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European Commission

MEMO

Brussels, 17 December 2012

Questions and Answers on the Task Force for Greece

The Task Force for Greece, launched by President Barroso in July 2011 to provide technical assistance, publishes its third progress report today. The Task Force, which has personnel in both Athens and Brussels, identifies and coordinates the technical assistance that Greece needs to help it deliver on its commitments in the context of its economic adjustment programme, and to accelerate the absorption of EU funds. Assistance focuses on measures to enhance competitiveness, growth and employment.

Is the Task Force making progress?

The work of the Task Force for Greece (TFGR) is gathering momentum. The delivery of technical assistance slowed between March and June, when two rounds of elections took place. But since its appointment, the new government has intensified its cooperation with the TFGR in several areas. The TFGR is now active in over 40 technical assistance (TA) projects in 10 different policy domains: (1) acceleration of cohesion policy projects; (2) access to finance/financial sector; (3) reform of the public administration; (4) budget and taxation; (5) anti-corruption; (6) business environment; (7) public health; (8) reform of the judicial system; (9) migration, asylum and borders; (10) labour market and social security. In addition, discussions are ongoing about the provision of technical assistance in some other areas (tourism, completion of the land registry).

Greece faces many challenges. Wide-ranging and deep structural reform is needed to lay the foundations for enterprise-driven growth. This level of transformation will take both time and sustained effort by the Greek authorities, with the support of their European partners. The TFGR is a tool at the disposal of the Greek authorities as they seek to implement the necessary modernisation of their public administration and economy.

How exactly is the TFGR assisting?

In response to demands expressed by the Greek authorities, the TFGR organises the delivery of TA to support a wide range of structural reforms to be implemented by the Greek government, primarily for reforms agreed in the context of the economic adjustment programme. The Greek authorities have identified the most important needs in terms of their urgency, maturity and contribution to lasting structural reform in Greece.

For the different reform processes in which it is involved, the TFGR typically assists by agreeing a work programme with the Greek authorities. This usually specifies clear deliverables, deadlines and intermediate milestones, terms of reference for TA assignments, and defines the required resources and the Greek entities whose involvement will be needed.

The TFGR mobilises expertise or relevant support from Member States and other potential providers of TA. These assistance providers include by now about 20 Member States and a number of international organisations (EIB, EIF, OECD, Council of Europe, IMF, World Bank, EBRD) plus EFTA, EEA states Norway and Iceland.

What form does the TA take?

TA can be provided in the following ways:

  • short term expert missions or workshops where national administrations present their suggestions for TA to their Greek counterparts, enabling them to identify the most suitable solution for their needs: this type of work has been very typical in the initial, diagnostic stages of our work – to identify needs and develop first ideas on remedial action;

  • more sustained support from particular EU Member States or organisations with specialised know-how. This can involve the longer-term presence of experts or cooperation with the Greek authorities to provide technical solutions in areas like ICT. This type of assistance is increasingly needed to help to implement complex reform projects and steer change management in the Greek public administration. It requires sustained presence on the ground to assist the Greek project managers on an on-going basis. This is resource-intensive activity. The TFGR helps by identifying project partners for the Greek authorities and arranging where possible the financing of the necessary assistance.

  • in some instances, a Member State government with a strong track-record in a particular policy field has assumed the responsibility of a "domain leader". The domain leader is involved at an early stage of the project, including in the definition of roadmaps. In these instances the TFGR facilitates ongoing cooperation between the Greek authorities, the domain leader and other TA providers.

The matching of TA supply and demand is organised through quarterly high-level coordination meetings, organised by the TFGR and involving Greek authorities, present and potential TA providers and European Commission services. Furthermore, the TFGR assists the Greek authorities with the supervision and monitoring of all agreed projects.

Which are the areas in which most has been achieved so far?

The areas where technical assistance coordinated by the TFGR has gained the most traction are public finance management and tax administration; administrative reform of the central government; reform of health policy; and reform of export and customs administration.

More recently, good progress has been made in preparing the ground for reforms in the area of anti-corruption, anti-money-laundering and business environment.

The TFGR along with other Commission services has also invested considerable effort in helping Greek authorities to simplify procedures and remove blockages to the disbursement of EU structural funds.

Detailed examples

(1) Acceleration of cohesion policy projects

The TFGR, along with other Commission services, is supporting the Greek authorities in their attempts to speed up the implementation of 181 priority Structural Fund projects. These efforts seek to address project specific problems and remove recurrent administrative impediments through simplification of procedures.

Assistance from the TFGR focussed in particular on the motorway concessions and waste management where, for the latter, the TFGR is preparing a response to a request for technical assistance. In several projects involving support for social policy and labour markets, external support has also been mobilised. The recent appointment of designated coordinators at the Ministry of Development will help to sustain improvements in this area. The TFGR also provided technical assistance for the setting up of a special unit for coordination and implementation of EU co-financed actions within the Ministry of Shipping.

(2) Access to finance and financial sector measures

The proposal for the creation of an Institution for Growth, which could finance the Greek economy, was presented in October 2012. This was endorsed by the Minister of Development as the basis for future work. The TFGR participated actively in preparatory committee. Work has moved into a second phase, involving the preparation of a sound gap analysis.

Furthermore, disbursements of loans to Greek SMEs have begun from the JEREMIE scheme.

(3) Reform of the public administration

Significant progress has been made in the steering and coordination of this far-reaching reform. A high-level transformation steering group under the Prime Minister’s authority has been created to supervise reform of the central administration. Final steps will now be taken to commence implementation in early 2013, including the submission of the relevant enabling laws to Parliament.

The assessment of structures of key ministries, assisted by coaches from Member States, is now starting. Preparatory work for the assessment of staff competences is also getting underway. The Greek government has also started to merge some of its agencies.

(4) Budget and taxation

The modernisation of the Code of Books and Records (tax record-keeping) has begun and will be implemented in a staged way until end 2013, building on technical assistance from both the TFGR and the IMF. This should kick-start a process whereby a major stumbling block both in terms of business environment and in terms of improvement of tax administration (tax auditors currently focus more on compliance with the requirements of the CBR on book and record-keeping than on fighting real fraud) will disappear. Income tax reform is underway.

In line with EC/IMF TA advice on institutional reform of the tax administration and memorandum requirements, legislation governing the powers of the new head of the tax administration has been adopted, giving the new head enlarged powers and a five-year mandate to steer change in the Greek tax administration. The post is currently vacant but is expected to be filled by January 2013.

Legislation has been adopted to improve the tax audit function, in terms of "firepower", by making it possible to recruit new auditors coming from other sectors of the Ministry of Finance. Legislation has been passed to strengthen the legal framework applicable to indirect methods of audit, which are a major tool in order to fight tax evasion, especially from high-wealth individuals (HWI). Training is currently being dispensed in this area, which has already benefited 50% of HWI auditors in the Greek tax administration.

Regarding debt collection, building on the 2011 achievements (€946m of old debt collected instead of a target of only €400m), the Greek tax administration has strived to introduce innovative collection methods in the network of large tax offices which are responsible for the bulk of revenue collection.

The TFGR has been marshalling TA from various Commission services and Member States and supports the completion of negotiations of a tax agreement in the banking sector between the Greek government and Switzerland.

As regards public financial management, there have been strong achievements in the fiscal reporting sector, with ability to provide real data on the general government budget outturn on a monthly basis (this is on a more frequent basis than in almost all other EU Member States) and in the field of budget preparation.

Expenditure control has improved, focusing especially on inspections in line ministries and general government entities in order to monitor spending arrears (over €8.3bn) and to enable their speedy repayment once Greece´s cash situation allows it. Furthermore, implementation has started of a roadmap for improving the effectiveness of the Hellenic Court of Audit.

(5) Anti-corruption measures / Anti-money laundering

Greek agencies responsible for preventing, detecting and prosecuting corruption have agreed an action plan. This is paving the way for the quick launch of a detailed anti-corruption strategy, headed by a national coordinator. A roadmap describing concrete operational measures was signed by Greek ministers in early October.

As regards anti-money laundering the Greek Financial Intelligence Unit (FIU) has reported 418 cases of suspected tax evasion to the tax authorities and to the tax investigation service (SDOE). Since the beginning of 2012, 267 cases relating to confirmed tax evasion have been sent to the Prosecutor´s office and assets worth €60m have been frozen.

In addition to training sessions and in order to boost efficient exchange of information between relevant agencies and the financial sector, a project has started to look at the possibilities for an indirect registry of bank accounts with a view to be implemented at the start of 2013. Between 1 January and 3 December 2012, €94,575,505 of criminal assets were frozen by the FIU for money laundering related to tax evasion.

Furthermore, an agreement has been reached on an 18-month training programme for financial investigators to strengthen awareness, deepen knowledge on methods and deliver training on the job. Two seminars for 120 financial investigators were already delivered, as well as a seminar on Internet search techniques for 40 investigators and one specifically developed seminar for 28 managers responsible for anti-money laundering.

(6) Business environment

The Task Force has provided extensive assistance to the Greek authorities, to help them in finalising an ambitious and comprehensive plan for reform of exports and customs procedures – through the organisation of diagnostic missions, workshops, mobilisation of experts from UNECE and Member States. The Greek action plan was published on 01/11/12 and is now moving into implementation phase. The TFGR is also working closely with a team of Dutch experts to advise the Greek authorities on how to strengthen national support for exporting companies.

The TFGR has arranged for the involvement of the OECD to undertake screening of the regulatory framework in 4 major sectors of the Greek economy (retail distribution, construction materials, processed food, tourism) to identify obstacles to competition and market access. The OECD is also working with the Greek authorities on a project to remove administrative burdens.

The TFGR has provided extensive input to the GR authorities in preparing important legislative reforms to liberalise regulated professions. The TFGR has successfully contributed to the screening of secondary legislation for the remaining professions, as well as the drafting of an Omnibus Law reinstating justifiable restrictions.

The TFGR is also provided technical assistance to the Greek authorities to improve the organisation of public procurement, and facilitate bulk buying through framework agreements in order to reduce prices.

(7) Public health

A Health Reform Steering Committee was established in September 2012 to supervise, coordinate and monitor reform in the management of the national organisation for healthcare (EOPYY), pharmaceutical policy, hospital management, primary healthcare and health tourism. Technical assistance aims to stabilise expenditure cuts through a coherent strategy to ensure sustainability and fairness of the healthcare system. Greece signed a Memorandum of Understanding with Germany in February 2012 to structure this technical assistance.

Financing of the healthcare system is now scrutinised in a more coordinated effort between the Ministry of Health, Ministry of Labour and Social Security and Ministry of Finances.

The national organisation for healthcare, EOPYY, is initiating its consolidation with for instance the readjustment of the contribution rates or the effective implementation of controls on doctors. This has been made possible with the high degree of penetration of the e-prescription system within prescribers and pharmacies. The reorganisation of hospitals has started with the reduction of legal bodies (from 133 to 85) together with the mergers of hospitals initiated in Attica region and to be pursued in Thessaloniki for the end of the year. Management of hospitals is also being looked at carefully with the reinforcement of central tenders and an increased use of generic medicines.

(8) Reform of the judicial system

In the field of e-justice, initiatives are being taken forward with the support of the TFGR. Actions have been focusing notably on improving the processing of minutes of court proceedings, electronic judgements, e-tracking of the status of individual cases, electronic filing and electronic registration of legal documents. The TFGR has been providing support in ensuring all necessary funds to cover e-justice projects and compliance with the relevant targets of the economic adjustment programme are made available through the National Strategic Reference Framework.

(9) Migration, asylum and borders

Recently, Greece has managed to significantly curb irregular migration flows into the Schengen area. Within a few months, the government coordinated a redeployment of border guards and equipment to the north-eastern external borders, making good use of financial support from the Commission and cooperating with Member States via the EU borders agency Frontex. In parallel, Greece is working on building up a reformed asylum and first reception system that fully complies with international protection rules and EU obligations.

(10) Labour market and social security

In the context of sharply rising unemployment, the TFGR is supporting the modernisation of the public employment service (OAED). A new roadmap has been developed with support from Member State experts from Public Employment Services (PES) to prepare an "OAED Reform Project". Technical assistance and advice have also been mobilised to tackle youth unemployment through an enhancement of the draft Greek Action Plan. The TFGR is also involved with the International Labour Organisation (ILO) in strengthening the Labour Inspectorate (SEPE) to fight undeclared work. Furthermore, work is also under way to support the Greek authorities in establishing better conditions of a social economy ecosystem, inter alia via Member States' experts advising on the introduction and development of the social economy, and helping to devise plans for creating support networks for social enterprises at national and local level.

What does the TFGR do to support the privatisation programme and Greek utilities?

Under new leadership, the Hellenic Republic Asset Development Fund (HRADF), has recently reinvigorated the privatisation process and has intensified its relationship with TFGR. The role of the TFGR in this area is focussed primarily on provision of technical assistance to create the appropriate regulatory conditions for the operation of utilities. Line Ministries have also expressed their determination to seek further cooperation with the TFGR especially in the formulation of regulatory policies in areas including water, ports, airports and energy. Discussions are taking place to examine the possibilities for technical assistance over real estate privatisation.

The TFGR provided inter alia technical assistance for the preparation of the National Ports Strategy version 1. Further to a request of the Ministry of Shipping, the TFGR assisted the Ministry also in the organisation of a workshop on “Regulatory Framework for Greek Ports”.

On energy, with an unsustainable subsidy scheme for renewables, the Greek authorities have started to make changes in order to reduce charges for end-users without jeopardising this promising energy source. Longer term TA will help to develop large-scale deployment of solar and wind energy, both for the domestic market and for export.

In September 2012 the Ministry of Environment requested the support of the Task Force for Greece for the planning, tendering and monitoring of the project on the completion of the land register (approximately 15 million property rights). The TFGR has identified four Member States which are ready to cooperate for this technical assistance: Austria, the Netherlands, Germany and Spain.

How is the TFGR funded?

There is no specific budget earmarked for the Task Force. The TFGR first identifies the relevant needs (e.g. the transfer of expertise from national or international organisations, or at a later stage, the provision of particular services or projects).

It then mobilises resources from the EU budget such as technical assistance budgets under the cohesion policy instruments managed centrally by the Commission and/or proposes the use of unallocated resources from cohesion policy funds earmarked for Greece and available under shared management with the Greek authorities.

How is the TFGR staffed?

The TFGR is under the direct responsibility of the Head of the Task Force, Horst Reichenbach and is under the political guidance of Vice President Rehn. It reports to the President of the Commission and to relevant Commissioners, including the Commissioners responsible for Regional Policy (Commission Hahn) and for Employment, Social Affairs and Inclusion (Commissioner Andor).

The TFGR consists mainly of Commission staff and national experts seconded from Member States' ministries. There are presently 54 persons working in the TFGR, of which 32 at the headquarters in Brussels and 22 in the TFGR office in Athens. The Head of the TFGR Athens office is Ms Georgette Lalis.

Who pays for technical assistance providers?

Commission officials detached to TFGR receive their normal salary from the Commission, with possible mission expenses covered from the EU budget. Salary costs of national experts are paid by their home countries. The Commission has financed a number of contracts of varying sizes from its own technical assistance budget.

Other operational and administrative costs are covered by the available EU budget, in full accordance with the established budgetary procedures.


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