necessary secondary legislation as foreseen in that law (Article
14(11)) is published, specifying the cost for issuing new road transport operator licences.
This cost is transparent, objectively calculated in relation to the number of vehicles of the
road transport operator and does not exceed the relevant administrative cost.
In line with the policy objectives of Law 3919/2011 on regulated professions, the
Government removes entry barriers to the taxis market (in particular, restrictions on the
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number of licences and price of new licences), in line with international best practice. [Q1-
2012]
Ports
The Government defines a strategy to integrate ports into the overall logistics and transport
system, specifying the objectives, scope, priorities and financial allocation of resources.
The strategy will ensure the implementation of the TEN-T priorities and the establishment
of the foreseen corridors. It will also ensure the efficient use of the assigned Structural and
Cohesion Funds [Q2-2012]
Aviation
The Government submits a policy paper, indicating how regional airports will be merged
into groups ensuring that regional airports become economically viable in compliance with
State aid rules, including realistic projections identified by the appointed financial
advisors. [Q2-2012] After ensuring that regional airports are economically viable, the
Government launches an effective transaction strategy leading to their privatisation. [Q4-
2012]
Railways
The rail regulatory authority establishes the procedures for issuing licenses and decisions
affecting non-discriminatory access of EU railway undertakings to Greek rail
infrastructure. It identifies the benchmarking data on the cost effectiveness of the
infrastructure manager. The authority conducts on its own initiative procedures and
respects the legal time lines for such decisions set out in the EU railway Directives,
including cases on international traffic. All operators are awarded licenses and safety
certificates. [Q2-2012]
The Government establishes independent award authorities for passenger services by rail
that can organise competitive tenders. Contracts concluded in 2014 or later will generally
by awarded by means of competitive tender. The rolling stock that is not used/needed by
Trainose should be transferred to a body which leases it on market conditions, including to
winners of such tenders. The documentation for calls for a first bundle of services is ready,
general rules on the ticket prices are established and a decision on the provision of rolling
stock is taken. [Q4-2012]
Energy
Unbundling of network activities
The Government ensures that network activities are effectively unbundled from
supply activities.
In particular, for electricity:
! all the necessary transfers of staff and assets of the transmission system operator
(TSO) are completed; the TSO management, its supervisory body and the
compliance officer are appointed in accordance with the Electricity Directive
2009/72/EC. [February 2012]
! all necessary transfers of staff and assets to the legally unbundled distribution
system operator (DSO) are completed. [Q1-2012]
! the unbundled TSO is certified by the Greek energy regulator. [Q2-2012]
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For gas:
! unbundling is implemented as provided for in Art. 9 of Directive 2009/73/EC on
common rules for the internal market in natural gas. [Q1-2012]
! the unbundled TSO is certified by the Greek energy regulator. [Q3-2012]
The Government commits to launch the privatisation of PPC and DEPA following
the unbundling of the TSOs in line with the commitments of this memorandum and
monitors the process to ensure competition in the market.
The Government undertakes that whichever the outcome of the privatisation process
the gas industry structure will be fully compliant with Directive 2009/73/EC.
Measures to increase competition on the generation of electricity
The Government finalises the remedies to ensure the access of third-parties to
lignite-fired electricity generation. [Q1-2012]
The Government starts implementing the measures ensuring the access by third
parties to lignite-fired electricity generation. [Q3-2012]
The implementation of the measures to ensure access by competitors of PPC to
lignite-fired electricity generation is completed. Third parties can effectively use
lignite-fired generation in the Greek market. [November 2013]
In the context of the privatization of PPC, the Government takes the necessary steps
to be able to sell hydro capacity and other generation assets to investors. That sale is
separate from the divestiture of lignite capacity provided for in the Commission's
decision on the Greek lignite case. Nevertheless, investors may be given the
possibility to buy hydro capacity / other generation assets jointly with the lignite
capacity provided for in that decision. The sale of hydro capacity will i) not delay
the sale of lignite assets beyond the time frame provided for in the relevant
Commission Decision and ii) not prevent the sale of lignite assets without a
minimum price.
Regulated tariffs
Further measures are adopted to ensure that the energy component of regulated
tariffs for households and small enterprises reflects, at the latest by June 2013,
wholesale market prices, except for vulnerable consumers. [Q2-2012]
The Government removes regulated tariffs for all but vulnerable consumers [Q2-
2013]
Renewables
The Government completes the transposition and the implementation of the
renewable energy Directive (2009/28/EC) and submits the progress report required
by the Directive. [Q1-2012]
The Government prepares a plan for the reform of the renewable energy support
schemes such that they are more compatible with market developments and reduce
pressures on public finances. The plan should contain:
! a timetable scheduling meetings and stakeholder discussions on the reform of the
support scheme.
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! options for reform of the support scheme, including a feed in premium model,
and specifying in each option the method of tariff calculation and the means of
avoiding possible over compensation.
! current and expected trends in costs for all relevant technologies.
! consideration of the option of automatic tariff digression.
! measures for the development of wind and solar energy resources. [Q1-2012]
The Government pursues implementation of the renewable energy project 'Helios,'
through legislation [Q1-2012], facilitation of licencing process [Q2-2012] and
cooperation with other EU countries for the export of solar energy.
Other measures
The Government ensures that its regulatory framework for the energy sector fully
complies with the provisions in the Electricity and Gas Regulation, in particular
concerning transparency, congestion management and non-discriminatory and
efficient allocation of capacity on gas and electricity networks. In particular, the
Government commits to resolve all open issues regarding the infringement case
2009/2168 for non-compliance with the Electricity Regulation. This resolution will
include the adoption by the Independent Regulatory Authority (RAE) of a modified
electricity market code and establishing cross-border electricity trading procedures
for the interconnectors with Bulgaria in line with the provisions of Regulation (EC)
714/2009 and its annexes. [Q1 2012]
The Government undertakes to:
! Establish a One-Stop Shop for the licensing and permitting of the following
classes of infrastructure projects [Q4-2012]: LNG installations, natural gas
storage and transmission pipeline projects and electricity transmission lines.
! Establish an LNG code, approved by RAE, which ensures transparency and non-
discriminatory access to the Revithoussa LNG plant and the efficient allocation
of unused capacities. [Q3 2012]
Electronic communications
The Government adopts the Common Ministerial Decision on "Base stations and
antennae constructions that are exempted from authorisation" provided for in Art.
31.8 of Law 3431/2006 and in Art. 29.9 of the draft law on the Regulation of the
functioning of the postal market, matters of electronic communications and other
provisions. [end-February 2012]
The Government adopts the provisions instituting EETT as a One-Stop Shop for the
licensing of antennae and base stations. [end-February 2012]
The Law transposing the 2009 Reform Package (i.e., Directive 2009/140/EC and
Directive 2009/136) is adopted by Parliament. [Q1-2012]
Regarding the Digital Dividend, the Government (and/or EETT):
! defines a legal framework in primary law that envisages a mandatory date for
switch-off of analogue broadcasting for 30/06/2013 and a technologically neutral
utilisation of the 800MHz band after the switch off, taking also into account the
provisions of the draft Radio Spectrum Policy Programme (RSPP). [Q1-2012]
! completes the studies on the evaluation of the value of the Digital Dividend and
on the strategy for the granting of the Digital Dividend (800 MHz band). [Q1-
2012].
! resolves cross-border coordination issues with neighbouring countries. If
difficulties on international coordination make this date unfeasible, the
frequency and broadcasting plans might indicate alternative channels for re-
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162
location of broadcasters, while continuing negotiations with third countries in
view of the final assignment of frequencies to broadcasters and mobile
operators. [Q2-2012]
! launches the consultation for the amendment of the frequency and broadcasting
plans. [Q2-2012]
! amends the frequency and the broadcasting plans, depending on the
outcome/actual state of play of international coordination. [Q3-2012]
! adopts necessary secondary legislation for the assignment of licenses for
broadcasting and for the establishment of licensing procedures, antennae
specifications, etc. [Q3-2012]
! launch the public consultation on the tender procedure for the assignment of the
digital dividend to broadband. [Q4-2012]
! proceed to the tender for the assignment of definitive rights of use for
broadcasting transmission. [Q1-2013]
! proceed to the tender procedure for the assignment of frequencies of the digital
dividend, allocating and authorising the use of the digital dividend (800 MHz
band) to Electronic Communications Services in line with EC Decision
2010/267/EU and in respect of the deadlines and procedures of the RSPP. [Q2-
2013]
R&D and innovation
The Government pursues an up-to-date and in-depth evaluation of all R&D and on-
going innovation actions, including in various operational programmes and existing
tax/subsidy incentives with their costs and benefits. It presents a strategic action plan
for policies aimed at enhancing the quality and the synergies between public and
private R&D and innovation, as well as tertiary education. This action plan identifies
a clear timetable for relevant measures to be taken, taking the budgetary impact into
account and harmonising these actions with other relevant initiatives in these areas,
in particular the investment law. [Q1-2012]
Better regulation
Legislation is adopted to improve regulatory governance [Q1-2012], covering in
particular:
! the principles of better regulation.
! the obligations of the regulator for the fulfilment of those principles.
! the tools of better regulation, including the codification, recast, consolidation,
repeal of obsolete legislation, simplification of legislation, screening of the
entire body of existing regulation, ex-ante and ex-post impact assessments and
public consultation processes.
! the transposition and implementation of EU law and exclusion of gold plating;
! the setting-up of better regulation structures in each ministry as well as the
creation of a Central Better Regulation unit.
! the requirement that draft laws and the most important draft legislative acts
(Presidential Decrees and Ministerial Decisions) are accompanied by an
implementation timetable.
! electronic access to a directory of existing legislation and an annual progress
report on Better Regulation.
! the requirement that the government produces an annual plan with measurable
targets for administrative burden reduction, deregulation and other policies for
the simplification of legislation.
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On impact assessments, legislation provides that:
! implementing legislation with potentially large significant impact is also subject
to the requirement to produce an impact assessment.
! impact assessments address the competitiveness and other economic effects of
legislation by making use of the Commission Impact Assessment guidelines and
the OECD Competition Assessment toolkit.
! the Central Better Regulation Unit can seek the opinion of other ministerial
departments and independent authorities for regulations that fall under their
respective competences so as to improve the quality of impact assessments.
! an independent authority and the Central Better Regulation Unit carry out
quality checks of impact assessments; the independent authority also gives an
opinion on progress made on the governments' better regulation agenda.
! the Central Better Regulation Unit delivers its opinion on the quality of impact
assessments before draft legislation is sent to the Cabinet.
! the Central Better Regulation Unit consults the Hellenic Competition
Commission when formulating and drafting the guidelines to be implemented by
the ministries' better regulation units.
! impact assessments are published.
Under no circumstances will this law impede the passing of urgent legislation during
the duration of the programme.
The Government will set a deadline for the completion of measurements in each of
the priority areas, for the identification of proposals to reduce burdens and for the
amendment of the regulations. This policy initiative should reduce administrative
burdens by 25 percent (compared with the baseline year 2008) in the 13 priority
areas. [February 2012]
4.3 To raise the absorption rates of structural and cohesion funds
The Government meets targets for payment claims and major projects in the
absorption of EU structural and cohesion funds set down in the table below.
Compliance with the targets shall be measured by certified data.
In meeting absorption rate targets, recourse to non-targeted state aid measures is
gradually reduced. The Government provides data on expenditure for targeted and
non-targeted de minimis state aid measures co-financed by the structural funds in
2010 and in 2011. [Q1-2012]
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Table 1: Targets for payment claims in the absorption of Structural and Cohesion
Funds (programming period 2007-2013) to be submitted through 2013 (EUR million)
2012 2013
European Regional Development Fund (ERDF)
and Cohesion Fund 2,850 3,000
European Social Fund (ESF) 880 890
Target of first half of the year 1,231 (*) 1,284
Total annual target 3,730 (**) 3,890
(*) of which, 5 major project applications
(**) of which, 15major projects applications
Legislation is adopted, and immediately implemented, to shorten deadlines and
simplify procedures on contract award and land expropriations, including the
deadlines needed for the relevant legal proceedings. [Q1 2012]
The Government earmarks amounts to:
! complete unfinished projects included in the 2000-06 operational programme
closure documentation (ca. EUR 260 million). [Q2 2012]
! complete the implementation and closure of the 2000-06 cohesion-fund projects.
[Q2 2012]
! cover the required national contribution, including non-eligible expenditure (i.e.
land acquisitions) in the framework of the 2007-13 operational programmes. [Q2
2012]
The Government identifies the necessary amounts from ERDF within the 2007-13
operational programmes for the first allocation to the guarantee mechanism for small
and medium-sized enterprises. [Q1 2012]
The Government ensures that the web-based monitoring tool of procedures for the
approval of project proposals and for the implementation of public projects is
available to the public by February-2012.
Based on the assessment of the measures adopted since May 2010 to accelerate the
absorption of structural and cohesion funds, the Government takes measures to
speed up absorption and to simplify project implementation by i) mapping
responsibilities and removing unnecessary steps; ii) consolidating management
capacities where appropriate (e.g. waste treatment) in accordance with existing
management and control systems. [Q2-2012]
To accelerate the absorption of EU financing and following the increase in the EU
co-financing rates, Government will, by Q1-2012:
! establish appropriate monitoring tools for priority projects. These projects
should be operational by 2015 at the latest.
! report to the Commission the final results of the activation or elimination of
sleeping projects (i.e. projects already approved in the operational programmes
but not yet contracted within the timeframes defined at the national level). For
retained projects, the Government indicates the conditions that must be met to
keep the co-financing.
! create a central database monitoring compensation and the time elapsed for the
completion of expropriations incurred in the framework of the implementation
of projects co-financed by the ERDF and the Cohesion Fund.
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4.4 To upgrade the education system
The Government implements the Action Plan for the improvement of the
effectiveness and efficiency of the education system and regularly reports (twice a
year) on the progress of its implementation, including an indicative planning of self-
evaluations and external evaluations of Higher Education institutions in compliance
with the new Law 4009/2011 on Higher Education. [Q2-2012]
4.5 To reform the judicial system
To improve the functioning of the judicial system, which is essential for the proper
and fair functioning of the economy, and without prejudice to the constitutional
principles and the independence of justice, Government:
(a) ensures effective and timely enforcement of contracts, competition rules and
judicial decisions;
(b) increases efficiency by adopting organisational changes to courts;
(c) speeds up the administration of justice by eliminating backlog of court cases
and by facilitating out-of-court settlement mechanisms.
Specifically, the Government submits the draft law addressing issues of fair trial and
denial of justice to the Greek Parliament, which i.a. encompasses an amendment of
Law 1756/1988 on the organisation of courts and the situation of court officials, and
dissuasive measures against non-cooperative debtors in enforcement cases, with a
view to having it adopted during the current parliamentary term. [Q1-2012]
The Government establishes a task force, which is broadly representative of the legal
community, including but not limited to academia, practising lawyers, in-house
lawyers, and lawyers from other EU Member States established or offering their
services in Greece. This taskforce reviews the Code of Civil Procedure to bring it in
line with international best practice on, inter alia, i) judicial case management,
including the possibility of removing dormant cases from court registers; ii)
relieving judges from non-adjudicatory work, such as pre-mortgaging of immovable
property, formation and dissolution of incorporated entities and consensual/non-
litigious family law applications, iii) the enforcement of decisions and of orders to
pay, in particular small claims cases with a view to reducing the role of the judge in
these procedures, and iv) enforcing statutory deadlines for court processes, in
particular for injunction procedures and debt enforcement and insolvency cases. For
the purposes of this Memorandum, judicial case management means the possibility
of judges to be involved early in identifying the principal factual and legal issues in
dispute between the parties, require lawyers and litigants to attend pre-hearing
conferences and manage the conduct of proceedings and the progression of the case
to achieve the earliest and most cost-effective resolution of the dispute. [Q1-2012]
In order to facilitate the work of the existing task force mandated to design a
performance and accountability framework for courts, the Government will compile
and publish the information indicated in Annex 2.
The Government presents a qualitative study on recovery rates in enforcement
proceedings, evaluating the success rates and the efficiency of the various modes of
enforcement. [Q2-2012]
The Government decides on the date by when it will open the access to the regulated
profession of mediator to non-lawyers in line with the conditionality on regulated
professions and presents an action plan ensuring that non-lawyers may offer
mediation services starting from that date. [Q1-2012]
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Following on the submission of the work plan for the reduction of the backlog of tax
cases in all administrative tribunals and administrative courts of appeal in January
2012, which provides for intermediate targets for reducing the backlog by at least 50
per cent by end-June 2012, by at least 80 per cent by end-December 2012 and for the
full clearance of the backlog by end-July 2013, the Government presents by end-
May 2012 and thereafter once a quarter, updated and further refined work plans
(ensuring that priority is placed on high value tax cases –i.e., exceeding €1 million-)
and takes remedial action in case of anticipated or actual deviations.
The task force mandated to review the Code of Civil Procedure to bring it in line
with international best practice will prepare a concise concept paper which will
identify the core issues and bottlenecks at the pre-trial, trial and enforcement stages
of civil cases, examples of which are outlined above, and set out proposed solutions
in general terms. [Q2 2012]
As publicly announced, the Government adopts a Presidential Decree providing for
the rationalisation and reorganisation of the magistrates’ courts and the allocation of
appropriate human resources and infrastructure for the new structure of magistrates’
courts resulting from this reform. [Q2 2012]
The Government prepares a strategy on the active promotion of pre-trial
conciliation, mediation, and arbitration, with a view to ensuring that a significant
amount of citizens and businesses make use of these modes of alternative dispute
resolution. [Q2-2012]
Starting from end-June 2012, Government updates and further refines every quarter
the e-justice work plan of December 2011 for the use of e-registration and e-tracking
of the status of individual cases in all courts of the country and for e-filing. The
updates will contain deadlines for the evaluation and completion of pilot projects
and information regarding the extension of e-registration and e-tracking to all courts
by end-2013.
By end-August 2012, Government presents, based on the study of the backlog of
non-tax cases in courts conducted jointly with an external body of experts and to be
presented by end-June 2012, an action plan with specific measures for a reduction of
such backlog of at least 50 per cent by end-July 2013 and starts implementing the
action plan.
The Government holds a series of workshops to discuss the findings and
recommendations in the concept paper prepared by the task force on the review of
the Code of Civil Procedure. These workshops will allow for broad consultation of
domestic stakeholders and participation from recognised international experts in the
field of civil procedure. [Q3-2012]
The Government conducts an assessment of whether the enactment of Law
3898/2010 on mediation in civil and commercial matters has delivered the results
which the legislation had set out to do, and presents data and analysis concerning
costs, time and success rates associated with the enforcement of agreements arising
from alternative dispute resolution as compared with the enforcement of judicial
decisions. [Q4-2012]
The task force on the review of the Code of Civil Procedure prepares a detailed
paper outlining the main proposals for amendments to the Code of Civil Procedure.
[Q4-2012]
The Government implements the Presidential Decree on the reform of the
magistrates’ court by creating their new structure, filling vacant positions with
graduates from the National School of Judges and redeploying judges and
administrative staff on the basis of existing resources available within Greece’s
judiciary and public administration. [Q4-2012]
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The Government launches, jointly with an external body of experts, a study on the
costs of civil litigation, its recent increase and its effects on workload of civil courts,
with recommendations due by end-December 2013. [Q2-2013]
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5 MONITORING AND TECHNICAL ASSISTANCE
The Ministry of Finance's directorate of planning, management and monitoring
becomes operational with the aim of improving reform management and oversight.
By end-March 2012, it starts publishing quarterly monitoring indicators for each of
the key structural reform initiatives.
The Government will request technical assistance to be provided by the EU Member
States, the European Commission the IMF or other organisations in priority areas.
These technical assistance actions will be coordinated by the Commission's Task
Force for Greece according to its mandate. The Greek administration will ensure
continuity of technical assistance launched.
In line with the conclusions of the euro-area summit of 26 October 2011, and the
Eurogroup Conclusions of 21 February 2012, the Government will fully cooperate
with the Commission, the ECB and the IMF staff teams to strengthen the monitoring
of programme implementation, and will provide the staff teams with access to all
relevant data and other information in the Greek administration.
The Government will promptly put in place a mechanism that allows better tracing
and monitoring of the official borrowing and internally-generated funds destined to
service Greece's debt, by paying an amount corresponding to the coming quarter's
debt service directly to a segregated account of Greece's paying agent. By end-April
2012, the Government will introduce in the Greek legal framework a provision
ensuring that priority is granted to debt servicing payments. This provision will be
introduced in the Greek Constitution as soon as possible.
ANNEX 2
169
Annex 1: Provision of data
During the programme, the following data shall be made available to the European
Commission, the ECB and the IMF staff on a regular basis.
These data should be sent to the following e-mail address:
This address should also be used for the transmission of other data and reports related to the
monitoring of the programme.
To be provided by the Ministry of Finance
Preliminary monthly data on the state
budget execution (including breakdown by
main categories of revenue and expenditure
and by line ministry).
(Data compiled by the Ministry of Finance)
Monthly, 15 days after the end of
each month; these data should also
be included in subsequent
transmissions in case of revision.
Updated monthly plans for the state budget
execution for the remainder of the year,
including breakdown by main categories of
revenue and expenditure and by line
ministry.
(Data compiled by the Ministry of Finance)
Monthly, 30 days after the end of
each month.
Monthly data on the public wage bill (of
general government, including a
breakdown in nominal wage and
allowances paid to government employees
per line ministry and public entity), number
of employees (including a breakdown per
ministry and public entities outside the
central government) and average wage
(including the relative shares of the base
wage, allowances and bonuses).
(Data compiled by the Ministries of
Interior and Finance)
Monthly, 30 days after the end of
each month (starting in June 2010).
Preliminary monthly cash data on general
government entities other than the state.
(Data compiled by the Ministry of Finance)
Monthly, 30 days after the end of
each month, these data should also
be included in subsequent
transmissions in case of revision.
ANNEX 2
170
Monthly data on staff: number of employees,
entries, exits, transfers among government entities;
and from and into the labour reserve, per entity.
(Data compiled by the Ministries of Interior and
Finance)
Monthly, 30 days after the
end of each month.
Weekly information on the Government's cash
position with indication of sources and uses as
well of number of days covered.
(Data compiled by the Ministry of Finance)
Weekly on Friday, reporting
on the previous Thursday.
Data on below-the-line financing for the general
government.
(Data compiled by the Ministry of Finance)
Monthly, no later than 15
days after the end of each
month; these data should also
be included in subsequent
transmissions in case of
revision.
Data on expenditure pending payment (including
arrears) of the general government, including the
State, local government, social security, hospitals
and legal entities.
(Data compiled by the Ministry of Finance on the
basis of basic data from the several line ministries)
Quarterly, within 55 days
after the end of each quarter.
Data on use of international assistance loans split
among following categories: Financial stability
fund, escrow account, debt redemption, interest
payments, other fiscal needs, building of cash
buffer; per quarter and cumulative
Quarterly, by the end of each
quarter.
Data on public debt and new guarantees issued by
the general government to public enterprises and
the private sector.
Data on maturing debt (planned redemptions per
month, split between short-term (Treasury bills
and other short-term debt) and long-term (bonds
and other long-term) debt).
Data on planned monthly interest outflows.
(Data compiled by the Ministry of Finance)
Monthly, within one month.
ANNEX 2
171
Data on assets privatised and proceeds collected.
(Data compiled by the Ministry of Finance)
Monthly.
Data on state-owned enterprises: revenue, costs,
payroll, number of employees and liabilities
(including maturities of public enterprises' debts)
(Data compiled by the Ministry of Finance)
Monthly, within three weeks
of the end of each month for
the ten largest enterprises.
Quarterly within three weeks
of the end of each quarter for
the other enterprises.
Quarterly for the maturities
of state-owned enterprises'
liabilities.
Monthly statement of the transactions through off-
budget accounts.
(Data compiled by the Ministries of Finance and
Education)
Monthly, at the end of each
month.
Monthly statement of the operations on the special
accounts.
(Data compiled by the Ministry of Finance)
Monthly, at the end of each
month.
Report on progress with fulfilment of policy
conditionality.
(Report prepared by the Ministry of Finance)
Quarterly before the
respective review starts.
Monthly data on health care expenditure by the
social security funds with a lag of three weeks
after the end of the respective quarter.
(Data compiled by the Ministries of Labour and
Health)
Monthly, within three weeks
of the end of each month.
Starting with data for January
2011 for EOPPY, and from
April 2011 on for the other
funds
ANNEX 2
172
To be provided by the Bank of Greece
Assets and liabilities of the Bank of
Greece. Weekly, next working day.
Assets and liabilities of the Greek banking
system - aggregate monetary balance
sheet of credit institutions.
Monthly, 30 days after the
end of each month.
Evolution of the external funding
provided by Greek banks to their
subsidiaries abroad.
Monthly, 15 days after the
end of each month.
Report on banking sector liquidity
situation. Weekly, next working day.
Report on the evolution of financial
stability indicators.
Quarterly, 30 days after the
publication data of each
quarter.
Report on results from the regular
quarterly solvency assessment exercise.
Quarterly, 15 days after the
end of each quarter
depending on data
availability.
Weighted average of Loan-to-value (LTV)
ratio for new loans with real estate
collateral
Yearly.
ANNEX 2
173
To be provided by the Hellenic Financial Stability Fund
Detailed report on the balance sheet of the
Financial Stability Fund with indication and
explanation of changes in the accounts.
Weekly, next working day.
ANNEX 2
174
Annex 2: Statistics to be published by the Ministry of Justice or Ministry of Finance
(a) by end-March 2012, for each administrative tribunal, court of appeal and the supreme
administrative court:
(i) the number of judges and administrative staff, with a breakdown for judges
working in tax chambers or dealing primarily with tax cases;
(ii) the number of all cases;
(iii) the number of cases carried over from 2011;
(iv) the number of cases filed in the first quarter of 2012;
(v) the number of tax cases, with a breakdown according to case value (up to
EUR 10 000, EUR 10 001 to EUR 50 000, EUR 50 001 to EUR 100 000,
EUR 100 001 to EUR 500,000, and above EUR 500 000);
(v) the number of tax cases carried over from 2011;
(vi) the number of tax cases filed in the first quarter of 2012;
(vii) the recovery rate for all tax cases, which for the purposes of the MoU, shall
mean the ratio of the amount collected by the creditor in enforcement
proceedings – following the issuance of an enforceable title – to the amount
adjudicated by the court.
(b) by end-June 2012, in addition to the information in (a) above, updated as necessary, for
each civil court, court of appeal and the supreme civil court:
(i) the number of judges and administrative staff;
(ii) the number of all cases;
(iii) the number of cases carried over from 2011;
(iv) the number of cases filed in the first two quarters of 2012;
(v) the number of dormant cases, i.e. cases pending before the civil courts in
which the relevant court’s file records that they have been postponed or never
received a hearing date and no party activity for receiving a hearing date has
taken place for at least 18 months.
(c) by end-September 2012, in addition to the information in (a) and (b) above, updated as
necessary, at the first instance and the appeal level:
(i) the number of corporate insolvency cases;
(ii) the average duration of corporate insolvency cases;
(iii) the average cost of corporate insolvency cases;
(d) by end-December 2012, quarterly updates of the information in (a) to (c) above.
175
Abbreviations
ASEP Supreme Council for Staff Selection
CPB Central Purchasing Bodies
DEPA Public Gas Corporation
DRG Diagnostic-Related Group
DSO Distribution System Operator
ECB European Central Bank
EEA European Economic Area
EETT Hellenic Telecommunications and Post Commission
EFSF European Financial Stability Facility
EKEVYL National Centre for Medical Technology
ELSTAT Hellenic Statistical Authority
EOF National Organisation for Medicines
EOPYY National Organisation for the provision of Health services
EPY Health Procurement Commission
ERDF European Regional Development Fund
ESA European System of Accounts
ESF European Social Fund
ESY National Health System
EU European Union
GDP Gross Domestic Product
GEMI General Commercial Registry
HRADF Hellenic Republic Asset Development Fund
IDIKA E-governance of social insurance
IMF International Monetary Fund
KTEL Joint Fund for Bus Receipts
LNG Liquefied Natural Gas
LTV Loan-to-value
MEFP Memorandum of Economic and Financial Policies
MTFS Medium-Term Fiscal Strategy
NHS National Health System
OASA Athens Urban Transport Organisation
OECD Organisation for Economic Cooperation and Development
OGA Agricultural Insurance Organisation
OSE Railway Organisation of Greece
OTE Hellenic Telecommunication Company
PPC Public Power Corporation
PSC Point of Single Contact
RAE Regulatory Authority for Energy
RSPP Radio Spectrum Policy Programme
SPA Single Payment Authority
SPPA Single Public Procurement Authority
TAP trans-Adriatic pipeline
TEN-T Trans European Transport network
TSO Transmission System Operator
WHO World Health Organisation
176
TECHNICAL MEMORANDUM OF UNDERSTANDING
March 9, 2012
1. This Technical Memorandum of Understanding (TMU) sets out the understandings
regarding the definitions of the indicators subject to quantitative targets (performance criteria
and indicative targets), specified in the tables annexed to the Memorandum of Economic and
Financial Policies. It also describes the methods to be used in assessing the program
performance and the information requirements to ensure adequate monitoring of the targets.
We will consult with the Fund before modifying measures contained in this letter, or adopting
new measures that would deviate from the goals of the program, and provide the European
Commission, ECB and the Fund with the necessary information for program monitoring. We
will also consult and provide information to the European Commission and the ECB in the
same manner.
2. For program purposes, all foreign currency-related assets, liabilities, and flows will be
evaluated at “program exchange rates” as defined below, with the exception of the items
affecting government fiscal balances, which will be measured at current exchange rates. The
program exchange rates are those that prevailed on January 31, 2012. In particular, the
exchange rates for the purposes of the program are set €1 = 1.3176 U.S. dollar, €1 = 100.63
Japanese yen, €1.1772= 1 SDR.
General Government
3. Definition: For the purposes of the program, the general government includes:
! The central government. This includes:
" The entities covered under the State Budget as defined in Chapter 2 of the Law
2362/1995 as being modified by Law 3871/2010 regarding “Public
Accounting, Auditing of Government Expenditures and Other Regulations,”
and other entities belonging to the budgetary central government.
" Other entities or extra-budgetary funds (EBFs) not part of the State budget, but
which are, under European System of Accounts (ESA95) rules (“ESA95
Manual on Government Deficit and Debt”), classified under central
government. This includes ETERPS and the National Wealth Fund.
" The following state enterprises and organizations included by the National
Statistical Service (ELSTAT) under the definition of central government
(ATTIKO METRO, ETHEL, HLPAP, ELGA, HELLENIC DEFENCE
SYSTEMS S.A., OSE, TRAINOSE, ERT, ELECTROMECHANICA KYMI
LTD, OPEKEPE, KEELPNO, EOT, INFORMATION SOCIETY IN
GREECE, Unit for the Organization and Management of Development
177
Projects S.A.). References to individual companies are understood to include
all of their subsidiaries which are to be consolidated under IFRS requirements.
! Local government comprising municipalities, prefectures, and regional governments
including their basic and special budgets, including all agencies and institutions
attached thereto, which are classified as local governments according to ESA 95.
! Social security funds comprising all funds that are established as social security funds
in the registry of ELSTAT.
! Other extra budgetary entities included by ELSTAT under general government, which
are not yet counted under central government.
! This definition of general (central) government also includes any new funds, or other
special budgetary and extra budgetary programs that may be created during the
program period to carry out operations of a fiscal nature. The government will inform
IMF, European Commission and ECB staff of the creation of any such new funds,
programs, or entities immediately.
! Supporting material: The Ministry of Finance (MoF) will provide to the European
Commission, ECB and IMF detailed information on monthly revenues and
expenditures, domestic and foreign debt redemptions, new domestic and foreign debt
issuance, change in the domestic and foreign cash balances of the central government
at the central bank of Greece, all other sources of financing including capital
transactions, and arrears of the general government. The Ministry of Finance, in
collaboration with the Ministry of Interior, will provide monthly data on revenues and
expenditures for local governments, as collected in the Ministry databank. The
Minister of Finance, in collaboration with the Ministry of Labor and Social Security,
will provide monthly data on revenues and expenditures in main social security funds
(including IKA, OGA, OAEE, OAED). The Bank of Greece will provide detailed
monthly data on assets and liabilities of local authorities, social security funds,
ETERPS (and other extra-budgetary funds), and state enterprises included in the
definition of general government in line with monetary survey data. Data will be
provided within four weeks after the closing of each month.
178
I. QUANTITATIVE AND CONTINUOUS PERFORMANCE CRITERIA, INDICATIVE TARGETS,
AND CONTINUOUS PERFORMANCE CRITERIA: DEFINITIONS AND REPORTING STANDARDS
A. Floor on the Modified General Government Primary Cash Balance (Performance
Criterion)
4. Definition: The modified general government primary cash balance (MGGPCB) is
defined as the modified general government cash balance (MGGCB) minus interest payments
by the state budget. The MGGCB is defined as the sum of the cash balances of the ordinary
state budget, the cash balance of the public investment budget, the change in net financial
assets of local government, the change in net financial assets of social security, the change in
net financial assets of ETERPS, the change in net financial assets of reclassified public
enterprises (RPEs) minus guarantees called to entities within the general government and the
spending by the National Wealth Fund. Privatization receipts, as defined below and the
proceeds from the sale of land and buildings will be excluded from cash receipts. Net lending
operations by the state budget will be recorded as cash expenditures.
! The cash balance of the ordinary state budget. The cash balance of the ordinary
state budget will be measured from above the line, based on (i) ordinary budget
revenues (recurrent revenue plus non-recurrent revenue, including NATO revenues,
but excluding tax refunds and all transfers related to the Eurogroup decision of
February 21, 2012 (in regard to income of euro zone national central banks,
including the BoG, stemming from their investment portfolio holdings of Greek
government bonds)); minus (ii) ordinary budget expenditures (ordinary budget
expenditures will exclude amortization payments, but include salaries and pensions;
grants to social security funds, medical care and social protection; operational and
other expenditure; returned resources; payments in exchange of claims of insurance
fund for the personnel working in the Public Electricity Company; the reserve, interest
payments; transfers for the settlement of past debt, payments for military equipment
procurement on a cash basis; NATO expenses, capital transfers to social security
funds or other entities by bonds; and called guarantees where the state or central
government assumes payments on behalf of entities outside of the general
government, and transfers made from the special budget allocation for clearance of
arrears to any general government entity) of the ordinary state budget as published
monthly on the official website of the General Accounting Office of the Ministry of
Finance, and in line with the corresponding line items established in the ordinary state
budget.
! The cash balance of the public investment budget. The cash balance of the public
investment budget will be measured from above the line, based on investment budget
revenues minus investment budget expenditures of the investment state budget as
published monthly on the official website of the General Accounting Office of the
Ministry of Finance, and in line with the corresponding line items established in the
investment state budget.
179
! The change in net financial assets of local governments is defined on a transactions
basis, as the change in the total of financial assets minus financial liabilities of local
authorities adjusted for valuation changes by the Bank of Greece.
" Financial assets include (but are not limited to) deposits of local governments
in the Bank of Greece and deposits of local governments in domestic credit
institutions. Deposits will be measured at face value excluding accrued interest
in line with recording for monetary survey data.
" Financial liabilities include (but are not limited to) short- and long-term loans
from domestic credit institutions to local governments, measured at face value,
consistent with recording for monetary survey data.
! The change in net financial assets of social security funds is defined on a
transactions basis, as the change in the total of financial assets minus financial
liabilities of social security funds, adjusted for valuation changes by the Bank of
Greece.
" Financial assets include
o Deposits of social security funds in the Bank of Greece and deposits
of social security funds in the domestic credit institutions and
deposits held either directly or indirectly through the IKA mutual
fund. Deposits are measured at face value excluding accrued interest,
consistent with reporting requirements for monetary survey data.
o Holdings of shares quoted on the Athens Stock Exchange held by
social security funds either directly or indirectly through the IKA
mutual fund.
o Direct or indirect holdings of Mutual Fund units issued by Greek
management companies (other than the IKA mutual fund).
o Holdings of central government bonds, including short and long-term
securities issued domestically, long-term securities issued abroad
operated from Bank of Greece accounts, and indirect holdings
through the IKA mutual fund. Holdings will be measured at nominal
value.
o Holdings of bonds issued abroad and other foreign assets.
" Financial liabilities include the short and long term loans from domestic credit
institutions to the social security funds, measured consistently with monetary
survey data.
! The change in net financial assets of ETERPS is defined on a transactions basis, as
the change in the total of financial assets minus financial liabilities of ETERPS,
adjusted for valuation changes by the Bank of Greece.
180
" Financial assets include
o Deposits of ETERPS in the Bank of Greece and deposits of ETERPS
in domestic credit institutions. Deposits will be measured at face
value excluding accrued interest in line with recording for monetary
survey data.
o Holdings of shares, held by ETERPS, quoted on the Athens stock
exchange.
o Holdings of Mutual Fund units issued by Greek management
companies.
o Holdings of central government bonds.
o Holdings of other bonds issued abroad.
" Financial liabilities include the short and long term loans from the domestic
credit institutions to ETERPS, measured consistently with monetary survey
data, or other lending from the Bank of Greece.
! The change in net financial assets of reclassified public enterprises (RPEs) is
defined on a transactions basis, as the change in the total of financial assets minus
financial liabilities of RPEs, adjusted for valuation, minus the amount of guarantees
called from entities which are consolidated within the general government. RPEs will
include the following organizations: ELGA, KEELPNO, OPEKEPE (excluding the
account ELEGEP), EOT, ATTIKO METRO, HELLENIC DEFENCE SYSTEMS
S.A., ERT, ETHEL, TRAINOSE, HLPAP, ELECTROMECHANICA KYMI LTD,
INFORMATION SOCIETY IN GREECE, Unit for the Organization and Management
of Development Projects S.A., and OSE.
" Financial assets include
o Deposits of RPEs in the Bank of Greece and deposits of RPEs in the
credit institutions (domestic and foreign). Deposits will be measured
at face value excluding accrued interest.
o Holdings of shares, held by RPEs quoted on the Athens Stock
Exchange.
o Holdings of Mutual Fund units issued by Greek management
companies.
o Holdings of central government bonds.
o Holdings of other bonds issued abroad.
" Financial liabilities include the short and long term loans from the domestic
credit institutions to RPEs, measured consistently with monetary survey data.
181
They also include short and long term loans from the foreign banking system,
as well as loans from the EIB or other official lenders, as measured by the
difference between new loans granted to these entities (as approved by the
GAO in line with the Fiscal Responsibility Act) and amortization of these
loans through called guarantees of the government or amortization of these
loans made by actual payments by the companies themselves, upon monitoring
and information provided by the General Accounting Office (D25).
! The expenditures of the National Wealth Fund are defined from below the line as
the change in deposits of the NWF net of deposit changes due to borrowing for
securitization purposes that are remitted to the central government as privatization
receipts. Changes in net deposits of the NWF and borrowing are to be measured from
the monetary survey data for data on borrowing and on deposits held in commercial
banks. For deposits held at the central bank, net deposits are measured directly from
the Bank of Greece. Remittance of privatization proceeds to the state will be measured
from the inflows into the Treasury Single Account.
5. Other provisions.
" For the purpose of the program, the primary expenditure of the central
government that is monitored excludes payments related to bank support, when
carried out under the program’s banking sector support and restructuring
strategy. Transactions that may be excluded from the balance include loans to
financial institutions and investments in equity of financial institutions
(requited recapitalization); unrequited recapitalization; purchases of troubled
assets, and operations related to the FSF. However, any financial operation by
central government to support banks, including the issuance of guarantees or
provision of liquidity, will be immediately reported to IMF, European
Commission, and ECB staff.
" Capital transfers to social security funds or other entities by bonds shall
exclude bond issuance for settlement of end-2009 health related arrears, and
the settlement related to the judiciary liabilities.
6. Adjustor: The floor on the modified general government primary cash balance will be
adjusted upward by the difference between transfers to any general government entity made
for the purpose of clearance of arrears from the special budget allocation and the arrears
actual paid out of transfers from the special budget allocation. Timetable for the clearance of
arrears from the special budget allocation included under the ceiling is reflected in Schedule
A.
182
2013 2014 2015
Mar-12 Jun-12 Sep-12 Dec-12 Dec-13 Dec-14 Dec-15
Progr. 1/ Progr. 1/ Progr. 1/ Progr. 1/ Progr. 2/ Progr. 3/ Progr. 4/
Payments made from the special budget allocation for clearance of arrears 0 0 1.3 4.0 0.0 0.0 0.0
1/ Cumulatively from January 1, 2012.
2/ Cumulatively from January 1, 2013.
3/ Cumulatively from January 1, 2014.
4/ Cumulatively from January 1, 2015.
2012
Schedule A: Payments made from the special budget allocation for clearance of arrears.
(in billions of Euro)
7. Supporting material.
! Data on cash balances of the ordinary and state budgets will be provided to the
European Commission, ECB and IMF by the General Accounting Office in the
Ministry of Finance within three weeks after the end of each month. Data will include
detailed information on revenue and expenditure items, in line with monthly reports
published on the official website of the Ministry of Finance. Data will also include
data on capital transfers to social security funds or other entities in bonds and called
guarantees.
! Data on net financial assets of local authorities and social security funds, extra-
budgetary funds including ETERPS, AKAGE, and reclassified public enterprises will
be provided to the IMF, European Commission and ECB by the GAO in cooperation
with the Statistics Department of the Bank of Greece within four weeks after the end
of each month.
! Data on the amount of arrears cleared from the special budget allocation will be
provided by the General Accounting Office in the Ministry of Finance within three
weeks after the end of each month.
B. Ceiling of State Budget Primary Spending (Performance Criterion)
8. Definition: The state budget primary spending consists of state budget spending
(spending of the ordinary state budget plus spending of the public investment budget) minus
interest expenditures paid by the state budget, in line with the definitions provided above.
Primary expenditure of the central government that is monitored for the Performance
Criterion excludes any cash payments related to bank restructuring, when carried out under
the program’s banking sector restructuring strategy. Costs that may be excluded from the
balance include loans to financial institutions and investments in equity of listed and non-
listed financial institutions (requited recapitalization); unrequited recapitalization; and
purchase of troubled assets. However, any financial operation by central or general
government to support banks, including the issuance of guarantees or provision of liquidity,
will be immediately reported to European Commission, ECB and IMF staff.
9. Adjustor: The Ceiling of State Budget Primary Spending will be adjusted downward
by the difference between transfers to any general government entity made for the purpose of
clearance of arrears from the special budget allocation and the arrears actual paid out of
transfers from the special budget allocation.
183
10. Supporting material. The General Accounting Office of the Ministry of Finance will
provide monthly expenditure data of the ordinary and investment state budget, as defined
above. The Ministry of Finance will further provide monthly data on the stock of arrears of
line ministries.
C. Non-Accumulation of Domestic Arrears by Line Ministries and Hospitals
(Performance Criterion)
11. Definition. For the purpose of the program, domestic arrears of Line Ministries and
Hospitals are defined as the unpaid invoices that have past the due date by 90 days. In case no
due date is specified on the supplier contract, an unpaid commitment is considered to be in
arrears 90 days after the initiation of the invoice. Data will be provided within four weeks
after the end of each month. The non-accumulation of domestic arrears is defined as no
increase in the stock of all general government arrears (including ordinary investment budget)
outstanding at the end of every month, measured on cumulative basis, irrespective of the time
period in which the unpaid commitments were entered into plus transfers to any General
government entity made out of special budget allocation for clearance of arrears. This does
not include the arrears which are being accumulated by the Civil Servants’ Welfare Fund.
12. Supporting material. Monthly data on arrears of public hospitals (NHS hospitals)
will be provided by the Ministry of Health and arrears of line ministries by the Ministry of
Finance within four weeks after the end of each month. The Ministry of Finance will publish
this information on the Ministry of Finance website. The arrears data will be based on survey
data, until data from commitment registers are assessed by the IMF, European Commission,
and ECB staff to provide comprehensive and reliable information. These reports will also
include data on accounts payable overdue for more than 30 and 60 days for the central
government (line ministries and Decentralized Prefectures). Data on accounts payable
overdue for more than 30 and 60 days will be based on the commitment registers. The stock
of arrears will reflect all arrears outstanding, irrespective of the time period in which the
unpaid commitments were entered into, but will exclude the 5.34 billion hospital arrears to
pharmaceutical companies which were incurred by end-2009 to the extent these are still
outstanding.
D. Non-Accumulation of Domestic Arrears by the General Government (Indicative
Target)
13. Definition. For the purpose of the program, domestic arrears are defined as the unpaid
invoices that have past the due date by 90 days. In case no due date is specified on the
supplier contract, an unpaid commitment is considered to be in arrears 90 days after the
initiation of the invoice. Data will be provided within four weeks after the end of each month.
The continuous non-accumulation of domestic arrears is defined as no increase in the stock of
all general government arrears outstanding at the end of every month during which quarter the
indicative target is being monitored, irrespective of the time period in which the unpaid
commitments were entered into. This does not include the arrears which are being
accumulated by the Civil Servants’ Welfare Fund. It will also exclude €5.34 billion hospital
arrears to pharmaceutical companies which were incurred by end-2009 to the extent these are
still outstanding.
184
Supporting material. The Ministry of Finance will provide consistent data on monthly
expenditure arrears of the general government, as defined above within four weeks after the
end of each month, and publish this information on the Ministry of Finance website. The
arrears data will be based on survey data, until data from commitment registers are assessed
by the IMF, European Commission, and ECB staff to provide comprehensive and reliable
information. These reports will also include data on accounts payable overdue for more than
30 and 60 days for the central government (line ministries and Decentralized Prefectures).
Data on accounts payable overdue for more than 30 and 60 days will be based on the
commitment registers.
E. Ceiling on the Overall Stock of Central Government Debt (Performance
Criterion)
14. Definition. The overall stock of central government debt will refer to ESA95 central
government debt, which includes the state debt, debts of extrabudgetary funds and public
enterprises that are consolidated into the central government, and other ESA 95 adjustments.
It will be defined for the purposes of the program as total outstanding gross debt liabilities. It
will include, but not be limited to, liabilities in the form of securities and loans. It will exclude
accounts payable. Debt will be measured at nominal value. The program exchange rate will
apply to all non-euro denominated debt. Inflation indexation will apply to inflation indexed
debt, using the relevant index as specified in the debt instrument. For the purposes of the
program, the ceiling on the stock of central government debt will exclude debt arising from
payments for bank restructuring, when carried out under the program’s banking sector
restructuring strategy (this does not cover the debt related to the Financial Stability Fund).
This includes loans to financial institutions and investments in equity of financial institutions
(requited recapitalization); unrequited recapitalization; and purchase of troubled assets.
However, any financial operation by the central government to support banks, including the
issuance of guarantees or provision of liquidity, with the exception of Hellenic Republic
intermediation in repos between foreign and domestic financial institutions will be
immediately reported to IMF, European Commission and ECB staff.
15. Adjusters. For 2011, the ceiling on the overall stock of ESA95 central government
debt will be adjusted upward (downward) by the amount of any upward (downward) revision
to the stock of end-December 2011 ESA95 central government debt of €378.2 billion. The
ceiling shall also exclude the borrowing for collateral for a private sector involvement
operation under the program to the extent that such borrowing would be recognized in the
gross debt definition.
16. Supporting material. Data on the total stock of central government debt will be
provided to the European Commission, ECB and IMF staff by the General Accounting Office
consistent with the ESA95 definition no later than 30 days after the end of each month.
F. Ceiling on New Central Government Guarantees (Performance Criterion)
17. Definition. The ceiling on the new central government guarantees shall include new
guarantees granted by the state, as well as new guarantees granted by any other entity that is
classified under ESA95 under central government, but exclude guarantees to entities whose
185
debt is covered under the ceiling on the stock of central government debt as defined in
paragraphs 13 and 14. The ceiling shall exclude guarantees to support banks and exclude
guarantees related to EIB financed loans. The ceiling shall also exclude guarantees granted by
ETEAN up to an amount of €50 million provided these are fully backed by an equivalent
amount of bank deposits. New guarantees are guarantees extended during the current fiscal
year. The latter shall include also guarantees for which the maturity is being extended beyond
the initial contractual provisions above a total cumulative amount of €500 million per
calendar year. Modification of existing guarantees (without changing the maturity, amount of
guarantees, and beneficiaries of the loan) will not be treated as new guarantees. The ceiling
shall also exclude guarantees granted under a risk sharing instrument of the EU structural
funds (see COM(2011) 655 final) that do not create contingent liabilities for the Greek State.
18. Supporting material. All new central government guarantees will be reported in
detail, identifying amounts and beneficiaries. The General Accounting Office will provide the
data on a monthly basis within three weeks after the end of each month. Non-state entities
classified under the central government shall report the new guarantees they extended to the
General Accounting Office on a monthly basis within three weeks after the end of each
month.
G. Non-Accumulation of External Debt Payment Arrears by the General
Government (Continuous Performance Criterion)
19. Definition. For the purposes of the program, an external debt payment arrear will be
defined as a payment on debt to non-residents contracted or guaranteed by the general
government, which has not been made within seven days after falling due. For purposes of
this program, the term “falling due” means the date in which external debt payments are due
according to the relevant contractual agreement, including any contractual grace periods. The
performance criterion will apply on a continuous basis throughout the program period.
20. Supporting material. The stock of external arrears of the general government will be
provided by the General Accounting Office with a lag of not more than seven days.
H. Floor on Privatization Proceeds (Indicative Target)
21. Definition. Privatization proceeds will be defined as the cash receipts from the asset
sales to be carried out by the privatization agency (HRADF) and prior to its establishment
directly by the government. These will include, but not be limited to, the sale of equity of
listed or non-listed companies and banks, shareholdings in public infrastructure,
shareholdings in SPVs, leasehold in commercial real estate and publicly held land, sale-lease
back operations, securitization of asset-related cash streams, or other assets incorporated in
the authorities’ privatization program, as well as sale of rights and concessions (including
securitization of the proceeds of concessions). Proceeds will be valued in euro and reported
on a gross basis, excluding any associated capital expenditure or other restructuring costs as
well as the operating costs of the National Wealth Fund. Proceeds will be measured as the
inflows of cash received by the National Wealth Fund, and prior to its establishment directly
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by the government, as deposited in the Special Privatization Account at the Bank of Greece
on the day the transaction is settled.
22. Supporting material. Quarterly information on the cash receipts from asset sales,
quarterly balances of the privatization account, inflows to the account (by project), and
outflows to the state budget, will be made available by the Minister of Finance, in
collaboration with the National Wealth Fund, no later than two weeks after the end of each
quarter. The Ministry of Finance will also provide a quarterly progress report on the
Sovereign Wealth Fund activity, including a description of its operations, information on any
borrowing (amounts, terms, and collateral), updates on the key steps in the operational plan,
and latest estimates of the expected proceeds and timeline for completion of the transactions.
In addition, quarterly reports on the National Wealth Fund’s activities, along with an audited
report of its finances will be published on the website of the Ministry of Finance.
23. Other. For QPC monitoring, receipts from privatization are excluded (in line with
paragraph 5 of the TMU) from cash revenue receipts. However, for 2012 and 2013 where this
is applicable, sales of those gaming licenses, telecom licenses, sales of aircrafts, and extension
of the airport concession that were established in the context of the May 2010 SBA program
or the 2011 budget (Second Review) discussions will be recorded as cash revenue receipts
and taken into account for the MGGPCB criterion, irrespective of whether the realized
proceeds accrue to the privatization agency or not. The privatization agency will provide
GAO, analytical data on the gross receipts and expenditures of the above mentioned sources,
on a monthly basis – by the end of the 20th
of every next month.
I. ESA “Program” Deficit and Overall Monitoring and Reporting Requirements
24. ESA Program Deficit. For the purposes of the program, the ESA deficit (EDP B.9)
will exclude the sale of non-financial assets such as land, buildings, and other concessions or
licenses, unless these have been agreed in the context of the May 2010 SBA program
(including subsequent reviews). The ESA deficit will also exclude all transfers related to
the Eurogroup decision of February 21, 2012 per schedule B (in regard to income of
euro zone national central banks, including the BoG, stemming from their investment
portfolio holdings of Greek government bonds).
2012 2013 2014 2012-14 2015 2016 2017 2018 2019 2020 2015-20 Total
Total 729.0 600.6 470.4 1,800.0 612.7 521.4 420.6 324.5 260.7 160.1 2,300.0 4,100.0
o/w: from the BoG 305.3 275.8 236.2 817.3 331.5 312.7 289.3 271.3 234.7 150.7 1,590.2 2,407.5
Source: ECB
Schedule B: Amounts to be Transferred to the Greek Government by Eurosystem National Central Banks.
(in millions of Euro)
25. ESA Primary Balance. For the purpose of the program, the ESA primary balance is
defined as general government ESA95 balance (EDP B.9) plus ESA 95 general government
consolidated interest payable (EDP D.41).
26. Overall Monitoring and Reporting Requirements. Performance under the program
will be monitored from data supplied to the EC, ECB, and IMF by the Ministry of Finance,
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the General Accounting Office, and Bank of Greece. The authorities will transmit to the IMF,
EC, and ECB staff any data revisions in a timely manner.
II. MONITORING OF STRUCTURAL BENCHMARKS
27. Benchmark on progress in revenue administration, 2012. Progress in revenue
administration in 2012 will be defined as reaching the targets set in table 1.
28. Definition. A completed audit is defined as an audit reported as formally finalized in
the ELENXIS audit case management system, including signed off by the audit supervisor,
and the taxpayer has settled or appealed the assessment, or the audit report states that no
underpayment has occurred. Risk-based audits for large taxpayers are defined as audits
selected on a risk basis using the ELENXIS audit management system.
29. Supporting material. Monthly information on risk-based full-scope audits and
temporary audits of large taxpayers, self employed and high wealth individuals, and VAT
non-filers, and collection of assessed taxes and penalties, and collection of tax debt will be
made available by the Minister of Finance, in collaboration with the steering committee on
revenue administration, no later than two weeks after the end of each month. Data submission
will include data back to 2010. Information will continue to be provided after
December 2012.
30. Benchmark on progress in public financial management, 2012. Progress in
implementing public financial management reforms in 2012 will be defined as reaching the
targets set in table 2.0
31. Definition. The reporting institutional units (State and general government entities)
include any unit under the general government as defined by Elstat as of end-February 2012,
excluding additions of new entities under the control of sub-national governments. Any entity
coming into the above definition after December 2011 could run commitment registers on a
pilot base. Summary data reported on the e-portal from the commitment registers include all
11 fields now available under the e-portal. From end-June, entries under the e-portal will
include an expanded set of fields, including cumulative appropriations released, commitments
made, invoices received, and payments made.
32. Supporting material. Monthly summary information from the e-portal, surveys, and
other sources on performance against the above indicators will be published by the General
Accounting Office of the Ministry of Finance on their website no later than four weeks after
the end of each month. Data submission will include data back to end-2011. Survey
information will continue to be provided after December 2012 unless discrepancies between
survey and e-portal data are eliminated.
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Table 1. Structural Benchmark in Revenue Administration
Area Indicator 2012 targets 1/
end-June end-December
Debt collection
a. Collection of tax debt as of end-December 2011 (million of euros)1,000 2,000
b. Collection of new debt accumulated in 2012
(percent of new debt)20% 20%
Tax audits and collection of large taxpayers
a. Number of completed risk-based full-scope audits 150 300
b. Number of completed risk-based temporary audits (VAT, Withholding,
refunds, exemptions etc.)
150 325
Of which field audits 25 100
c. Collection of assessed tax and penalties from all risk-based full scope
and temporary audits
(percent of assessed tax and penalties)
50% 50%
Audits and collection for high wealth individuals
a. Number of completed new risk-based audits of high wealth individuals,
as identified by the task force in 2011 2/ 600 1,300
b. Collection of assessed tax and penalties from all risk-based audits, as
identified by the task force in 2011
(percent of assessed tax and penalties)
50% 50%
Audits and collection for VAT non filers
a. Number of completed risk-based VAT audits of VAT non-filers 5,000 10,000
b. Collection of all assessed tax and penalties
(percent of assessed tax and penalties)20% 20%
1/ Cumulative target from January 1, 2012. Targets are defined net of the audits completed in the first two months of 2012
counted against meeting the end-2011 targets (prior action).
2/ The audits completed since January 2011 will amount to at least 1,700 audits as identified by the task force in 2011.
Table 2. Structural Benchmark in Public Financial Management
Area Indicator 2012 targets 1/
end-June end-December
Expenditure Controls
a. Percent of institutional units (State and general government entities)
reporting (on the E-portal of GAO) total budget allocations (including any
revisions), pending outstanding commitments, unpaid commitments, and
arrears data (for both ordinary and investment) at the end of each month,
based on data from their commitment registers.
70% 90%
b. Discrepancy between the total arrears to third parties of non-state
general government entities reported under the E-Portal of GAO using
data from the commitment registers and the total arrears reported through
monthly surveys (% of arrears)
25% 1%
1/ Cumulative target from January 1, 2012.
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