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Task Force for Greece: supporting vital reforms for economic recovery and job creation

Commission Européenne - MEMO/13/920   22/10/2013

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European Commission

MEMO

Brussels, 22 October 2013

Task Force for Greece: supporting vital reforms for economic recovery and job creation

What is the role of the Task Force for Greece?

The Task Force for Greece (TFGR) was launched by President Barroso in July 2011 to provide technical assistance to the Greek authorities. The Task Force identifies, mobilises and coordinates technical assistance (TA) requested by the Greek authorities as they seek to implement structural reforms as part of the economic adjustment programme. This technical assistance has a twin objective:

  1. To strengthen the capacity of the Greek administration to design and implement structural reforms to improve the functioning of the economy and society, and create the conditions for sustained recovery and job creation.

  2. To speed up the absorption of EU Structural and Cohesion Funds. Structural and Cohesion Funds bring critical resources to finance investment and overcome obstacles to economic or social progress.

The main beneficiary of technical assistance is the Greek public administration: TFGR assistance helps build the administrative capacity needed to prepare and implement reforms to ensure a better functioning of the economy and better serve the needs of its citizens.

Who works in the Task Force?

The Task Force has around 60 people based in Athens and Brussels. They are made up of staff from a number of Member States or from other organisations with specific knowledge in specific areas of expertise, such as advisory support for structural reforms or administrative capacity building.

This assistance may take the following forms:

  1. Expert missions or workshops to share experience and exchange best practices: Experts have been provided by 25 Member States, Norway and international organisations such as the European Investment Bank, the European Investment Fund, OECD, Council of Europe, IMF, the United Nations Economic Commission for Europe, World Bank, and the European Bank for Reconstruction and Development. Most EU experts come from Austria, Belgium, France, Germany, the Netherlands, Spain and Sweden.

  2. Support through small value contracts financed by the European Commission: This allows more intensive support for specific projects in a short period of time. This type of assistance, usually financed by the European Commission, allows experts to work with Greek project teams over a 3-4 month period to evaluate, design or implement specific reforms. To date, 36 such contracts totalling €420,000 have been arranged by the TFGR, 25 of which from April to September.

  3. Continued support from international or national organisations with specialised know-how in complex reform/change management. Continued presence is needed as appropriate to help to implement complex reform projects and steer change management in the Greek public administration, specifically to closely assist the Greek project managers. The TFGR has arranged for European Commission financing of five agreements totalling €8 million. The TFGR is working on four more agreements to the tune of a further €2.1 million. In addition, the Greek Government has arranged funding from Greek Structural Funds for three agreements (two worth €2.1m with the OECD and one worth €10 million with the WHO).

  4. "Domain leadership": In some instances, a Member State with a strong track record in a particular policy area has become "domain leader". Domain leaders have particularly come from France, the Netherlands, Germany, Spain and Belgium.

Which reforms does the TFGR support?

TFGR is now active in the following areas:

  1. Acceleration of cohesion policy projects;

  2. Access to finance/financial sector;

  3. Reform of public administration;

  4. Budget and taxation;

  5. Anti-money laundering and anti-corruption;

  6. Business environment;

  7. Public health;

  8. Reform of the judicial system;

  9. Labour market and social security;

  10. Migration, asylum and borders;

  11. Enhancing the regulatory framework for transport and utilities and completion of the land registry to facilitate privatisation;

  12. Energy, transport and environment.

In these 12 areas, the TFGR has coordinated and organised technical assistance for 100 projects.

Over half of the technical assistance provided to date has focussed on tax administration/public financial management and central administrative reform. However, the technical assistance provided in the following areas has doubled in volume: better absorption of Structural Funds, anti-money laundering and anti-corruption as well as in support to the privatisation programme, land use and land registry.

How has technical assistance progressed since April?

The past six months have been the busiest in terms of technical assistance since the creation of the TFGR two years ago: almost 30% of the total technical assistance provided by the TFGR was provided during this period. The TFGR arranged 25 small value contracts (compared to 11 in the previous year), which gave more targeted, specialist support for specified projects.

Is technical assistance making a difference?

Important reforms having benefited from technical assistance since the TFGR began are now bearing fruit (see examples below). Nevertheless, in other areas, technical assistance has not yet delivered concrete results as reforms have not yet advanced beyond the preparatory phase. The full benefits of technical assistance will only be seen when well-designed reforms are implemented. This requires sustained commitment to strengthen administrative capacity, and implement change over the coming years. The Task Force continues to stand by the Greek authorities to support them in their efforts.

Examples of reforms supported by technical assistance:

a) Unlocking infrastructure investments

EU clearance and financial support for work to continue on four large motorways - with a combined value of €7.6 billion - is expected in the coming weeks.

Work had been suspended for over three years. During that time, the TFGR has been advising the Greek authorities in their negotiations with the different parties, and facilitated communication of the revised terms for the motorways concessions to the European Commission.

b) Helping to better use EU Structural Funds:

The Greek authorities received €24 billion1 of Structural and Cohesion Funds in 2007-2013. Technical assistance helps the Greek authorities to deal with a backlog of these resources. In this respect, the authorities have agreed to meet specific targets for spending the funds, and speed up the implementation of 180 "priority" projects to be completed by December 2015. They also agreed to simplify administrative procedures and structures responsible for managing structural and cohesion funds.

Disbursement of Structural and Cohesion Funds has increased significantly (from 49% at the end of last year, to 67.5% at the end of September this year) and the agreed targets have been met. This is well above the EU average of 56.4%. Since December 2011, Greece has risen from 18th position to 6th in the EU league table of Structural Funds absorption, representing a much-needed injection of liquidity into the economy.

c) Reform of central government administration

The TFGR and domain leader have provided technical assistance in a key aspect of the economic adjustment programme which is the modernisation of central administration. In January last year, the Greek authorities committed themselves to building a leaner, better coordinated and more efficient state. They set specific targets for evaluating state structures (all public entities, representing about 700,000 staff, to be assessed by this December) or staff to be transferred to a mobility scheme (25,000 employees to be placed in the scheme by this December). Since July 2013, the reform has entered implementation phase and the pace of change has accelerated.

In April-September, the TFGR and domain leader helped the authorities in designing a more efficient organisation of central government ministries and entities, and in facilitating the required mobility of civil servants. The TFGR has helped to set up the framework of a new General Secretariat for inter-ministerial coordination under the authority of the Prime Minister. It has helped with the evaluation of structures of Greek administrative bodies accounting for 360,000 staff so far, including recommendations for reorganisation. It has also helped in the formulation of criteria and principles for the mobility scheme of Greek officials, to which some 4,200 officials have already been transferred.

d) Public finances and tax collection:

The economic adjustment programme foresees the building of strong state institutional machinery capable of ensuring sound financial planning and management, as well as the collection of tax and other state revenues. This strong institutional underpinning is needed to preserve the benefits of recent fiscal consolidation. TFGR technical assistance has played a vital role in building a semi-autonomous revenue administration and streamlining of the local tax office network. It has also contributed significantly to the creation of a revamped General Accounting Office with the capacity for stronger public financial management.

Technical assistance has been instrumental in setting up new structures for public financial management (General-Directorates for Financial Services in Ministries) and public revenue administration (setting up an Internal Review Unit within the General Secretariat for Public Revenue), and supporting them as they take up their functions. There are signs of increased efficiency on the part of the tax administration: the number of completed audits of large taxpayers has more than doubled over the first seven months of this year compared to last year (164 vs 66).

e) Anti-money laundering and anti-corruption

Technical assistance has provided support for a national anti-corruption strategy and the appointment of a National Co-ordinator to oversee its implementation. Implementation of most of the agreed actions has begun. Over 500 officials have benefitted from training in anti-money laundering techniques. Technical assistance was used to frame legislation setting-up the new registry of bank accounts needed to combat money-laundering (operational since last month). Technical assistance has enhanced the capacity of the Financial Intelligence Unit, resulting in the reporting of 1130 cases of suspected tax evasion to the authorities, the transmission of 313 cases to the Prosecutor's Office and freezing of assets worth €133 million.

f) Agreement on WHO support for the “Health in action” programme

In July, the Greek Government signed an ambitious Contribution Agreement with the World Health Organisation (WHO). This agreement will pave the way for financing and providing technical assistance worth €10 million to implement the strategic priorities of the "Health in Action" health reform strategy.

1 :

€24.3bn represents the total available from the EU budget (€20.2bn), complemented by the Greek national contribution.


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