Sunday, February 12, 2012

The new Memorandum of Understanding for Greece


Memorandum of Understanding


Specific Economic Policy Gonditionality

8 February 2012

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 (ΜEFP) 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 polities 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 ail 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.


Budget implementation

For 2012, the annual general government primary deficit should not exceed EUR [2 063] million; and for 2013 and 2014 the primary surplus should be at least EUR [2 678] million and EUR [7 391] 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 lo 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 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 550 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 nationally-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).

· An average reduction by 15 percent in the pensions paid by special schemes subsidised by the state (OTE, PPC, etc.), with the aim of saving at least EUR 200 million; an average reduction by 15 percent in the pensions paid by supplementary pension schemes, with the aim of saving at least EUR 375 million; and an average reduction by 7 percent in the pensions paid by NAT with the aim of saving at least EUR 50 million (net after taking into account the impact on taxes and social contributions).

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;

· Ministerial Decisions to bring down the transfer time from PPC of the property tax proceeds to 2 days

By June 2012, the Government will legislate an average reduction by 10 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 September 2012 on and deliver savings of at least: EUR 114 million (with a carry-over impact of EUR 226 million in 2013) (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); defense spending without prejudice to the defense 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 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.


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 4 500 million by end-2012, EUR 7 500 million by end-2013 and EUR 12 200 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 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, fecilitate 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 counciI 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 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 insure 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 realisation with State aid rules by end-Q1 2012.

· the Government (including the Special Secretariat of SOEs), 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 slate 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 thai 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, OSΕ Group and Trainose increase by at least 25 percent, while their business plans are appropriately updated [Q1-2013]

2.3 Tax police

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. By end-February 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.

By June 2012, the Government will increase 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 installment plans for overdue taxes and social contributions are revised so that the installment plans will only apply to existing overdue amounts below EUR 10 000 for individuals and EUR 75 000 for corporations. Taxpayers applying for an extended installment 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 [Ql-20l2] 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 fulfillment 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;

· 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]

· put in place a new IT system that interconnects all tax οffices.

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-Μarch 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 activity, selection of taxpayers to be audited and management of human resources. The Government wilt 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].

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 fiscalstrategy. [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: i) set up a high-lever steering group, chaired by the PM, that will supervise, monitor and ensure the implementation of administrative reforms; [February 2012] ii) established a stable structure for Inter-Ministerial Coordination; [April 2012] iii) created basic horizontal structures in each Ministry, implementing the relevant procedures with Budgety/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, 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 stale-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 οf 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 ex pea assessment of the new wage grid [Ql-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]

Public procurement

Single Public Procurement Authority (SΡΡΑ)

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 20I2]

· to establish the implementing Regulation for the SPPA. [April 2012]

The SPPA starts its operations to fulfill 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]


The Government presents a detailed plan for the development of the e-procurement platform, including phased roll-out, communication and training, target usage levels, and planned revision to 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 (CPS) 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. This involves their full capability to operate on the e-procurement platform. [Q4-2012]

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 shall start from an analysis of the state of play (flowcharts, procedural phases, actors involved, timelines, statistics). A first Action Plan for reform is developed in agreement with the European Commission. [Q2-20l2]

Government presents drafts of the necessary legislative and organisational measures to implement the Action Plan for consultation with 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 lo confer to the SPPA in this area. The Government proposes an Actron 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 by end-March 2012. 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, including welfare funds and lump-sum schemes.

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]

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:


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 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.

Cuntrolling 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 drugs (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 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. [Q1-20I2]

· 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 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 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-a­vis 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 of its price at the lime 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]

· allowing the reimbursement of newly patented medicines (i.e. new molecules) only after at least 2/3 of the EU countries are already reimbursing them and on the basis of a proper assessment of their cost-effectiveness carried out in other European countries. [Q1-2012]

· excluding from the list of reimbursed medicines those which are not effective or cost-effective 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 drugs 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 non­monetary) 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. [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]

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 m 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-Μarch 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]

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, book­keeping 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 hospital 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]

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]


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 a stress-test exercise built 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, ECΒ 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 complete 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) trough 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 οf 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 decree agreed in consultation with the European Commssion, 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 or 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 Stale, 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 allia, purchase and assumption (transfer order), interim credit institution (bridge banks), and orderly wind down.

To ensure that the system remains well capitalised, by Q2-201 J, the Bank of Greece will conduct a new stress-test exercise, based on end-2012 data, using a methodology determined in consultation wilh the Com mission, ECB and IMF.

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 1requirements.

· 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 lo 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.

· 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:

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.

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.

The Government will revise the HFSF’s governance structure to include a General Council and an Executive Board:

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.

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 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 Government will also reform governance arrangements in the Bank of Greece. In light of the Bank of Greece’s responsibility for resolution, restructuring, and supervision, the authorities will revise the Bank of Greece 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). The Government will also revise the structure and rights of Bank of Greece 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) by end-December 2012


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 to 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.

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 (i.e., laws, presidential decrees, 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;


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. Α 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.

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).

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);

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 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. 2.12 of Law 4014/2011 to further specify the procedure and specific criteria for environmental licencing. [Q2-2012]

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 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]



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 number of licences and price of new licences), in line with international best practice. [Q1-2012]


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]


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]


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

general rules on the ticket prices are established and a decision on the provision of rolling stock is taken. [Q4-2012]


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]

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. [Q2-2012]

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]


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.

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-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.

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]

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


European Regional Development Fund (ERDF) and Cohesion Fund



European Social Fund (ESF)



Target of first half of the year

1,231 (*)


Total annual target

3,730 (**)


(*) of which, 5 major project applications

(**) of which, 15major projects applications

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