COMMUNICATION FROM THE COMMISSION TO THE COUNCIL Follow-up to the Council Decision 2010/320/EU addressed to Greece, with a view to reinforcing and deepening fiscal surveillance and giving notice to Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive deficit
Date: 2010-12-09
Institutions: European Commission
Subjects: Greece, anti-crisis plan, budget deficit, budget policy, budgetary control, economic recession

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EUROPEAN COMMISSION 

Brussels, 9.12.2010 
COM(2010) 739 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL  

Follow-up to the Council Decision 2010/320/EU addressed to Greece, with a view to 
reinforcing and deepening fiscal surveillance and giving notice to Greece to take 
measures for the deficit reduction judged necessary to remedy the situation of excessive 
deficit

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL  

Follow-up to the Council Decision 2010/320/EU addressed to Greece, with a view to 
reinforcing and deepening fiscal surveillance and giving notice to Greece to take 
measures for the deficit reduction judged necessary to remedy the situation of excessive 
deficit 

1. 

INTRODUCTION 

This  Communication  assesses  the  measures  implemented  by  Greece  in  the  period  between 
July  and  mid  November  2010  to  comply  with  the  Council  Decision  2010/320/EU.1  Action 
taken  up  to  July  was  assessed  in  the  Communication  dated  19.8.2010.2  Together  with  a 
companion Commission staff's report, prepared in liaison with the ECB,3 it also contributes to 
the assessment of compliance with the MEFP and the MoU,4 in the context of the loan facility 
agreement between Greece and the euro-area Member States. 

This  assessment  is  based  on  the  report  submitted  to  the  Council  and  the  Commission  by 
Greece,5 and on the mission conducted by European Commission staff together with IMF and 
ECB  in  the  context  of  the  economic  adjustment  programme  which  is  being  financed  by 
bilateral loans by the euro-area Member States and an IMF's stand-by arrangement. The report 
submitted  by  Greece  discusses  not  only  the  fiscal  measures  that  aim  at  reducing  the 
government deficit ratio in 2010, but also the wide-ranging structural reforms that are being 
adopted and implemented by the Greek government.  

2. 

THE COUNCIL DECISION OF 10 MAY 2010 

On 10 May 2010, the Council adopted Decision 2010/320/EU, under Articles 126(9) and 136 
TFEU, addressed to Greece, with a view to reinforcing and deepening the fiscal surveillance 
and giving notice to take measures for the deficit reduction judged necessary  to remedy the 
situation of excessive deficit by 2014.  

The Council Decision requires Greece to adopt a number of specific measures with the aim of 
keeping general government deficit below the following ceilings: 

•  EUR  18 508  million  (7.8  percent  of  GDP,  on  the  basis  of  the  latest  nominal  GDP 

projections) in 2010; 

1 
2 
3 

4 

5 

OJ L 241, 14.9.2010, p. 12. 
COM (2010) 439 final 
‘The Economic Adjustment Programme for Greece – Second Review,’ European Economy–Occasional 
Papers,  72  November.  The  reader  is  referred  to  that  document  for  a  more  detailed  assessment  of 
macroeconomic, financial, fiscal and structural reform developments. 
Memorandum  of  Economic  and  Financial  Policies,  and  Memorandum  of  Understanding  of  Specific 
Economic Policy Conditionality of 3 May, updated 6 August 2010. 
The  Economic  Adjustment  Programme  for  Greece  –  Report  submitted  in  accordance  with  Council 
Decision – November 2010. A first part of the report has been submitted by the Greek government on 
15 November 2010; the complete report was submitted on 24 November 2010. 

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•  EUR 17 065 million (7.5 percent of GDP) in 2011; 

•  EUR 14 916 million (6.4 percent of GDP) in 2012; 

•  EUR 11 399 million (4.8 percent of GDP) in 2013 and 

•  EUR 6 385 million (2.6 percent of GDP) in 2014.6 

The  Decision  was  then  amended  on  7  September  2010  (Decision  2010/486/EU).7  However, 
the aforementioned ceilings for the general government deficit were kept unchanged. 

3. 

BUDGETARY EXECUTION  

The previous communication assessed budgetary developments until July as broadly on track. 
However,  it  also  raised  attention  to  state  revenue  increasing  by  less  than  planned,  less 
favourable developments in social security and local government accounts and accumulation 
of arrears.  

Over  the  last  four  months,  budgetary  implementation  has  become  more  difficult.  From 
January to October 2010, the state cash deficit fell by 30.2 percent (46 percent up to June) as 
compared  to  2009.  Tax  revenue  disappointed.  From  January  to  September  2010,  total  state 
revenue increased by 3.4 percent (5.9 percent up to June). The official estimate prepared in 
May, when the Council Decision was adopted, and the economic adjustment programme for 
Greece was agreed, was of an increase in revenue for the year as a whole of 15.6 percent. A 
pick-up in revenue is expected in November and December, as the implementation of the full 
effect of the VAT and excise increases will feed through, and thanks also a recently-adopted 
‘tax settlement.’8 However, the revenue target will not be reached. At this moment, the Greek 
General  Accounting  Office  (GAO)  estimates  that state  revenue  for  the  year  as  a  whole  will 
increase by 7.4 percent. 

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8 

The ratios to GDP are indicative. In the Council Decision, the ratios-to-GDP refer to the nominal GDP 
figures available in May: 8.0, 7.6, 6.5, 4.9 and 2.6 percent of GDP for 2010 to 2014, respectively. The 
adjustment path established by the Decision requires that the annual increase in the general government 
consolidated gross debt does not exceed: EUR 34 058 million in 2010; EUR 17 365 million in 2011; 
EUR 15 016 million in 2012; EUR 11 599 million in 2013 and EUR 7 885 million in 2014. Taking into 
account  the  revised  debt  figures  at  the  end  of  2009  and  the  latest  nominal  GDP  projections,  this 
corresponds to debt ratios of 143, 153, 157, 158 and 156 percent of GDP for 2010 to 2014, respectively. 
OJ L 145, 11.6.2010, p. 6.  
Most taxpayers have the opportunity of making a payment to the tax agency in 2010 (with a second and 
final instalment in 2011) in exchange of not having their income statements for years up to 2009 (Law 
3888/2010). 

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Table 1: State budget execution 

2009 

2010 

2009 

cash basis 
(EUR million) 

Jan - Oct 

% 
change 

Outcome 

Total revenue 

40928 

42361 

Revenue before refunds 
Tax refunds 
Capital revenue 

43477 
3964 
1415 

44611 
3618 
1368 

Total expenditure 

65761 

59695 

Primary expenditure 
Interest 
Capital expenditure 
Other 

45665 
12074 
8022 
0 

40566 
12742 
6047 
340 

3,5 

2,6 
-8,7 
-3,3 

-9,2 

-11,2 
5,5 
-24,6 

50531 

53443 
4952 
2040 

81403 

57992 
12325 
9588 
1498 

May-
2010 
plans 

55715 

57800 
5100 
3015 

75187 

52633 
13209 
9000 
345 

2010 

% 
change 

latest 
official 
estimate 

% 
change 

10.3 

8.2 
3.0 
47.8 

-7.6 

-9.2 
7.2 
-6.1 
-7.7 

54280 

56488 
5100 
2892 

74903 

52798 
13260 
8500 
345 

7,4 

5,7 
3,0 
41,8 

-8,0 

-9,0 
7,6 
-11,3 
-77,0 

-33,2 

State Budget balance 

-24833 

-17334 

-30,2 

-30872 

-19472 

-36.9 

-20623 

Source: GAO. 
Note: This tables does not include spending for military procurement (EUR 500 million up to October, and an estimate 
of EUR 1 500 million for the year as a whole, declining by 30 percent as compared to 2009). 

Concerning the spending side of the state accounts, cash outflows during the first ten months 
of the year contracted by 9.2 percent (16.9 percent up to June); this compares with plans (of 
May 2010) of a reduction in state payments for the year as a whole of 7.6 percent. However, 
the data provision on accounts payable and accumulation of arrears have been only sporadic, 
resulting in a relatively opaque view of underlying spending. 

Monthly data on infra-annual budgetary execution by social security and local government is 
not  as  detailed,  and  of  lesser  quality,  than  on  the  state  budget.  Available  information  is 
derived  from  banking  statistics  without  expenditure  and  revenue  details.  It  indicates  that 
social security and local government may register a combined balance in a cash basis that is 
around 1 billion below the May 2010 plans.  

In  August,  the  government  had  committed  to  under-execute  primary  spending  by  EUR  3.9 
billion (revised to EUR 5.9 bn in September) relative to programme projections, with the aim 
of  offsetting  slippages  in  tax  collection  and  the  less  favourable  data  in  social  security  and 
local  government.  There  is  evidence  that  the  government  may  only  partially  deliver  on  its 
commitment  to  under-execute  expenditure  plans,  in  particular  concerning  spending  in 
investment. Although it is feasible to spend less in the last weeks of the year than currently 
planned  by  the  GAO,  any  end-year  compression  in  spending  should  not  be  made  at  the 
expense of a further increase in arrears. 
According  to  the  Commission  autumn  forecasts9  the  ESA95  deficit  for  2010  will  be  22.3 
billion (9½ percent of GDP, 1¾ percent of GDP above the original programme  target). The 
non  observance  of  the  ESA  deficit  target  for  the  2010  reflects,  to  a  large  extent,  the 
materialization  of  risks  that  had  been  previously  identified.  These  risks  are  related  to  (i)  a 
deeper recession  and  liquidity  constraints, which weigh on revenue collection; (ii) delays in 
improving  tax  compliance,  reflecting  shortcomings  in  the  implementation  of  reforms  to 
improve tax administration, and (iii) some difficulties in controlling expenditure in particular 
in capital budget and by local government and social security. Moreover, (iv) the revision by 

9 

European Economic Forecast - Autumn 2010, European Economy, 7, November.  

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ELSTAT  of  Greek  fiscal  statistics10–in  particular  the  reclassification  of  a  number  of  state-
owned  enterprises  into  general  government–explains  around  one  third  of  deviation  vis-à-vis 
the deficit target.  

The government debt at the end of 2010 is expected to reach EUR 328 billion, 141 percent of 
GDP,  an  increase  of  EUR  29  billion.  This  compares  with  the  ceiling  for  the  increase  in  the 
debt level of EUR 34 billion in the Council Decision.  

3. 

BUDGET FOR 2011 AND PROSPECTS FOR 2012-2014 

The  Greek  Government  has  confirmed  its  commitment  to  meet  the  fiscal  target  for  2011 
established  by  the  Council  Decision.  With  higher  than  expected  starting  deficit  and  debt 
levels,  and  lower  than  expected  GDP,  larger  consolidation  efforts  are  necessary.  The  fiscal 
strategy remains firmly anchored on the consolidation path agreed in May 2010. The Greek 
Government  therefore  decided  to  fully  recoup  the  ground  lost  in  2010,  in  order  to  restore 
rapidly  a  sustainable  fiscal  position,  keep  financing  needs  in  line  with  the  programme,  and 
support market confidence. The 2011 budget–tabled in Greek Parliament on 18 November – 
contains 2½ percent of GDP in new deficit-reducing measures. 

Most  of  the  new  measures  are  structural  and  directly  address  some  of  Greece’s  endemic 
budgetary weaknesses. They will bring total fiscal consolidation measures in 2011 – including 
those agreed in May – to 5¾ percent of GDP. About two thirds of the new measures agreed in 
November are on the expenditure side, and most of them are of a structural nature; EUR 0.7 
billion,  or  0.3  percent  of  GDP,  of  measures  are  temporary.  Measures  include  cuts  in 
unproductive and untargeted spending, a reduction in short-term contracts in the public sector, 
better targeting of universal household subsidies (like the subsidies for heating fuel and family 
allowances), and better management and use of state assets, particularly in the collection of 
taxes in arrears. The 2011 budget also starts tackling two key structural problems – excessive 
health spending and losses by state owned enterprises:  
•  Health  expenditure.  Public  expenditure  on  health  accounted  for  5.9  percent  of  GDP  in 
2008, and grew on a per capita basis at an average real rate of 5.4 percent over 2004-08. 
Public expenditure on pharmaceuticals is 1.9 percent of GDP in Greece, against 1 percent 
of GDP, on average in the EU. Should past trends continue, the share of health spending in 
GDP  would  increase  dramatically  in  the  coming  years.  The  government  started  to 
introduce reforms in 2010, and these have begun to yield results. Further measures will be 
implemented  in  the  first  half  of  2011  to  reduce  spending  on  pharmaceuticals,  enhance 
spending  control,  and  reduce  hospital  operating  expenses.  These  actions  are  expected  to 
generate about ½ percent of GDP in savings.  

•  State-owned enterprises (SOEs). Several SOEs have been running large losses over many 
years. The biggest deficits originate in public transport enterprises, where payroll alone in 
some  cases  exceeds  total  revenue.  Some  progress  has  been  made  in  2010,  in  particular 
through  cuts  in  operating  expenditure  and  employment,  and  with  the  publication  of  the 
financial statements (certified by external auditors) of the largest loss-makers. In 2011 the 
government  will  further  reduce  wages  in  SOEs  by  10  percent,11  limit  allowances  to  10 
percent of basic pay, and introduce a ceiling of EUR 4 000 per month for gross wage (12 

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11 

For  detailed  information  see  the  Eurostat’s  ‘Information  Note  on  Greek  Fiscal  Data’  (15  November 
2010), available at the Eurostat website. 
On top of the wage cuts decided in the course of 2010 which were applicable both to civil servants and 
SOEs’ employees. 

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payments  per  year).  In  addition,  to  address  the  specific  problem  of  transport  enterprises, 
urban transport tariffs will be increased by at least 30 percent. About ½ percentage points 
of GDP are expected from these measures. 

According to the 2011 budget, the government deficit (ESA95) is expected to be 16.8 billion 
(7.6 percent of GDP), slightly below the ceiling of EUR 17 billion, in the Council Decision. 
The Commission forecasts are very close to the budget. The reduction in the government ratio 
in  2011  will  therefore  be  effectively  larger  than  planned  in  the  original  programme–2.2 
percentage points instead of 0.4 points.  

The measures in the 2011 budget are not enough to durably reduce the deficit and ensure the 
deficit target for 2012 to 2014 are met. The Greek government has committed to specify fiscal 
structural measures to achieve the 2012-14 targets. These measures will be part of a strategic 
paper to be prepared in the first quarter of 2011. Present estimates suggest a need to identify 
at least 5 percent of GDP in additional structural measures on top of those already announced 
in May 2010. These measures need to come from durable revenue and spending adjustments 
in several fields: improvements in tax administration and fight against tax evasion; reduction 
in the public workforce through a strict implementation of a rule of 1 recruitments for 5 exits, 
without sectoral exceptions; reforms of the healthcare and education systems; structural cuts 
in military spending and a multi-year reform of state-owned enterprises including the merger 
and closure of units. 

6. 

PROGRESS WITH STRUCTURAL REFORMS  

The structural reform agenda in Greece is wide. Progress has been achieved in structural fiscal 
reforms, though in several cases slower than planned. There has been progress in improving 
tax  administration  and  controls,  enhance  the  timely  provision  of  reliable  fiscal  data, 
strengthening budgetary institutions and the new organic budget law providing for multi-year 
budgeting. A first phase of the pension reform was adopted before the summer recess and will 
be completed in 2011. Preparations are starting for comprehensive reforms of the health care 
system and education. The functional review of central administration and social programme 
and the simplified remuneration system for the public sector have faced delays. After a first 
wave of labour market reforms before the summer, there have been delays in a second wave 
concerning the wage bargaining mechanisms and the system of mediation and arbitration. 

The  privatisation  plan  announced  during  the  summer  is  not  ambitious  enough,  as 
privatisations  are  planned  to  be  conducted  mostly  through  concession  agreements,  with 
outright  sales  playing  a  smaller  role.  However,  the  Government  committed  to  increase 
privatisation proceeds (including sales of real estate) from EUR 1 billion in 2011 to EUR 3 
billion  per  year  in  2012  and  2013.  The  Government  has  committed  to  use  the  privatisation 
proceeds are to be used to redeem debt and not to reduce the fiscal consolidation efforts. 

7. 

COMPLETENESS OF REQUIRED INFORMATION 

The  report  submitted  by  Greece,  and  data  regularly  transmitted  to  the  Commission  includes 
most of the information requirements established by the Council Decision. In particular, the 
report  contains  detailed  information  on  concrete  measures  implemented  (and  to  be 
implemented)  in  order  to  comply  with  the  Decision  and  their  respective  budgetary  impact. 

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Data  on  the  monthly  state  budget  execution  have  been  timely  provided  by  the  General 
Accounting Office. 

The  report  also  contains  the  required  information  in  relation  to  debt  issuance  and 
reimbursements,  and  on  the  financial  situation  of  the  largest  public  enterprises.  However, 
monthly  data  on  the  budgetary  implementation  by  social  security  funds,  extra-budgetary 
bodies and local government, information on public sector employment, expenditure pending 
of payment (including arrears) are still incomplete. Moreover, the report contains a wealth of 
information  concerning  the  implementation  of  structural  reforms  in  response  to  the  Council 
Recommendation of 16 February 201012 and to comply with the MEFP and MoU. 

8. 

CONCLUSION  

The  government  deficit  (ESA95  basis)  ceiling  for  2010  established  by  Council  Decisions  is 
going to be missed by around 4.2 billion, as it is planned to reach 9½ percent of GDP. This 
amounts  to  a  reduction  in  the  deficit  ratio  of  almost  six  points  as  compared  to  2009.  The 
government debt ratio is expected to increase from 127 percent of GDP at the end 2009 to 141 
percent in 2010. The increase in debt is in line with the Council Decision. 

For  2011,  the  budget  tabled  in  Parliament  is  in  line  with  the  Council  decision  ceilings. 
However  further  durable  measures  will  be  necessary  to  keep  reducing  the  deficit  in 
subsequent years and put an end to the excessive deficit by 2014. 

Greece  has  been  adopting  the  specific  measures  indicated  in  the  Council  Decision,  though 
there  are  delays  in  a  number  of  areas  and  the  reform  rhythm  appears  to  have  slowed  down 
from before to after the summer recess. 

Therefore,  the  Commission  concludes  that  Greece  is  satisfactorily  complying  with  the 
Council  Decision  of  10  May  2010,  responding  to  the  Council  Recommendation  of  16 
February 2010 and implementing the measures outlined in the updated MEFP and MoU of 6 
August 2010. 

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Council  Recommendation  (2010/190/EU)  to  Greece  of  16  February  2010  with  a  view  to  ending  the 
inconsistency  with  the  broad  guidelines  of  the  economic  policies  in  Greece  and  removing  the  risk  of 
jeopardising the proper functioning of the economic and monetary union (OJ L 83, 30.3.2010, p. 63). 

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ANNEX I:  MEASURES REQUIRED BY THE COUNCIL DECISION, TO BE ADOPTED BY END-SEPTEMBER 2010 

Measures (as required by Article 2(2) of the Council Decision) 
“Greece shall adopt the following measures before the end of September 2010: 
(a)  fiscal  consolidation  measures  amounting  to  at  least  3,2  %  of  GDP  (4,3  %  of  GDP  if 
carryovers from measures implemented in 2010 are considered) to be included in the draft 
budget for 2011: a reduction in intermediate consumption of the general government by at 
least EUR 300 million compared to the 2010 level (on top of savings stemming from the 
reform  of  public  administration  and  of  local  government  referred  to  in  this  paragraph);  a 
freeze in the indexation of pensions (with the aim of saving EUR 100 million); a temporary 
crisis  levy  on  highly  profitable  firms  (yielding  at  least  EUR  600  million  in  additional 
revenue per year in 2011, 2012 and 2013); a presumptive taxation of professionals (with a 
yield  of  at  least  EUR  400  million  in  2011  and  increasing  returns  by  at  least  EUR  100 
million  per  year  in  2012  and  2013);  a  broadening  of  the  VAT  base  by  including  certain 
services currently exempted and by moving 30 % of goods and services from the reduced 
rate  to  the  main  rate  (with  a  yield  of  EUR  1  billion);  a  phased-  in  green  tax  on  CO  2 
emissions  (with  a  yield  of  at  least  EUR 300  million  in  2011);  the  implementation by  the 
Government of the legislation reforming the public administration and a reorganisation of 
local government (with the aim of reducing costs by at least EUR 500 million in 2011, and 
additional  EUR  500  million  in  each  year  2012  and  2013);  a  reduction  in  domestically-
financed  investments  (by  at  least  EUR  500  million)  by  giving  priority  to  investment 
projects  financed  by  EU  structural  funds,  incentives  to  regularise  land-use  violations 
(yielding at least EUR 1 500 million from 2011 to 2013, of which at least EUR 500 million 
in 2011); a collection of revenue from the licensing of gaming (at least EUR 500 million in 
sales of licences and EUR 200 million in annual royalties); an expansion of the base of the 
real  estate  tax  by  updating  asset  values  (to  yield  at  least  EUR  400  million  additional 
revenue); an increased taxation of wages in kind, including by taxing car lease payments 
(by at least EUR 150 million); an increased taxation of luxury goods (by at least EUR 100 
million);  a  special  tax  on unauthorised  establishments  (to  yield  at  least  EUR  800  million 
per year) and a replacement of only 20 % of retiring employees in the public sector (central 
government, local governments, social security funds, public companies, state agencies and 
other  public  institutions).  Measures  yielding  comparable  budgetary  savings  may  be 
considered after consultation with the Commission;  

State of progress 

Observed. 
The 2011 budget was submitted to Parliament on 18 November. 
The  yield  of  several  measures  (including  incentives  to  regularise  land-use 
violations, green tax, the expansion of the base for the real estate tax, a special 
tax on unauthorised establishments, and taxes on luxury goods) is expected to 
be lower than initially estimated. 
The broadening of the VAT base by moving 30 percent of goods and services 
from the reduced rate to the main rate will not be implemented, but replaced by 
an increase in reduced VAT rates to almost all goods in that category.  
Total  measures  in  the  budget  for  2011,  as  well  as  other  measures  announced 
prior  to  the  budget  are  expected  to  yield  (5¾  percent  of  GDP),  more  than 
required by the Council Decision. 

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(b)  a  reinforcement  of  the  role  and  resources  of  the  general  accounting  office  and  the 
establishment  of  safeguards against  possible  political  interferences  in data  projection  and 
accounting; 

(c) a draft reform of wage legislation in the public sector, including notably the creation of 
a  Single  Payment  Authority  for  the  payment  of  wages,  the  introduction  of  unified 
principles and timetable to establish a streamlined unified public sector wage grid to apply 
to the State sector, local authorities and other agencies; 

(d) a legislation improving the efficiency of the tax administration and controls; 

(e)  the  launch  of  independent  reviews  of  central  administration  and  of  existing  social 
programmes; 

Observed. 
The  strengthening  of  GAO  is  part  of  the  new  organic  budget  law  (Law 
3871/2010). The Ministry of Finance has commissioned a comprehensive study 
for the reorganisation of the General Accounting Office to a private consulting 
company, the results of which will be available by early 2011. 

The pre budget (of October) for 2011 was built on optimistic macroeconomic 
projections  and  revenue  projections  that  were  not  properly  underpinned  by 
concrete  measures.  The  draft  budget  for  2011  is  based  on  plausible 
assumptions  similar  to  those  prepared  by  Commission  and  takes  into  account 
the latest fiscal developments.  

Partially observed. 
The single payment authority has been established but is not yet fully active. 

Observed. 
Laws 3842/2010 and 3888/2010 have been adopted. 
Task forces have been established to prepare measures and reforms to fight tax 
evasion. The government will implement these actions in January 2011, and set 
quantitative  performance  indicators  to  hold  the  revenue  administration 
accountable,  e.g.  in  the  area  of  tax  arrears  collection,  controls  over  largest 
taxpayers, and tax return filing and payments. In parallel, the government will 
strengthen the legislative framework to fight tax evasion: the administrative tax 
dispute  and  judicial  appeal  processes  will  be  simplified,  impediments  to  the 
exercise  of  core  tax  administration  functions  (indirect  audit  methods,  tax 
returns  processing)  removed,  and  the  status  of  personnel  in  charge  of  tax 
administration reformed to punish breach of duty.  
Partially observed.  
Technical  meetings  with  the  EC,  IMF  and  ECB,  and  OECD  (which  will 
conduct the reviews) have started. Contract not yet signed.  

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(f) the publication of monthly statistics (on a cash basis) on revenue, expenditure, financing 
and spending arrears for the available general government and its sub entities; 

(g)  an  action  plan  to  improve  collection  and  processing  of  general  government  data, 
notably  by  enhancing  the  control  mechanisms  of  statistical  authorities  and  the  General 
accounting office and ensuring effective personal responsibility for cases of misreporting, 
in order to ensure the prompt supply of high quality general government data required by 
regulations  (EC)  2223/96,  264/2000,  1221/2002,  501/2004,  1222/2004,  1161/2005, 
223/2009 and 479/2009; 

(h) a regular publication of information on the financial situation in public enterprises and 
other  public  entities  not  classified  in  the  general  government  (including  detailed  income 
statements, balance sheets and data on employment and the wage bill).” 

(i) the establishment of a comprehensive central registry for public enterprises; 

(j) an action plan with a timetable for concrete actions leading to the creation of a central 
procurement authority; 
(k)  an  act  establishing  an  upper  limit  of  EUR  50  million  for  the  annual  public  service 
obligation  contribution  from  the  general  government  to  railway  operators  for  the  period 
2011-2013  and  establishing  the  principle  that  the  State  provides  no  additional  explicit  or 
implicit support to railway operators; 
(l)  a  business  plan  for  the  Greek  railways.  The  business  plan  specifies  how  operational 
activities  will  be  made  profitable,  including  covering  depreciation  costs,  as  from  2011, 
including  by  closing  loss-making  lines,  by  increasing  tariffs  and  by  reducing  wages  and 
staffing;  provides  a  detailed  sensitivity  analysis  on  the  implication  for  wage  costs  of 
various  scenarios  for  the  outcome  of  collective  agreement  and  provides  information  on 
several  options  concerning  staff;  and  provides  for  the  restructuring  of  the  holding 
company, including the sale of land and other assets; 

Partially observed. 
Commitment registers have been introduced in all general government units in 
November  and  the  government  published  data  on  arrears  by  general 
government entities. At the same time, accounting beyond state level remains 
below  par  and  prevents  and  adequate  monitoring  of  intra-year  budgetary 
developments.  While  the  situation  has  somewhat  improved  in  the  social 
security  sector  and  reclassified  state-owned  enterprises,  data  on  local 
governments remain very limited. 
Observed. 
Ongoing  cooperation  with  Eurostat  in  the  framework  of  the  Joint  Statistical 
Action Plan. An appropriate trail of provision of source data on public finances 
to ELSTAT has been established. The quarterly public finance data are being 
compiled for 2010 on the basis of direct data sources.  
Fiscal  statistics  for  2006-09  have  been  revised  by  ELSTAT  and  validated  by 
Eurostat. 

Observed. The first release of data on the eleven largest public enterprises took 
place in October 2010 

Observed. The registry is expected to be fully operational during the first 
quarter of 2011. 
Observed. 
An action plan has been agreed with the Commission services. 

Partially observed.  
New railway law adopted on 26 October 2010.  
The  business  plan  was  delivered  to  EC/IMF/ECB  for  consultation  on  30 
September  2010.  Clarifications  and  negotiations  are  in  process.  The  required 
state aid notification has not yet taken place. 

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(m) a law to reform the wage bargaining system in the private sector, which should provide 
for a reduction in pay rates for overtime work, enhanced flexibility in the management of 
working  time  and  allow  local  territorial  pacts  to  set  wage  growth  below  sectoral 
agreements; 
(n)  a  reform  of  employment  protection  legislation  to  extend  the  probationary  period  for 
new  jobs  to  one  year,  and  to  facilitate  greater  use  of  temporary  contracts  and  part-time 
work; 
(o) an amendment of the regulation of the arbitration system to allow each of the parties to 
resort to arbitration if they disagree with the proposal of the mediator; 
(p) a reform of the arbitration procedure to ensure that it operates according to transparent 
objective  criteria,  with  an  independent  committee  of  arbitrators  with  decision  making 
capacity free from government influence. 

Delayed. 
Overtime work’s pay rates have been reduced under Law 3863/2010. 
Other draft laws transmitted for consultation to the European Commission on 
14.11.2010.  

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