Recommendation for a COUNCIL DECISION amending for the third time Council Decision 2010/320/EU of 10 May 2010 addressed to Greece with a view to reinforcing and deepening the fiscal surveillance and giving notice to Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive deficit
Date: 2011-02-24
Institutions: European Commission
Subjects: Greece, anti-crisis plan, budget deficit, budget policy, budgetary control, economic recession

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EUROPEAN COMMISSION 

Brussels, 24.2.2011 
COM(2011) 86 final 

Recommendation for a 

COUNCIL DECISION 

amending for the third time Council Decision 2010/320/EU of 10 May 2010 addressed to 
Greece with a view to reinforcing and deepening the 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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Recommendation for a 

COUNCIL DECISION 

amending for the third time Council Decision 2010/320/EU of 10 May 2010 addressed to 
Greece with a view to reinforcing and deepening the fiscal surveillance and giving notice to 
Greece to take measures for the deficit reduction judged necessary to remedy the situation of 
excessive deficit 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  functioning  of  the  European  Union  (TFEU),  and  in 
particular Article 126 (9) and Article 136 thereof,  

Having regard to the recommendation from the Commission, 

Whereas: 

(1)  Article  136  (1)  (a)  TFEU  foresees  the  possibility  of  adopting  measures  specific  to  the 
Member States whose currency is the euro with a view to strengthening the coordination and 
surveillance of their budgetary discipline. 

(2) Article 126 establishes that Member States shall avoid excessive government deficits and 
sets out the excessive deficit procedure to that effect. The Stability and Growth Pact, which in 
its  corrective  arm  implements  the  excessive  deficit  procedure,  provides  the  framework 
supporting  government  policies  for  a  prompt  return  to  sound  budgetary  positions  taking 
account of the economic situation. 

(3) On 27 April 2009, the Council decided, in accordance with Article 104 (6) of the Treaty 
establishing the European Community that an excessive deficit existed in Greece. 

(4)  On  10  May  2010,  the  Council  adopted  a  Decision  addressed  to  Greece  under  Article 
126 (9) and Article 136 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  at  the  latest  by  the  deadline  of  2014  (hereinafter  "the 
Decision").1 The Council established the following path for the deficit correction: government 
deficits  not  exceeding  EUR  18  508  million  in  2010,  EUR  17  065  million  in  2011,  EUR  14 
916 million in 2012, EUR 11 399 million in 2013 and EUR 6 385 million in 2014. 

(5) According to the forecast available at the time the Council adopted the Decision, real GDP 
was  expected  to  contract  by  4%  in  2010  and  2½  %  in  2011,  and  recover  afterwards,  with 
growth rates of 1.1% in 2012, and 2.1% in 2013 and 2014. GDP deflator was expected to be 

1 

Council Decision 2010/320/EU (OJ L 145, 11.6.2010, p. 6). 

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1.2%,  -0.5%,  1.0%,  0.7%  and  1.0%  from  2010  to  2104,  respectively.  Given  economic 
developments,  real  GDP  is  now  expected  to  contract  by  4¼%  in  2010  and  3%  in  2011  and 
recover  afterwards  with  growth  rates  of  1.1%  in  2012,  and  2.1%  in  2013  and  2014.  GDP 
deflators  are  now  expected  to  be  3.0%,  1.6%,  0.4%,  0.8%  and  1.2%  from  2010  to  2014, 
respectively. 

(8)  On  12  February  2011,  Greece  submitted  to  the  Council  and  the  Commission  a  report 
outlining the policy measures taken to comply with the Decision. The Commission assessed 
the report and concluded that Greece is satisfactorily complying with the Decision.2 However, 
it must be avoided that the deficit target for 2011 is missed as happened for 2010. 

(9)  In  light  of  the  above  considerations,  it  appears  appropriate  to  revise  the  Decision  in  a 
number of respects, while keeping unchanged the deadline for the correction of the excessive 
deficit  and  the  adjustment  path  for  the  government  deficit  and  the  increase  of  government 
debt in nominal terms.  

HAS ADOPTED THIS DECISION:  

Article 1 

Decision 2010/320/EU is amended as follows: 

1. 

in Article 2 (4), point (d) is replaced by: 

identifies  permanent 

a  medium-term  budgetary  strategy  plan  which 

"(d) 
fiscal 
consolidation  measures  of  at  least  8  percent  of  GDP,  plus  a  contingency  reserve,  that  will 
ensure the achievement of deficit targets up to 2014, and that the debt-to-GDP ratio is put on a 
sustainable  downward  path..  The  strategy  plan  will  be  published  for  public  consultation 
before  end  March.  The  medium-term  strategy  plan  includes,  in  particular:  prudent 
macroeconomic forecasts; baseline revenue and expenditure projections for the state and for 
the  other  government  entities;  a  description  of  permanent  fiscal  measures,  their  timing  and 
their  quantification;  annual  spending  ceilings  for  each  ministry  and  fiscal  targets  for  other 
government entities through 2014; post-measures fiscal projections for general government in 
line  with  the  deficit  and  debt  targets;  longer-term  debt  projections  based  on  prudent 
macroeconomic projections, stable primary  surpluses from 2014 on,  and privatisation  plans. 
The  medium-term  strategy  plan  will  be  articulated  with  the  ongoing  healthcare  and  pension 
reforms  and  with  specific  sectoral  plans.  The  sectoral  plans  (draft  plans  to  be  available  by 
end-March),  will  cover  in  particular:  tax  policy  reforms;  state-owned  enterprises;  extra 
budgetary funds (legal entities of the public sector and earmarked accounts); public wage bill; 
public administration; social spending; public investment and military spending. Each sectoral 
plan will be managed by interministerial taskforces." 

2. 

in Article 2 (4), point (e) is replaced by: 

an  anti-evasion  plan  which  includes  quantitative  performance  indicators  to  hold 
"(e) 
revenue  administration  accountable;  legislation  to  streamline  the  administrative  tax  dispute 
and  judicial  appeal  processes  and  the  required  acts  and  procedures  to  better  address 

2 

Commission Communication COM(2011) final …. of [XX] March 2011. 

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misconduct, corruption and poor performance of tax officials, including prosecution in cases 
of breach of duty; publication of monthly reports of the five anti-evasion taskforces, including 
a set of progress indicators."  

3. 

in Article 2 (4), point (f) is replaced by: 

"(f) 
a  detailed  action  plan  with  a  timeline  to  complete  and  implement  the  simplified 
remuneration system; preparation of a medium-term human resource plan for the period up to 
2013  in  line  with  the  rule  of  1  recruitment  for  5  exits,  also  specifying  plans  to  reallocate 
qualified staff to priority areas; publication of monthly data on staff movements (entries, exits, 
transfers among entities) of the several government departments." 

4. 

in Article 2 (4), point (g) is replaced by: 

"(g) 
implementation of the comprehensive reform of the health care system started in 2010 
with the objective to keep public health expenditure at or below 6 percent of GDP; measures 
yielding  savings  on  pharmaceuticals  of  at  least  EUR  2  billion  relative  to  the  2010  level,  of 
which at least EUR 1 billion in 2011; improvement in the accounting and billing systems of 
hospitals,  through:  finalising  the  introduction  of  double-entry  accrual  accounting  systems  in 
all  hospitals;  the  use  of  the  uniform  coding  system  and  a  common  registry  for  medical 
supplies; the calculation of stocks and flows of medical supplies in all the hospitals using the 
uniform coding system for medical supplies; the collection of co-payments from patients in all 
National Health System facilities; and the timely invoicing of treatment costs (no later than 2 
months) to Greek social security funds, other Member States and private health insurers; and 
ensure that at least 50 % of the volume of medicines used by public hospitals by the end of 
2011 is composed of generics and off-patent medicines by making it compulsory for all public 
hospitals to procure pharmaceutical products by active substance." 

5. 

in Article 2 (4), point (k) is replaced by: 

"(k) 
adoption of a law to establish the Single Public Procurement Authority in line with the 
Action  Plan;  development  of  an  e-procurement  IT  platform  and  setting  up  of  intermediate 
milestones  in  line  with  the  Action  Plan,  including:  testing  a  pilot  version,  availability  of  all 
functionalities for all contracts and phasing-in of the mandatory use of e-procurement system 
for supplies, services and works contracts".  

6. 

in Article 2 (4), the following point is added: 

an  act  specifying  the  qualification  and  responsibilities  of  accounting  officers  to  be 
"(l) 
appointed in all line ministries and major government entities with the responsibility to ensure 
sound  financial  controls;  appointment  of  financial  accounting  officers;  acceleration  of  the 
process  of  establishing  commitment  registries  and  operational  registries  covering  the  whole 
general government (except the smallest entities)." 

7. 

in Article 2 (5), the following point is added: 

publication of an inventory of state-owned assets, including stakes in listed and non-
"(i) 
listed enterprises and commercially viable real estate and land and an estimation of the values 
of  these  assets;  establishment  of  a  General  Secretariat  of  Real  Estate  in  order  to  improve 
coordination and accelerate the privatisation and asset management program; on the basis of 
this inventory, privatisation plans are revised and accelerated." 

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8. 

in Article 2 (6), the following point is added: 

"(f)  Building  on  the  inventory  of  commercial  state-owned  real-estate  assets  (to  be 
published by June 2011), elaboration of a medium-term plan to divest state assets, revision of 
the privatisation receipts planned for 2011-12 and extension of the plan through 2015." 

9. 

Article 2 (8) is added: 

"Greece shall adopt the following measures by the end of March 2012: 

(a) 
a  reform  of  the  secondary/supplementary  pension  schemes,  by  merging  funds  and 
starting  the  calculation  of  benefits  on  the  basis  of  the  new  notional  defined-contribution 
system;  freezing  of  nominal  supplementary  pensions  and  reduction  of  the  replacement  rates 
for accrued rights in funds with deficits, based on the actuarial study prepared by the National 
Actuarial  Authority.  In  case  the  actuarial  study  is  not  ready,  replacement  rates  are  reduced, 
starting from 1 January 2012, to avoid deficits." 

This Decision shall take effect on the day of its notification.  

Article 2 

Article 3 

This Decision is addressed to the Hellenic Republic. 

Done at Brussels, […] 

For the Council 
The President 
[…] 

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