COMMISSION STAFF WORKING DOCUMENT Enhanced Surveillance Report - Greece, November 2020 Accompanying the document COMMUNICATION FROM THE COMMISSION Enhanced Surveillance update - Greece, November 2020
Date: 2020-11-18
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Euro Group (euro area), Greece, coronavirus disease, economic recovery, epidemic, gross domestic product, macroeconomics, multilateral surveillance, public debt, stability programme, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2020  SWD(2020) 751 final  COMMISSION STAFF WORKING DOCUMENT Enhanced Surveillance Report - Greece, November 2020 Accompanying the document COMMUNICATION FROM THE COMMISSION Enhanced Surveillance update - Greece, November 2020 {COM(2020) 751 final}  
 
 
ABBREVIATIONS 

AIA: Athens International Airport 
ANFA: Agreement on Net Financial Assets 
ASEP: Supreme Council for Civil Personnel Selection 
CRR: Capital Requirement Regulation 
DEPA: Public Gas Corporation  
DRU: Dispute Resolution Unit 
ECB: European Central Bank 
EFKA: Single Social Security Fund  
EFSF: European Financial Stability Facility 
EIB: European Investment Bank 
EKAPY: National Central Authority of Health Procurements  
ENFIA: Unified Property Tax  
EOPYY: National Organisation for the Provision of Healthcare Services 
ERGANI: Greek Database for Unemployment Registration  
ERGOSE: Subsidiary company of OSE to implement railways infrastructure projects 
ESI: Economic Sentiment Indicator 
ESM: European Stability Mechanism 
ESOEL: National Coordinating Body for Audit and Accountability  
ETAD: Public Properties Company  
ETEAEP: Supplementary Pension Fund  
EYATH: Thessaloniki Water Supply and Sewerage Company  
EYDAP: Athens Water Supply and Sewerage Company  
FEK: Government gazette  
GDP: Gross Domestic Product 
GPS: Global Positioning System 
GRECO: Group of States against Corruption 
HCAP: Hellenic Corporation of Assets and Participations 
HELEXPO:  National  institution  for  the  organisation  of  exhibitions,  congresses  and 
cultural events  
HFSF: Hellenic Financial Stability Fund  
HRADF/TAIPED: Hellenic Republic Asset Development Fund  
HRMS: Human resources management system 
IAPR: Independent Authority for Public Revenue 
ICT: Information and Communication Technologies 
IEK: Public professional schools  
IKE: Greek private company  
IMF: International Monetary Fund 
JASPERS: Assistance to Support Projects in European Regions  
KEK: Vocational training centres  
KEPA: Disability assessment centres  
KOMYs: Newly and swiftly deployed medical mobile units  
KPI: Key performance indicator 
KTEL: Joint-venture of Regional Transport 
LCR: liquidity coverage ratio 
LEPETE: Supplementary Pension Fund of the National Bank of Greece 
MFIs: Monetary financial institutions 
NFCs: Non financial corporations 

i 

NOME:  Nouvelle  organisation  du  marché  de  l’electricité  (New  organisation  of  the 
electricity market) 
NPEs: Non-performing exposures 
OAED: Public employment service  
OASTH: Urban Transport of Thessaloniki 
OGA: Agricultural Insurance Organisation (former farmers’ fund) 
OMED: Mediation and arbitration board  
OSDDY: Integrated Management System for Judicial Cases  
OSE: Organisation of railways of Greece 
PMI: Purchasing Managers Index 
SEPE: Labour inspections directorate  
SMP: Securities Markets Programme 
SURE: Support to Mitigate Unemployment Risks in an Emergency 
SYNERGASIA: Temporary short-time work scheme  
TEPIX II: Envelope for co-financing loans to small and medium-sized enterprises  
TLTRO III: Eurosystem targeted longer-term refinancing operations  
TOMYs: primary health care units 
VAT: Value added tax 

ii 

 
 
ACKNOWLEDGEMENTS 

This  report  is  prepared  as  an  enclosed  document  to  the  Commission's  assessment 
pursuant Article 3(5) of  Regulation  (EU) 472/2013  published as Communication  from 
the Commission – Enhanced Surveillance – Greece, November 2020. It was prepared in 
the  Directorate  General  Economic  and  Financial  Affairs,  under  the  direction  of 
Maarten Verwey, Director General, Declan Costello, Deputy Director General, and the 
coordination of Julia Lendvai, Head of Unit and Milan Lisicky, Deputy Head of Unit. 

Contributors: 

Chris  Allen,  Giuseppe  Carone,  Christos  Daoulas,  Fotini  Dionyssopoulou,  Matteo 
Duiella,  Dolores  Gloria  Duran  Bono,  Sotirios  Giannoulis,  Christos  Gofas,  Andras 
Hudecz,  Alexander  Ioannidis,  Eloïse  Lecouturier,  Vasileios  Maroulis,  Benedetta 
Martinelli,  Vasilis  Nikitas,  Zoltan  Petrov,  Eleni  Polemidiotou,  Marie-Luise  Rud, 
Alexandros Tavoutsoglou, Andreas Trokkos, Vasiliki Vasilopoulou, Irene Vlachaki, Veli 
Laine, Rainer Wichern and Alkistis Zavakou.  

The  European  Central  Bank  staff  participated  in  the  drafting  of  this  report  in 
accordance with the European Central Bank’s competences and thus provided expertise 
on  financial  sector  policies  and  macro-critical  issues,  such  as  headline  fiscal  targets 
and  sustainability  and  financing  needs.  Staff  of  the  European  Stability  Mechanism 
contributed  to  the  preparation  of  this  report  in  the  context  of  the  European  Stability 
Mechanism's  Early  Warning  System  and  in  accordance  with  the  Memorandum  of 
Understanding  of  27 April  2018  on  working  relations  between  the  European 
Commission and the European Stability Mechanism. International Monetary Fund staff 
participated in the context of its Post-Programme Monitoring framework. 

Comments on the report would be gratefully received and should be sent by post or e-
mail to: 

Julia Lendvai 

European Commission 

Unit ECFIN-F-2 

CHAR 14/103 

B-1049 Brussels 

e-mail: ECFIN-GREECE-REQUESTS@ec.europa.eu 

iii 

 
 
CONTENTS 

Commission Staff Working Document - 

1. 

Introduction 

2.  Macroeconomic developments 

3. 

Fiscal and fiscal-structural policies 

TAX POLICY 

3.1. FISCAL DEVELOPMENTS AND OULTOOK 
3.2. 
3.3.  REVENUE ADMINISTRATION 
3.4. PUBLIC FINANCE MANAGEMENT 
3.5.  PUBLIC INVESTMENT 
4.1. 
SOVEREIGN FINANCING 
4.2.  DEBT SUSTAINABILITY ANALYSIS 

5. 

Social welfare 

5.1.  PENSIONS 
5.2.  HEALTHCARE 
5.3. 

SOCIAL SAFETY NETS 

6. 

Financial sector 

FINANCIAL SECTOR DEVELOPMENTS 
FINANCIAL SECTOR POLICIES 

6.1. 
6.2. 
6.3.  HELLENIC FINANCIAL STABILITY FUND (HFSF) 

7. 

Labour and product markets 

LABOUR MARKET 

7.1. 
7.2.  PRODUCT MARKETS AND COMPETITIVENESS 

8.  Hellenic Corporation of Assets and Participations (HCAP) and privatisation 

8.1.  HELLENIC CORPORATION OF ASSETS AND PARTICIPATIONS 
8.2. 
IMPLEMENTATION OF THE ASSET DEVELOPMENT PLAN 

9. 

Public administration and justice 

9.1 PUBLIC ADMINISTRATION 
9.2.  DIGITAL GOVERNANCE 
9.3. 
9.4. 

JUSTICE 
FIGHT AGAINST CORRUPTION 

ANNEX 

3 

3 

5 

7 

7 
10 
10 
12 
16 
18 
18 

25 

25 
25 
27 

29 

29 
34 
37 

38 

38 
39 

46 

46 
48 

51 

51 
53 
54 
57 

59 

iv 

 
 
 
 
 
LIST OF TABLES 

Summary of main macroeconomic variables (%) 
Fiscal projections of the Commission 2020 Autumn Forecast and 2021 Draft Budgetary Plan 

2.1. 
3.1. 
3.2.  Key Performance Indicators of the Independent Authority for Public Revenue, second 

quarter 2020 
Stock of arrears 

3.3. 
4.1.  Assumptions in the baseline scenario 
4.2.  Assumptions under the risk scenarios 
4.3.  Decomposition of change of results on gross financing needs due to the revised 

assumptions 

4.4.  Decomposition of change of results on debt-to-GDP ratio due to the revised assumptions 
6.1.  Main financial stability indicators 
9.1.  Evolution of public sector staff (2009-2020) 

LIST OF GRAPHS 

4.1. 
Long term real GDP growth (%) 
4.2.  Debt sustainability indicators (% of GDP) 
6.1.  Bank deposits (left) and total borrowing from the Eurosystem (right) 
6.2.  Non-performing loans as a% of total customer loans (left) and changes in their stock in the 

second quarter of 2020 (right: million EUR) 

6.3.  Bank credit to non-financial corporations and households, annual % change 
6.4.  Bank interest rates of new loans to euro area residents, annual percentages, weighted 

averages 

LIST OF BOXES 

3.1.  Revision of the public procurement framework 

6 
8 

10 
12 
21 
22 

23 
23 
30 
52 

19 
24 
29 

31 
33 

34 

15 

v 

 
 
 
 
 
 
1. 

INTRODUCTION 

Enhanced  surveillance  provides  a  comprehensive  framework  for  monitoring 
economic developments and the pursuit of policies needed to ensure a sustainable 
economic  recovery.  To  this  end,  this  report  includes  an  assessment  of  economic 
conditions  in  Greece  (chapter  2);  an  assessment  of  implementation  of  reform 
commitments  given  by  Greece  to  the  European  partners  (chapters  3  and  5-9)  and  an 
update on sovereign financing conditions (chapter 4). This report is issued alongside the 
Commission assessment of Greece’s 2021 Draft Budgetary Plan, prepared in the context 
of the European Semester of economic and social policy coordination. 

The  Eurogroup  on  22 June  2018  agreed  that  the  package  of  debt  relief  measures 
for  Greece  should  include  incentives  to  ensure  a  strong  and  continuous 
implementation of the reform measures agreed in the programme. To this end, the 
implementation  of  some  of  the  agreed  debt  measures  –  the  abolition  of  the  step-up 
interest  rate margin  related to  the  debt  buy-back  instalment  of the European Financial 
Stability  Facility  (EFSF)  programme  as  of  2018  and  the  restoration  of  the  transfer  of 
equivalent amounts to the income earned by euro-area national central banks on Greek 
government bonds held under the Agreement on Net Financial Assets (ANFA) and the 
Securities  Market  Programme  (SMP)  –  will  be  made  available  to  Greece  subject  to 
compliance  with  its  commitments  on  reform  continuity  and  completion,  based  on 
positive  reports  under  enhanced  surveillance.  The  transfer  of  these  income  equivalent 
amounts would be made available to Greece in semi-annual tranches of €644 million up 
to  mid-2022.  The  waiver  of  the  step-up  interest  rate  margin,  for  part  of  the  loans 
extended by the European Financial Stability Facility, would reduce interest payments 
by about €226 million every year. It would be waived on a semi-annual basis until 2022 
and permanently after 2022. The third tranche of policy-contingent debt measures was 
released following the Eurogroup on 11 June 2020, inter alia based on the assessment of 
the  implementation  of  Greece’s  commitments  for  end-2019  included  in  the  enhanced 
surveillance report adopted by the Commission on 20 May 2020 (5) and considering the 
extraordinary  circumstances  posed  by  the  coronavirus  outbreak.  The  current  report 
assesses  the  implementation  of  Greece’s  commitments  to  the  Eurogroup  including 
specific reform completion commitments up to mid-2020, the continuous commitments 
and  its  general  reform  continuity  commitment.  It  thereby  provides  a  basis  for  the 

(1)  Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the 
strengthening of economic and budgetary surveillance of Member States in the euro area experiencing 
or  threatened  with  serious  difficulties  with  respect  to  their  financial  stability,  OJ  L  140,  27.5.2013, 
pp. 1. 

(2)  Commission  Implementing  Decision  (EU)  2020/1142  of  29 July  2020  on  the  prolongation  of 

enhanced surveillance for Greece, OJ L 248, 31.7.2020, pp. 20-23. 

(3)  https://www.consilium.europa.eu/media/35749/z-councils-council-configurations-ecofin-eurogroup-
2018-180621-specific-commitments-to-ensure-the-continuity-and-completion-of-reforms-adopted-
under-the-esm-programme_2.pdf 

(4)  European  Central  Bank  staff  participated  in  the  review  mission  in  accordance  with  the  European 
Central  Bank’s  competences  and  thus  provided  expertise  on  financial  sector  policies  and  macro-
critical  issues,  such  as  headline  fiscal  targets  and  sustainability  and  financing  needs.  The  review 
mission  was  preceded  by  a  technical  mission,  also  held  remotely,  from  30 September  to  8 October 
2020. 

(5)  https://ec.europa.eu/info/publications/enhanced-surveillance-report-greece-may2020_en 

3 

                                                 
Commission Staff Working Document -  

Chapter 1 - Introduction 

Eurogroup to discuss the release of the next tranche of policy-contingent debt measures, 
amounting to €767 million.  

4 

2.  MACROECONOMIC DEVELOPMENTS 

The  coronavirus  pandemic  is  taking  a  strong  toll  on  the  Greek  economy.  After  a 
comparatively mild  impact  in  the first  quarter of 2020, the Greek economy  contracted 
by -14.2% in the second quarter as economic activity was restricted to stop the spread of 
the pandemic. The services sector has been hit particularly hard, due to the importance 
of international tourism. With travel restrictions for EU countries being gradually lifted 
from mid-June and travel restrictions for most non-EU countries still in place, tourism 
receipts in January-August 2020 were 80% below their level in the same period in 2019. 
Domestic demand suffered due to lower consumption possibilities, lower incomes, and 
higher uncertainty, with private consumption declining by 11.3% in the second quarter. 
Due to the global dimension of the crisis, exports have been strongly negatively affected 
as  well,  with  goods  exports  excluding  oil  declining  by  4%  (13%  including  oil)  in 
January-August  2020  compared  to  the  same  period  in  2019  and  service  exports 
declining by 44% over the same period according to balance of payments data, largely 
on the back of the above-mentioned developments in the tourism sector.  

The recovery is likely to be somewhat slower than previously expected, on account 
of the resurgence of coronavirus cases and the economic effects of the containment 
measures. Assuming that the containment measures continue with the stringency levels 
of September 2020 well into 2021 (i.e. without significant local or national lockdowns), 
a decline of real GDP of 9% in 2020 followed by a partial recovery of 5% in 2021 and 
3.5%  in  2022  is  expected (6).  Lasting  travel  restrictions  and  shifts  in  consumer 
behaviour to limit infection risks are expected to weigh on the pace of recovery in the 
services  sector  and  in  particular  in  tourism.  Private  investment  is  expected  to  recover 
only  gradually,  on  account  of  high  uncertainty  and  diminished  profits.  Regarding  the 
external sector, the high importance of tourism remains a limiting factor, while transport 
services  and  exports  of  goods  are  expected  to  recover  faster.  Government  support 
schemes that have been extended to, or announced also for 2021 are expected to support 
the  recovery  and  cushion  to  some  extent  the  negative  impact  of  the  extended 
containment measures in 2021. The nationwide lockdown for three weeks announced on 
5 November could weaken the short-term outlook more than assumed in the projections 
presented here which were finalised before the announcement of the lockdown.  

Employment  is  negatively  affected  by  the  crisis,  but  the  authorities  have 
implemented measures to cushion the decline and to facilitate the recovery. Data on 
hiring and firing from the ERGANI system shows that between March and June 2020 
the  labour  market  remained  ‘frozen’,  with  very  limited  hiring  and  firing  taking  place. 
While these months are traditionally characterised by an increased hiring activity linked 
to  the  summer  season  in  the  tourism  industry,  this  seasonal  hiring  largely  vanished  in 
2020. The unemployment rate reached 17.7% in May and decreased to 16.8% in August 
2020  mostly  due  to  workers  leaving  the  workforce.  The  relatively  muted  increase  of 
unemployment  can  also  be  attributed  to  some  extent  the  success  of  employment 

(6)  The forecast was prepared taking into account information available up to the cut-off date 22 October 
2020.  More  details  regarding  the  Commission  2020  Autumn  Forecast  can  be  found  here: 
https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-
forecasts/autumn-2020-economic-forecast_en . 

5 

                                                 
Commission Staff Working Document -  

Chapter 2 – Macroeconomic developments 

protection  schemes.  With  the  gradual  return  of  a  more  normalised  hiring  and  firing 
pattern and as the inactive population slowly returns to the workforce, unemployment is 
expected  to  increase  somewhat  and  reach  close  to  18%  for  the  year  overall.  With  a 
limited  recovery  of  the  tourism  sector  and  travel  restrictions  still  in  place  throughout 
2021, the unemployment rate is forecast to recover more slowly than overall economic 
activity.  

Consumer  price  inflation  is  expected  to  contract  sharply  in  2020  and  recover 
partially in 2021 and 2022. Driven by low energy prices, lower demand in the service 
sector,  VAT  reductions  and  the  general  contraction  of  economic  activity,  consumer 
prices  are  forecast  to  fall  sharply  (by  -1.3%)  in  2020.  Prices  are  expected  to  increase 
moderately  in  2021  and  2022  along  with  the  economic  rebound,  as  energy  prices  and 
tourism activity recover gradually. 

Uncertainty and risks surrounding the outlook are very high, due to the uncertain 
developments  of  the  global  health  crisis.  In  view  of  the  recent  the  developments 
regarding  the  pandemic  and  new  nationwide  lockdown  announced  on  5  November, 
economic  activity  could  be  significantly  impacted  in  the  last  quarter  of  2020  and  in 
2021.  Due  to  the  high  importance  of  international  tourism  for  the  Greek  economy, 
Greece is also dependent on the developments of the pandemic in other countries, and 
their  restrictions  regarding  international  travel.  Downside  risks,  apart  from  the  risks 
related to the coronavirus pandemic, are related to the geopolitical tensions in the region 
and  migration  pressures.  For  2021  and  beyond,  upside  risks  are  stemming  from  the 
support measures adopted at EU level including Next Generation EU, which, if swiftly 
adopted and implemented, could significantly support demand in 2021 and beyond also 
strengthening economic fundamentals and resilience going forward. More specifically, 
the  Commission  forecast  does  not  incorporate  the  impact  of  the  Recovery  and 
Resilience  Plan  as  it  is  still  at  an  early  stage  of  development.  Once  fully  specified, 
adopted and implemented, the reforms and investments implemented under the Plan are 
expected to have a positive impact on the growth outlook. 

Table 2.1:  Summary of main macroeconomic variables (%) 

Source: European Commission 

6 

2019202020212022Real GDP1.9-9.05.03.5Employment growth 1.2-3.61.71.6Unemployment rate 17.318.017.516.6GDP deflator0.2-1.40.40.9Harmonized index of consumer prices0.5-1.30.91.3 
 
  
 
3. 

FISCAL AND FISCAL-STRUCTURAL POLICIES 

3.1. FISCAL DEVELOPMENTS AND OULTOOK 

Greece’s  fiscal  policy  is  expected  to  continue  to  support  the  recovery  throughout 
2021. While most of the measures taken in 2020 have targeted the direct impact of the 
pandemic  (health  care  expenses,  support  for  the  lock-down  period,  tax  deferrals  etc.), 
the authorities have also announced temporary measures for 2021 which aim to support 
the recovery by stimulating demand and employment. Specifically, the authorities have 
also announced additional temporary measures reducing social security contributions by 
three percentage points for private sector wage earners and waiving the social solidarity 
tax  for  private-sector  wage  earners  and  self-employed.  These  measures  aim  to  reduce 
the high tax wedge, and as such, they point in the right direction. In addition to the tax 
measures  and  in  order  to  support  employment,  the  authorities  have  introduced  a  new 
temporary  recruitment  subsidy  programme  that  aims  to  create  100 000  new  jobs  by 
subsidising  the  social  security  contributions  for  six  months  for  each  new  employment 
contact.  The  temporary  nature  of  the  measures  is  consistent  with  the  objective  of 
ensuring sustainability of public finances in the medium term.  

The General Escape Clause will also apply in 2021. In light of the need to support the 
economic  recovery  throughout  2021  and  of  the  high  prevailing  uncertainty  both 
regarding  the  development  of  the  pandemic  and  its  socio-economic  consequences,  the 
General  Escape  Clause,  which  was  activated  in  agreement  between  the  European 
Commission  and  the  European  Council  in  March  2020  and  does  not  suspend  the 
procedures of the Stability and Growth Pact, will remain active in 2021 as indicated in 
the  Annual  Sustainable Growth  Strategy  2021 (10).  The  General  Escape  Clause  allows 
for  a  temporary  departure  from  the  budgetary  requirements,  including  Greece’s  fiscal 
targets  monitored  under  enhanced  surveillance,  provided  that  this  does  not  endanger 
fiscal sustainability in the medium term. 

The  2021  Draft  Budgetary  Plan  expects  the  primary  deficit  monitored  under 
enhanced  surveillance  in  2021  to  reach  1.1%  of  GDP.  The  Draft  Budgetary  Plan’s 

(7)  The forecast was prepared taking into account information available up to the cut-off date 22 October 

2020. 

(8)  On 14 July 2020, the Council of State issued a landmark ruling regarding legal claims for retroactive 
compensation for pension cuts introduced by previous pension reforms. The 2016 pension reform kept 
pensions  of  incumbent  pensioners  at  the  levels  effective  on  31  December  2014,  i.e.  factoring  in  the 
pension cuts implemented in 2012. However, the 2015 Council of State ruling decided that the 2012 
pension  cuts  were  unconstitutional  from  June  2015  onwards.  Thus,  the  present  ruling  decided  that 
pensioners needed to be compensated for the period starting from June 2015 (the publication date of 
2015  Council  of  State)  until  May  2016  when  the  new  pension  reform  put  in  place  a  new  pension 
formula  for  future  pensioners  and  introduced  a  new  notional  level  of  pensions  for  incumbent 
pensioners. 

(9)  See here: 

https://ec.europa.eu/eurostat/documents/1015035/2041357/Draft+note+on+statistical+implications+of
+some+policy+measures+in+the+context+of+the+COVID-19+measures+-+09+April+2020/efc6d52f-
39e0-fd92-c760-f27d90676ef0 

(10) Also, communicated in the letter of 19 September 2020 from the Commission to the EU Ministers of 

Finance.  

7 

                                                 
 
Commission Staff Working Document -  

Chapter 3 – Fiscal and fiscal-structural policies 

forecast  takes  into  account  the  new  temporary  measures  described  above  aiming  at 
supporting the recovery whose fiscal impact is estimated at 1.0% of GDP. Apart from 
the  already  announced  measures,  the  Draft  Budgetary  Plan  includes  also  a  special 
reserve of 0.3% of GDP, which could be used to finance the needs that may arise from 
the  evolution  of  the  pandemic  in  2021  such  as  the  further  strengthening  of  the  health 
care system and the additional support of the economy. In addition, the Draft Budgetary 
Plan  incorporates  the  cost  of  an  ambitious  defence-spending  programme,  which 
includes the acquisition of aircrafts, weapon systems and the recruitment of 15 000 new 
professional soldiers. This programme will be implemented over a 7-year period but a 
big part of the costs is projected to take place already in 2021. The authorities estimate 
that the additional fiscal impact of the new programme will reach 0.5% of GDP in 2021.  

Table 3.1:  Fiscal projections of the Commission 2020 Autumn Forecast and 2021 Draft Budgetary 

Plan (% of GDP) 

Source: European Commission 

The  authorities’  fiscal  projection  is  more  optimistic  than  the  Commission  2020 
autumn  forecast,  which  expects  a  primary  deficit  of  3.4%  of  GDP  in  2021.  Apart 
from  methodological  issues  explained  below,  the  differences  between  the  two 
projections  are  mainly  explained  by  the  authorities’  more  favourable  macroeconomic 
outlook, which takes into account the Recovery  and Resilience Facility. The inclusion 
of  the  Recovery  and  Resilience  Facility  in  the  authorities’  projections  generates  a 
substantial  impact  on  growth,  which  then  results  in  a  positive  impact  on  the  fiscal 
balance of  above  1%  of  GDP (11).  In  addition,  the  authorities  assume  that  the 
€200 million  deficit of the Renewable Energy Source account  in  2020 will turn into a 
surplus of equal size in 2021. The assumed improvement is not underpinned by concrete 
actions,  thus  the Commission 2020 autumn forecast  projects  that the same deficit will 
continue  in  2021,  deteriorating  the  balance  by  0.2%  of  GDP  compared  to  the 
authorities’ estimate. On the other hand, the Commission 2020 autumn forecast assumes 
a  more  gradual  implementation  of  the  new  defence  programme,  thus  improving  the 

(11) The Commission forecast does not incorporate the impact of the Recovery and Resilience Plans as the 
full implementation is conditional upon their positive assessment by the Commission and endorsement 
through  a  Council  implementing  decision,  as  well  as  the  achievement  of  milestones  and  targets. 
Furthermore, the Commission forecast does not account for any expenditure under the Recovery and 
Resilience Facility, as the Draft Budgetary Plan did not present such projects in sufficient detail. 

8 

20202021(1)2021 Draft Budgetary Plan-6.3-1.1(2)Commission 2020 Autumn Forecast-4.4-3.4(3)Difference (3=1-2)-1.92.3of which:Methodological differences-2.50.9Impact of Recovery and Resilience Facility 1.1Deficit of Renewable Energy Source account0.2Military deliveries-0.2Use of different historical GDP levels0.20.1Other0.40.2Primary balance monitored under the enhanced surveillance  
  
 
                                                 
Commission Staff Working Document -  

Chapter 3 – Fiscal and fiscal-structural policies 

fiscal  balance  by  0.2%  of  GDP  in  2021  with  a  corresponding  reduction  in  2022 
compared to the Draft Budgetary Plan. 

The statistical recording of the emergency measures is based on Eurostat’s ‘Draft 
note’.  This  note  clarified  the  application  of  the  accrual  recording  of  revenues  with 
respect  to  measures  that  constitute  only  a  temporary  shift  in  revenues  between  years. 
Accordingly,  the  Commission  2020  autumn  forecast  includes  as  2020  revenue  the  tax 
and  social  contribution  payments  deferred  and  expected  to  be  collected  in  the  coming 
years. As regards the repayable advance, the Commission forecast accounts only for the 
amount  that  is  expected  not  to  be  returned  to  have  a  budgetary  impact,  while  the 
remaining amount is treated as a loan. In addition, the measure that allows companies to 
pay  only  a  fraction  of  their  corporate  income  tax  advances  in  2020  is  assumed  to  be 
broadly balance-neutral in accrual terms as it introduces only a temporary time-shift in 
the tax receipts. By contrast, the Draft Budgetary Plan follows the ‘time-adjusted cash’ 
method  for  the  above-mentioned  measures.  The  different  statistical  recording  of  these 
measures in the Commission 2020 autumn forecast has a balance-improving impact of 
2.5%  of  GDP  in  2020  and  a  balance-deteriorating  impact  of  0.9%  of  GDP  in  2021 
compared to the Draft Budgetary Plan.  

The  Commission  2020  autumn  forecast  does  not  take  into  account  the  impact  of 
the  new  nationwide  lockdown  announced  on  5 November.  Following  the  growing 
number of cases, the government decided to introduce a general lockdown for at least 3 
weeks starting from 7 November. The lifting of the restrictions will be assessed by end-
November  on  the  basis  of  the  new  epidemiological  data.  The  government  has  already 
announced the prolongation of earlier measures in order to support both households and 
affected businesses. The impact  of these prolongations depends on the duration of the 
lockdown and will be assessed in the context of the next enhanced surveillance report. 

The inherent uncertainty in the current assessment and forecast is substantial. The 
magnitude  and  severity  of  the  economic  and  fiscal  downturn  is  subject  to  substantial 
uncertainty  in  view  of  the  pandemic.  A  further  escalation  of  the  health  crisis  could 
trigger the need for additional  fiscal  measures which should be both of a targeted and 
temporary  nature  to  contain  the  fallout  and  bolster  the  recovery  in  2021.  Other  risks 
relate  to  a  possible  activation  of  state  guarantees  that  have  been  issued  as  part  of  the 
emergency measures. Further risks refer to  the litigation cases against the Public Real 
Estate Company (ETAD), remaining public service obligation claimed by the Hellenic 
Post,  and  potential  additional  costs  related  to  health  care  expenditure  of  individuals 
without  health  insurance.  Regarding  court  rulings  on  pensions,  uncertainty  around  the 
full extent of the retroactive compensation to pensioners persists, as the 2020 Council of 
State ruling has not yet been published. So far, only cuts related to the ‘main’ pensions 
have  been  compensated  and  it  remains  open  whether  retroactive  compensation  should 
be  extended  to  seasonal  bonuses  and  supplementary  pensions.  On  the  positive  side, 
Greece is expected to benefit greatly from the Recovery and Resilience Facility, which 
aims to support convergence and a sustainable economic recovery by  providing large-
scale financial support to growth-enhancing reforms and investments. 

9 

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3.2.  TAX POLICY 

Progress  towards  completion  of  the  nationwide  reassessment  of  property  tax 
values  has  slowed  down.  This  was  a  mid-2020  specific  commitment,  whose 
finalisation  has  now  been  rescheduled  for  mid-2021.  Inevitable  delays  occurred 
earlier in the year due to the coronavirus lockdown and further delays have taken place 
owing to the quality assessment required by successful appeals to the Council of State. 
This  year’s  ENFIA  single  property  tax  assessments  has  therefore  been  based  on  the 
previous  property  tax  values.  Nevertheless,  the  valuation  process  including  an 
expansion of the number of value zones by some 30% is likely to be finished by March 
2021  in  time  for  the  ENFIA  tax  assessment  of  August  2021.  Technical  support  is 
provided by the European Commission through a new project to revisit key features of 
the immovable property valuation system, including a review of commercial properties 
valuation  methodology,  as  well  as  to  support  the  steps  towards  further  modernisation 
and digitalisation of the existing system, in line with best practices.  

3.3.  REVENUE ADMINISTRATION 

The supplementary wage grid legislation for the Independent Authority for Public 
Revenue, which is a key step towards completing its human resources reform, has 
been  published  for  public  consultation  and  is  expected  to  be  adopted  by  end-
November  2020.  The  reform  is  expected  to  strengthen  the  Independent  Authority’s 
ability  to  maintain  and  attract  new  high  calibre  staff,  which  at  the  end  of  the  third 
quarter  remained  well  below  the  staffing  target  set  for  end-2019  (11 947  compared  to 
12 500) with a slightly downward trend (11 696 at the end of the second quarter). It is 
expected that the overall human resources reform will become operational by 1 January 
2021.  It  is  encouraging  that  the  necessary  funds  to  implement  the  human  resources 
reform  have  already  been  allocated  to  next  year’s  budget,  while  the  authorities  have 
confirmed  that  ongoing  hiring  procedures  at  the  Ministry  of  Finance  will  not  have  a 
negative impact on the Independent Authority’s overall capacity. 

A  draft  law  to  strengthen  the  anti-smuggling  framework,  including  provisions  to 
enhance the capacity of the Operational Coordination Centre, has been published 
for  public  consultation.  The  draft  law  includes  a  number  provisions  aiming  to 
strengthen the anti-smuggling framework and is  expected to  be adopted  by November 
2020.  Further,  the  draft  law  includes  provisions  to  enhance  the  capacity  of  the 
Operational Coordination Centre, which coordinates anti-smuggling efforts, and is part 
of the Independent Authority. The adoption of these provisions is expected to result in 
currently vacant posts being promptly filled. It is expected that additional resources will 
need to be assigned to the Independent Authority, as the implementation of a number of 
provisions is linked to the development and use of various digital tools. Finally, the new 
decentralised service of customs controls, including mobile units, which was established 
in  early-2020 is  yet  to  reach its  capacity (167 out  of 337 posts currently filled) and is 
expected to be fully operational in 2023.  

Overall, there is good progress in meeting the targets set for the key performance 
indicators,  including  on  debt  collection,  while  work  to  further  enhance  the 
Independent Authority’s collection and audit capacity continues. The collection of 

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old debt (KPI 1) for the second quarter yielded impressive results, considering the fact 
that  the  targets  were  set  before  the  pandemic  affected  the  economy  (see  table  3.1).  In 
addition, the collection ratio of new debts (KPI  2) is higher than in the previous  year, 
suggesting that most taxpayers had the necessary liquidity to cover their obligations on 
time,  thereby  also  benefitting  from  the  discounts  provided  for  timely  payments  that 
were  introduced  after  the  pandemic  outbreak.  On  audits,  model  audit  centres  are 
planned to be established in Attica and Thessaloniki by the first quarter of 2021. Finally, 
as concerns the social security contribution debt, €858 million was collected until end of 
the third quarter compared to a target of €1 083 million, which implies a slightly lower 
performance than in the preceding quarter. 

Table 3.2:  Key Performance Indicators of the Independent Authority for Public Revenue, second 

quarter 2020 

(*) End-2020 target, as no quarterly target has been set. 
(1) DRU: Dispute Resolution Unit 
Source: Independent Authority for Public Revenue. 

The authorities adopted settlement schemes for persons and companies benefitting 
from  the  tax  deferrals  that  were  put  in  place  at  the  beginning  of  the  pandemic. 
These liabilities will be allowed to  be repaid  after April 2021 in  up to  24 instalments. 
The  authorities  also  allowed  affected  debtors  who  defaulted  on  their  settlement  plans 
during the pandemic to re-enter them without the need to pay steep penalties as agreed 
in the context of the 2019 reform. For the remaining settlements that have been arranged 
before  the  entry  of  the  2019  settlement  legislation,  a  similar  ‘second  chance’ 
arrangement  is  yet  to  be  made  operational  and  is  expected  to  subject  the  debtors  to  a 
verification  of  the  reasons  of  dropping  out  and  compliance  history.  The  precise 
verification  mechanism  will  be  determined  through  secondary  legislation,  putting  in 
place  safeguards  for  filtering  out  strategic  defaulters,  which,  however,  remains  to  be 
drafted.  Such  a  provision  will  be  key  for  strengthening  payment  discipline  for  future 

11 

202020202019Q2Q2Q2TargetResultResultKPI 1Collection of tax debts as of the end of the previous year (million EUR)1 68314001 629KPI 2Collection of new debts in the current year (percent of new debt in the year)22.5%23.5%23%KPI 3Collection of debts by the large debtor unit (million EUR)330261.7357.4Audits of fresh tax cases by the whole IAPRKPI 4Percent of fresh tax audit cases in total completed audits70% (*)65.5%64.7%Tax audits and collection of large tax payersKPI 5Collection after audits in the year (percent of assessed tax and penalties)40% (*)100.9%108.6%Tax audits and collection of high wealth individualsKPI 6Collection after audits in the year (percent of assessed tax and penalties)40% (*)28.6%807.2%Tax refundsKPI 7Percent of VAT tax refund claims processed within 90 days95%95%89.1%Compliance and enforcementKPI 8Percentage of total tax paid on time for VAT, income and property taxes84%N/A83.2%Percentage of total tax paid on time for VAT, income and property taxesKPI 9Percentage of debtors under enforcement measures68%77%68.9%Pre-litigation phaseKPI 10Percentage of cases closed by explicit decision of the DRU80%97.7%78.9%Prosecution audits by mobile unitsKPI 11Prosecution audits by mobile units  (customs administration)17 5006 55610 246Debt collectionKPI 
  
 
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cases as well and it will be closely monitored that the second chance arrangement is not 
implemented before the provision is adopted. Similar to the above, the authorities have 
adopted  a  new  settlement  scheme  of  up  to  24  instalments  for  the  repayment  of  social 
security contributions deferred during the lockdown period. The introduction of the new 
scheme allows a deadline of end-July 2021 for the applications period. 

The  authorities  have  also  created  a  settlement  scheme  for  persons  who  defaulted 
on a bank loan secured with a state guarantee. These guarantees have been called by 
the banks and are currently being processed by the authorities, with a view to allowing 
them being paid by the state on behalf of the original debtor (see section 6.2). In order 
to  bolster  payment  discipline,  the  adopted  provisions  restrict  the  possibility  for 
reintroducing  these  liabilities  under  other  settlement  schemes  in  case  of  dropping  out 
from the new debt-repayment scheme. The developments with regards the existing and 
new  settlement  schemes  will  continue  to  be  closely  monitored  under  the  enhanced 
surveillance framework. 

3.4. PUBLIC FINANCE MANAGEMENT 

The  stock  of  arrears  decreased  since  the  last  report  but  sustained  efforts  are 
required to meet the ambitious target for the end of the year. The slippages created 
early-2020  also  due  to  the  pandemic  have  been  recovered,  except  for  the  backlog  of 
unprocessed pension claims. Thereby, in September 2020, the stock of arrears amounted 
to €1.2 billion, which is equivalent to the level observed in December 2019. The set of 
additional  measures  designed  to  bring  the  implementation  of  the  plan  back  on  track 
have started to show positive results and the stock of arrears has improved since April 
2020  in  all  areas  except  for  the  pension  claims (12).  At  the  same  time,  the  stock  of 
arrears  remains  currently  €800 million  above  the  renewed  target  set  for  December 
2020 (13), which calls for a sustained effort in the forthcoming months.  

Table 3.3:  Stock of arrears 

(1)All data are adjusted according to the definition of arrears for the purpose of the enhanced 
surveillance. 
Source: European Commission. 

(12) Since April 2020, arrears have decreased by €314 million. 
(13) The target set in the updated version of the October 2019 clearance plan is to eliminate the bulk of the 
stock of arrears by December 2020 with the exception of a €400 million backlog pertaining to pension 
claims. 

12 

General government arrears (million EUR)December 2019April 2020September 2020Total 1 2221 5301 216of which:Social Security Funds338341156Main pensions claims389446497Extra Budgetary Funds 190220149Local Governements136218180Tax refunds 11512081State 549574Hospitals 09078 
  
 
                                                 
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The  revised  clearance  plan,  updated  to  reflect  the  recent  surge  in  unprocessed 
pension claims, keeps unchanged the December 2020 deadline for eliminating the 
bulk of the stock of arrears, with pension claims to be cleared by December 2021 
instead  of  June,  as  previously  foreseen.  In  the  revised  clearance  plan  adopted  in 
October 2020, the authorities have reiterated their commitment to eliminate the stock of 
non-pension  arrears  by  December  2020,  which  seems  challenging.  Nevertheless,  the 
most problematic issue concerns delays with processing pension claims, where the stock 
of  arrears  increased  by  more  than  €300 million  since  January  2019.  This  trend  was 
triggered  by  two  factors.  An  early-2019  legislation  that  allowed  the  self-employed  to 
start  settling  their  debts  on  social  contributions  in  long  settlement  plans  and 
subsequently  apply  for  pensions  on  the  one  hand,  and,  on  the  other  hand,  difficulties 
with  the  timely  recording  of  claims  submitted  manually,  an  issue  that  has  been 
addressed since September 2019. The automation of the processing and awarding of the 
new pension claims, which is crucial for accelerating their clearance, is on track and the 
additional  measures  devised  to  clear  the  stock  of  manually  processed  claims  have 
started  to  bear  fruit.  The  clearance  of  pension  claims  is  expected  by  December  2021. 
Nevertheless, the new restrictions on movement of people are expected to lead to further 
increases in arrears, in particular in the area of pensions, as the work cannot be done in a 
remote way. 

the 

internal  control 

the  conceptual  framework  regarding 

New  arrears  continue  to  be  created,  which  underlines  the  importance  of 
implementing  the  Hellenic  Court  of  Auditors  recommendations,  a  mid-2021 
specific  commitment,  amongst  which  strengthening  the  internal  control  system  is 
key. August data shows that new arrears continue to be created, which calls for a swift 
implementation  of  the  structural  reforms  recommended  by  the  Hellenic  Court  of 
Auditors, which includes the reinforcement of the internal control system in the public 
finance management area. Such a reform would also be key for the sound management 
of the projects to be funded through the Recovery and Resilience Facility. A draft law 
on 
the  public 
administration is  planned to  be adopted by the end of the  year and is  also  expected to 
strengthen  integrity  and  anticorruption  mechanisms  across  public  administration  (see 
section  9.4).  The  National  Transparency  Authority  is  substantially  contributing  to  this 
work stream and has elaborated guidelines in order to operationalise the internal control 
conceptual  framework  as  to  meet  actual  public  finance  management  needs.  The 
challenge lies now in  its full implementation by  the financial services units across the 
public administration as well as in its effective supervision by the Ministry of Finance. 
At  the  same  time,  there  are  positive  steps  regarding  the  implementation  and  the 
operationalisation  of  internal  audits  units,  an  outstanding  recommendation  by  the 
Hellenic  Court  of  Auditors.  The  Court  reinforced  awareness  by  general  government 
entities  of  their  legal  obligations,  and  has  adopted  a  manual  for  auditing  the  internal 
control  systems  of  the  entities  and  services  subject  to  its  jurisdiction,  with  a  view  to 
scheduling  a  programme  for  auditing 
internal  control 
mechanisms  and  processes  in  2021 (14).  In  addition,  the  authorities  decided  to  launch 
work  on  the  simplification  of  the  legal  and  administrative  framework  for  budget 
execution  and  payment  procedure,  with  first  results  expected  by  early  December 

implementation  of 

the 

in 

(14) Law  4700  adopted  in  June  2019  has  made  the  audit  of  the  internal  control  systems  one  of  the  core 
competence of the Hellenic  Court of Auditors and the Court decision 2014/2020, has reinforced the 
legal responsibility of officials in charge of implementing internal control systems.  

13 

                                                 
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2020 (15).  This  work  stream  will  address  the  recommendations  of  the  International 
Monetary Fund technical support report published in March 2020, and the outcomes of 
the forthcoming technical support provided through the European Commission on lean-
management.  

The  mid-2020  specific  commitment  on  establishing  the  Treasury  Single  Account 
system  has  been  successfully  completed.  The  Treasury  Single  Account  system  is 
operational  and  offers  an  overview  of  the  cash  situation  of  the  state  as  well  as  an 
efficient liquidity-monitoring tool. The general government entities that remain outside 
of the Treasury Single Account are not material in terms of total liquidity, and a legal 
provision  is  being  prepared  in  order  to  exempt  those  with  insignificant  cash  reserves 
from  the  obligation  to  join.  The  volume  of  electronic  payments  is  growing  and  an 
increasing number of entities have joined the e-payment platform offered by the Bank 
of Greece for this purpose. The Ministry of Finance has set up a dedicated tool for the 
monitoring of the entities’ cash forecasting. This tool also allows for the surveillance of 
the rules related to the maximum amount of liquidity that the entities are entitled to hold 
in  commercial  banks (16).  The  regularity  and  quality  of  the  submitted  cash  forecasts, 
which cover  about  70%  of Greece’s liquidity, have improved and  are now considered 
satisfactory.  In  2021,  the  Ministry  of  Finance  plans  to  extend  the  cash  forecasting 
project to reach 90% coverage.  

The Chart of Accounts reform, including mid-2021 and mid-2022 commitments, is 
overall on track and its implementation in the Public Investment Budget is starting 
to  advance.  The  administrative  classification  of  the  Chart  of  Accounts,  already 
implemented for the ordinary budget in 2019, will be complemented with a functional 
classification, the design of which is currently being developed. The authorities intend 
to integrate the functional classification with the performance budgeting framework that 
is  being  developed.  These  are  welcome  and  ambitious  reforms.  Technical  support  is 
being  provided  for  the  accounting  reform  through  the  European  Commission  and  the 
International Monetary Fund. On the other hand, the full implementation of the Chart of 
Accounts in the Public Investment Budget is progressing. This is a prerequisite for the 
interoperability  of  the  e-payment  system  of  the  Ministry  of  Development  and 
Investment (17)  with  the  central  IT  system  operated  by  the  Ministry  of  Finance.  The 
digitalisation  of  the  Public  Investment  Budget  execution  and  payment  system  and  its 
interoperability  with  the  central  IT  system  are  expected  to  speed  up  substantially  the 
payment chain and reduce dramatically the scope for building up new arrears. Work on 
the e-invoicing application for public procurement, which is being developed under the 
wider framework of the accounting reform, is progressing according to schedule, and is 
expected to go in operation before the end of 2020 (see section 3.4). In the meantime, 
the procurement of the upgraded IT system, to support financial, budgetary, and fiscal 

(15) In the short-term the action is mainly aimed at reviewing procedures with respect to the Recovery and 
Resilience Facility but the work will continue to encompass the streamlining of budget execution and 
payment procedures, in view of the planned migration towards the upgraded central administration IT 
system. 

(16) The 15 days liquidity buffer rule is stipulated in the law 4549/2018. The maximum liquidity that the 
entities are allowed to hold in commercial banks equals to the estimated net cash requirements for the 
next fifteen days. 

(17) The  e-system  is  called  ePDE  and  is  being  implemented  with  technical  support  funded  through  the 

European Commission Reform. 

14 

                                                 
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reporting by the state, which is key for the success of the accounting and wider public 
finance management’s reforms,  is  expected to  be delivered without substantial  delays, 
by March 2021. 

The authorities plan to adopt a major public procurement reform by the end of the 
year (see box 3.1). This would be crucial for ensuring a quick absorption of available 
financial  resources  and  supporting  the  recovery.  The  reform  builds  on  the  experience 
with implementing the rules put in place in 2016. In terms of ensuring a swift resolution 
of  legal  claims  and  avoiding  that  they  burden  the  judiciary  system,  the  authorities  are 
planning to  adjust the enabling provisions of the ‘remedies review body’.  It  would be 
important  that  the  planned  changes  to  the  review  body  reinforce  the  principles  of 

15 

Box 3.1: Revision of the public procurement frameworkSubstantial public procurement reforms were undertaken under the programmes, with a view to increasing transparency and efficiency in the use of public money, reinforcing public trust in the institutions, and improving the general functioning of goods and services markets. Public procurement reforms also aimed at ensuring a common approach across government authorities for tendering procedures and controls. The authorities initiated the reform of public procurement procedures, by setting up the Single Public Procurement Authority (SPPA) – an independent central body for the coordination, planning and implementation of procurement procedures, as well as the monitoring of public procurement policy. A legislative reform was concluded in 2016, encompassing the simplification, codification and consolidation of the national legislation. Other notable achievements include the reform in the area of the remedies system (with the setting up of the remedies review body) centralised procurement and e-procurement.  Despite these reforms, some deficiencies in the Greek public procurement market persist to date. For instance, lessons learnt from the application of the 2016 reform suggested that further legislative tools are needed to address the recurring problems of a high number of single bid procedures, as well as contracts awarded exclusively based on the lowest price and often with excessively high discounts compared to the originally estimated cost. Moreover, the still lengthy award procedures suggested that the deadline for some procedural steps were not sufficiently precise. The high number of complaints and related significant burden for the judicial system, contracting authorities and economic operators, was reported to be particularly problematic. As a result, a number of deficiencies were identified, namely the need to further streamline electronic procurement facilities and professionalise the procurement staff, as well as further promote central purchasing. These deficiencies have a particularly negative impact on small and medium-size enterprises. In addition, it was assessed that the delays in the absorption of available financial resources were also due to deficiencies in the public procurement framework.  Against this background, the authorities plan to amend the public procurement legal framework by early-December 2020. The reform aims at accelerating the award procedures, simplifying the public procurement legal framework, reducing the administrative burden for contracting authorities and economic operators, expanding the e-procurement to lower budget thresholds and alleviating the burden for the judiciary system. Under the new legal framework, the award procedures should be significantly simplified and accelerated.  Public tenders are expected to be more transparent and accessible to small and medium-sized enterprises thanks to the new legal framework that would also foster competition. Small and medium-size enterprises should particularly benefit from the simplification in the public procurement processes and judicial remedies. In order to address the phenomenon of excessively low offers, the method for identifying an offer as excessively low will be better specified and the economic operators will be required to provide justification. In addition, judicial dispute settlement will be accelerated. Finally, financial incentives for the participation in public procurement evaluation committees will be designed and will be linked to the professionalisation of the public procurement staff. The authorities committed to shortly proceed with enacting the secondary acts to implement these new provisions effectively.  
 
 
   
 
 
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independence  and  impartiality,  and  the  recruitment  follows  a  transparent  selection 
process  for senior management.  Progress  is  being made regarding the digitalisation of 
public  procurement  through  the  e-invoicing  project  (see  section  3.4).  In  addition,  the 
authorities  are  preparing  a  public  procurement  strategy  for  2021-2025,  which  is 
expected  to  be  adopted  in  February  2021.  The  strategy  will  reflect  the  main 
recommendations of technical support provided by the World Bank (see section 7.2). It 
will be built on four strategic pillars and will encompass an anti-corruption component. 
The authorities also intend to conclude in early-2021 a partnership agreement with the 
European Commission, with a view to be supported in their endeavour.  

3.5.  PUBLIC INVESTMENT  

In  anticipation  of  the  large  amounts  of  funds  that  Greece  is  expected  to  receive 
under  the  next  Multiannual  Financial  Framework  (European  Structural  and 
Investment  Funds  and  Recovery  and  Resilience  Facility),  the  authorities  have 
decided  to  create  a  Strategic  Projects  Pipeline  for  the  selection  of  large 
infrastructure  projects  of  national  importance.  The  Strategic  Projects  Pipeline  will 
be  coordinated  at  the  level  of  the  Presidency  of  the  Government,  outside  the  core 
structure of the line ministries to avoid conflicts of interest.  

In  order  to  improve  and  accelerate  maturation  of  investment  projects  of  the 
strategic  project  pipeline,  the  authorities  are  in  the  process  of  establishing  a 
Project Preparation Facility. This is an important and welcome initiative, which aims 
to  address  structural  obstacles  in  the  preparation  and  implementation  of  public 
investments documented in earlier reports. The Project Preparation Facility is expected 
to  prepare  priority  investment  projects  having  a  budget  in  excess  of  €20 million  in 
energy,  environment,  transport  and  digital  sectors.  The  authorities  expect  the  total 
number  of  projects  to  reach  40-45  and  the  median  size  of  the  projects  to  be  around 
€120 million. The Project Preparation Facility is expected to become a new unit in the 
Hellenic  Republic  Asset  Development  Fund.  The  Fund’s  statute  will  need  to  be 
amended in order to add this new mandate and to allow it to prepare projects on behalf 
of  the  Hellenic  Republic.  Other  changes  to  the  Hellenic  Republic  Asset  Development 
Fund law will be needed to safeguard the Hellenic Republic Asset Development Fund’s 
original  mandate  related  to  privatisations  and  to  ensure  that  the  establishment  of  the 
Project Preparation Facility does not adversely affect the Hellenic Corporation of Assets 
and Participations, the Fund’s holding company. An  International  Financial  Institution 
will be selected as strategic partner. 

The  action  plan  to  enhance  the  monitoring  and  forecasting  of  the  Public 
Investment Budget is broadly on track. The enhanced exchanges of data between the 
Ministry of Development and the Ministry of Finance, the monthly updates on the total 
Public Investment Budget allocation of expenditure based on actual payments as well as 
the  quarterly  Public  Investment  Budget  revenue  forecast  updates  are  conducted  as 
planned. Other actions related to the electronic creation, management and finalisation of 
payment orders are still in progress, in line with  the timetable (see section 3.4). Some 
delays  were  observed  in  the  technical  implementation  of  the  interoperability  of  the 
information systems of the two ministries due to technical problems, which were more 
serious than initially anticipated. These problems are planned to be resolved by the end 

16 

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of December 2020 with the aim to complete the automatic data exchange by the end of 
March 2021. In the context of the action plan, technical support is being provided by the 
European  Commission  on  automating  and  streamlining  implementation  procedures, 
while an additional project to support the collection, handling and reporting of the data 
related to the Public Investment Budget had started in July 2020.  

17 

4. 

SOVEREIGN FINANCING AND DEBT SUSTAINABILITY 

ANALYSIS 

4.1.  SOVEREIGN FINANCING 

Greek  sovereign  yields  remain  low  and  the  government’s  cash  buffer  is  back  at 
pre-crisis  levels.  The  recent  15-year  bond  issuance  on  21  October  faced  no  sign  of 
market  pressures,  with  depressed  yield  and  bid-to-cover  ratio  in  line  with  auctions  in 
previous months. The yield spreads of the long term sovereign bonds of Greece remain 
at  historic  lows.  On  the  10-year  tenure,  spreads  over  the  German  bund  are  hovering 
around 150 basis points, which is about 10 basis points below the September average. 
The general government’s cash reserves were replenished through bond issuances in the 
previous  months,  and  stood  at  €34.5 billion  at  the  end  of  September.  The  cash  buffer 
account (18)  balance  remained  at  €15.7 billion.  The  overall  general  government  cash 
reserves would be sufficient to cover around two years of financing needs even without 
further  bond  issuances.  Sovereign  financing  conditions  are  expected  to  remain 
favourable, supported also by liquidity measures agreed at European level, including the 
European  Central  Bank’s  Pandemic  Emergency  Purchase  Programme,  and  the 
availability of the European Stability Mechanism’s Pandemic Crisis Support facility. 

4.2.  DEBT SUSTAINABILITY ANALYSIS 

The European Institutions have carried  out a comprehensive revision of the debt 
in  the  5th  enhanced 
sustainability  framework  for  Greece,  as  announced 
surveillance report (19). The revised framework includes a baseline scenario, which is 
aligned with the Commission framework applied to assess the debt sustainability for all 
other Member States (20), and a country-specific scenario analysis to assess the risks. As 
in previous reports, we continue to show results over the extended horizon running up to 
2060. 

The main revisions of macroeconomic assumptions are as follows (21): 

  Real  GDP  growth  assumptions.  The  current  framework  continues  to  build  on  the 
latest  Commission  forecast  in  the  short  term  and  on  the  assumption  of  output  gap 

(18) The  cash  buffer  account  was  built  also  through  disbursements  under  the  European  Stability 
Mechanism programme and dedicated to debt service. Greece may use this amount for other purposes 
as well, following an approval of the European Stability Mechanism’s governing bodies. 

(19) Until  the  current  review,  the  assumptions  for  Greek  debt  sustainability  analysis  have  followed  the 
methodology described in the June 2018 Fourth Review Compliance Report, based on which Greece 
was put under enhanced surveillance as of August 2018. 

(20) The methodological details are published with every Debt Sustainability Monitor/Fiscal Sustainability 
Report  update,  and  the  long-term  underlying  macroeconomic  assumptions  with  the  2021  Ageing 
Report. 

(21) The  baseline  includes  the  impact  from  the  EU-level  recovery  instruments,  including  the  ECB 
Pandemic  Emergency  Purchase  Programme,  only  in  so  far  as  sovereign  financing  conditions  are 
expected  to  remain  favourable  and  stable  over  the  medium-term  and  beyond,  as  well  as  foster 
convergence in euro area growth rates and spreads through confidence effects. No direct impact from 
the use of the Recovery and Resilient Fund is explicitly modelled in this DSA update. 

18 

                                                 
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closure in the fifth forecast  year. The long-term  growth developments are anchored 
to the macroeconomic assumptions of the revised 2021 Ageing Report, which reflect 
the recent reforms affecting the sustainability of public finances in the long run (such 
as  pension  reforms,  and  health  and  long-term  care  measures),  recent  demographic 
projections with an impact on participation rates and labour market variables, and the 
assumption  of  convergence  in  labour  productivity  across  Member  States.  The 
updated long-term growth is on average 0.4 percentage points higher compared to the 
one assumed before. Graph 4.1. shows an overview of the decomposition of potential 
growth,  and  a  full  description  of  labour,  capital  and  total  factor  productivity 
contributions  is  provided  in  the  2021  Ageing  Report (22).  The  projections  do  not 
take into account the potential positive impact on the growth potential of reforms and 
investments that could be implemented under the Recovery and Resilience Facility, 
given that plans are at an early stage of elaboration currently. 

Graph 4.1:  Long term real GDP growth (%) 

Source: Commission services. 

  Inflation assumptions. The short-term assumptions for the inflation rate build on the 
latest  Commission  forecast.  Beyond  that,  in  order  to  enhance  consistency  with 
inflation expectations as reflected by the markets in the sovereign’s financing costs, 
the  country-specific  GDP  deflator  was  anchored  to  euro  area  inflation  expectations 
measured by the ‘5-year 5-year’ inflation-linked  swaps until  the fifth  forecast  year, 
while  assuming  a  gradual  convergence  to  the  2%  inflation  target  by  2030 (23).  The 

(22) See  Commission  (2020),  The  2021  Ageing  Report,  “Underlying  assumptions  &  projections 

methodologies”, November 2020. 

(23) The 5-year forward swap rate 5 years ahead measures the five-year inflation expectations five  years 
from  now.  The  information  content  of  5-year  inflation-linked  swaps  in  respect  to  inflation 
expectations is known to be affected by an inflation risk premium. However, when deflationary and 
inflationary  risk  are  broadly  balanced,  the  inflation  risk  premium  is  small,  which  seems  to  be  the 

19 

-1.0-0.50.00.51.01.52.02.5Labour inputTotal factor productivityCapital deependingPotential growth   
                                                 
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inflation differential  observed between the euro  area and Greece in the last  year of 
the  short-term  (two-year-ahead)  forecast  is  kept  constant  until  the  end  of  the  fifth 
forecast year, and gradually eliminated by the tenth year. The baseline assumption on 
medium-term inflation path can be subject to further methodological improvements 
with the forthcoming 2020 Debt Sustainability Monitor. 

  Interest  rate  assumptions.  The  revised  framework  moves  away  from  modelling 
Greek market interest rates as a sum of the risk-free rate and a risk premium, which 
relied on two separate sub-models.  Instead, the baseline assumption is aligned with 
the  horizontal  Commission  framework  for  debt  sustainability.  Since  the  2019  Debt 
Sustainability Monitor, the horizontal framework uses the forward rates on the short- 
and  long-term  interest  rates  for  all  Member  States  to  set  the  interest  rate  levels  on 
new debt issuances for the following ten years (24). This revision to the methodology 
captures  well  the  current  low-inflation  and  low-interest-rate  environment  through 
market-based  indicators  that  are  readily  available  and  well  understood (25).  Beyond 
the tenth forecast year, the new framework builds on the 2021 Ageing Report, which 
includes  converging  real  interest  rate  projections  across  euro  area  countries  in  the 
long term (over a thirty-year horizon transition period). The long-term euro area real 
interest  rate  was  revised  to  2%,  downwards  from  the  historical  average  of  3%,  in 
light  of  recent  economic  literature  and  evidence  on  the  declining  trend  in  interest 
rates  in  advanced  economies (26).  This  is  consistent  with  the  assumption  of  an 
average  growth  rate  of  (real)  potential  GDP  of  1.5%  by  the  end  of  the  projection 
period. The re-payment projections for the European Financial Stability Facility and 
European Stability Mechanism loans have been made consistent with the long-term 
euro  area  nominal  interest  rate  that  is  converging  to  4%  by  the  end  of  the  thirtieth 
forecast year. The 10-year rate for Greece averages 3% between 2020 and 2060. 

  Fiscal  assumptions.  The  fiscal  path  is  based  on  the  Commission  2020  autumn 
forecast up to 2022, and continues to be based on the conclusions reached at the June 
2018 Eurogroup on measures to ensure debt sustainability thereafter. In line with the 
autumn  forecast,  Greece  is  expected  to  reach  a  primary  deficit  of  0.8%  in  2022. 
Thereafter,  the  fiscal  path  is  based  on  the  conclusions  reached  at  the  June  2018 
Eurogroup, where Greece agreed that its fiscal commitments remain in line with the 
EU fiscal  framework, which, according to the analysis undertaken by the European 
Commission at the time, would imply a primary surplus of 2.2% of GDP on average 
in the period from 2023 to 2060. The revised methodology thus reflects the current 
application of the General Escape Clause. 

current situation in the euro area. Evidence shows that this indicator is less affected by inflation risk 
premium than in the past for the euro area (See e.g. Camba-Mendez, G. and T. Werner (2017), “The 
inflation risk premium in the post-Lehman period”, ECB Working Paper 2033, March 2017). 

(24) For  details  see  Box  3.1.  “Revisions  in  the  interest  rate  assumptions:  rationale,  description,  and 

impact”, 2019 Debt Sustainability Monitor (DSM). 

(25) As Greece has started to be more present in the debt markets and is expected to issue along the yield 
curve  over  the  medium  term,  the  market-based  indicators  are  considered  to  become  increasingly 
relevant. 

(26) See for example Abbas, S. A., Pienkowski, A., and Rogoff, K. (Editors) (2020). ‘Sovereign Debt: A 
Guide for Economists and Practitioners’, Oxford University Press; Blanchard, O. (2019). ‘Public Debt 
and Low Interest Rates’, American Economic Review 190(4); and IMF Working Paper (2020), “It is 
Only Natural: Europe’s Low Interest Rates.” 

20 

                                                                                                                                               
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To assess the sensitivity of the baseline assumptions, two alternative scenarios have 
been  developed,  which  replace  the  single  adverse  scenario  published  in  previous 
reports. The main elements are as follows: 

  Higher risk premium scenario. This scenario links risk premia to the level of debt in 
the medium and long run, similar to past approach. This is captured by replacing the 
market-based  projections  for  interest  rates  and  their  gradual  convergence  to 
horizontal  levels  in  the  long  term,  which  are  used  in  the  baseline  scenario,  with  a 
model-based projection after the fifth forecast year, building on the euro area ‘AAA’ 
interest rate and a risk premium. The euro area rate is assumed to gradually converge 
to 4% by 2050 as in the baseline. The risk premium follows the methodology used in 
previous  enhanced  surveillance  reports,  adjusted  for  the  unique  structure  of  Greek 
debt  that  features  a  large  share  of  official  debt (27).  The  10-year  rate  for  Greece 
averages 4.1% between 2020 and 2060 in this scenario. 

  Lower GDP growth and higher risk premium scenario. In this scenario, growth rates 
remain  below  that  of  the  baseline  scenario  in  the  long  term,  which  also  implies 
market interest rates remaining higher than the euro area rates in the long term. The 
refinancing rate on long-term debt would follow the same model-based projections as 
in  the previous scenario, while nominal  growth  is assumed to  remain at 3% once it 
converges  to  this  level (28).  This  would  be  consistent  with  a  lower  growth  rate  of 
GDP  per  capita,  indicating  a  lower  reform  effort  in  the  medium  term.  The  risk 
premium is considered to reflect lower growth and is steadily increasing during the 
transition to the long-term, as markets progressively start to price in the high level of 
debt on a different GDP growth path. 

Table 4.1:  Assumptions in the baseline scenario 

Note: The table report the primary balances in accrual term, but the calculations take into 
account cash-accrual adjustments for the short-term forecast.  
Source: European Commission. 

(27) This feedback rule builds on several studies in the literature on the impact of increases in deficits and 
government  debt  on  long-term  interest  rates,  notably  T.  Laubach  (2009),  “New  Evidence  on  the 
Interest Rate Effects of Budget Deficits and Debt”, Journal of European Economic Association, vol. 7, 
no. 4, pp. 858-885. The current formulation augments the work of T. Laubach (2009) by taking into 
account the unusual characteristic that a large share of the Greek debt is owned by the official sector. 
To account for this feature, we regress the Greek spread over the euro area ‘AAA’ interest rate on a 
constant that evolves across time/regime, on the debt-to-GDP ratio (minus 60%, following Laubach’s 
study) and on the level of the official funding expressed as a share of total debt. Finally, time variation 
is  included  in  the  constant  to  allow  reflecting  incidences  not  captured  by  the  model  (such  as 
quantitative easing). Using quarterly data for Greece between the third quarter of 2010 and the second 
quarter of 2020, we estimate the following: 

𝑅𝑖𝑠𝑘 𝑝𝑟𝑒𝑚𝑖𝑢𝑚

(28) A default ceiling of 6% for the refinancing rate on long-term debt was assumed as in previous DSA 

updates. 

21 

202020212022202320242030204020502060average 2020-2029average 2030-2060Primary balance (% of GDP)-3.8-3.6-0.82.22.22.22.22.22.20.72.2Real GDP growth-9.05.03.52.21.90.71.71.61.50.61.5Nominal GDP growth-10.25.54.53.43.02.83.83.63.51.63.5Re-financing rate (10 year maturity)1.51.61.61.71.72.13.14.04.01.83.4 
   
 
 
                                                 
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Table 4.2:  Assumptions under the risk scenarios 

Source: European Commission. 

The update of the debt sustainability analysis takes into account the deteriorated 
near-  to  medium-term  macroeconomic  outlook  and  other  regular  technical 
updates,  and  the  risks  highlighted  by  the  scenario  analysis  Similar  to  previous 
analyses,  the  revised  methodology  continues  to  assume  the  full  implementation  of  all 
medium-term measures agreed in June 2018. In particular, the income equivalents from 
the SMP-ANFA profits are, on a technical basis, assumed to be disbursed and used for 
debt  service  purposes  only.  The  analysis  also  includes,  as  under  the  previous 
methodology,  updated  interest  and  amortisation  payments  on  official  and  non-official 
loans, new issuances and plans, an updated privatisation schedule and an updated short-
term macroeconomic outlook in line with the autumn forecast. 

Results of the debt sustainability analysis  

Despite the deteriorated short-term outlook, the baseline scenario shows a return 
to declining debt-to-GDP  ratio.  The pandemic is  expected to  have a sizeable impact 
on the Greek government debt, which is projected to increase from 180.5% of GDP in 
2019  to  over  207%  of  GDP  in  2020.  This  would  a  priori  increase  medium-term 
sustainability  risks.  However,  as  the  emergency  fiscal  measures  taken  during  the 
pandemic  are  announced  to  be  temporary  and  the  economy  is  projected  to  start 
recovering in 2021, the debt-to-GDP ratio is expected to set on a declining trend, also 
supported by the favourable financing conditions (29). Nevertheless, until the mid-2040s 
the  debt  ratio  would  remain  above  100%.  The  government  gross  financing  needs  are 
expected to hover around 15% of GDP for the next 20 years, before decreasing to about 
13% of GDP by 2060. These long-term results are closely aligned with the projections 
presented  in  the  5th  enhanced  surveillance  report.  The  unfavourable  effects  of  the 
present  increase  in  government  debt  and  the  deteriorated  short-run  macroeconomic 
outlook  are  now  expected  to  be  compensated  by  the  assumed  favourable  financing 
conditions (Table 4.3). 

The baseline assumptions are subject to uncertainty, which is increasing over the 
projection horizon. Financing conditions could turn out less favourable than assumed, 
in  particular  beyond  the  medium-term.  Uncertainty  is  also  related  to  the  long-term 
growth assumptions, which becomes all the more relevant during the current pandemic, 
given the large uncertainties surrounding its duration and a potential long-lasting impact 
on economies.  If the crisis proves to  be more persistent  than currently assumed under 
the baseline, potential growth could be lower than expected. These factors are captured 
in the alternative scenarios.  

(29) The  baseline  includes  the  impact  from  the  EU-level  recovery  instruments,  including  the  European 
Central  Bank’s  Pandemic  Emergency  Purchase  Programme,  only  in  so  far  as  sovereign  financing 
conditions  are  expected  to  remain  favourable  and  stable,  as  well  as  foster  convergence  in  euro  area 
spreads, as the ‘flight-to-safety’ phenomenon within the euro area is being reduced. 

22 

202020212022202320242030204020502060average 2020-2029average 2030-2060Baseline scenario-10.25.54.53.43.02.83.83.63.51.63.5Higher risk premium scenario-10.25.54.53.43.02.83.83.63.51.63.5Low growth scenario-10.25.54.53.43.02.83.03.03.01.63.0Baseline scenario1.51.61.61.71.72.13.14.04.01.83.4Higher risk premium scenario1.51.61.61.71.73.64.35.45.42.44.7Low growth scenario1.51.61.61.71.73.64.55.96.02.45.0Nominal GDP growth (%)Re-financing rate (%) 
   
 
                                                 
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Table 4.3:  Decomposition of change of results on gross financing needs due to the revised 

assumptions 

Note: the table shows the incremental impact of changing each assumption ceteris paribus. The 
decomposition is mildly sensitive to the sequencing order. 
Source: Commission services. 

Table 4.4:  Decomposition of change of results on debt-to-GDP ratio due to the revised 

assumptions 

Note: The table shows the incremental impact of changing each assumption ceteris paribus. The 
decomposition is mildly sensitive to the sequencing order. 
Source: Commission services. 

The  two  alternative  scenarios  suggest  that  higher  refinancing  rates  would 
deteriorate the outlook, and more so if combined with low growth underlining the 
importance of proceeding with an ambitious growth agenda. Under the higher risk 
premium scenario, the debt ratio, while on a declining path, remains significantly higher 
than  in  the  baseline  projections;  the  gross  financing  needs  are  also  higher  and  remain 
marginally below 20% of GDP in the long run. However, under the higher risk premium 
scenario  augmented  with  low-growth,  GDP  per  capita  does  not  converge  to  the  euro 
area average and thus  large spreads  emerge and  increase progressively over the  entire 
horizon.  As  a  result,  the  debt  level  remains  high  in  the  long  run;  the  gross-financing-
needs ratio is consequently persistently rising in the medium and long term, and is set to 
exceed 20% by the mid-2030s. The results of this scenario highlight the importance of 
delivering  on  the  growth  agenda  whose  draft  was  prepared  by  the  ‘Pissarides 
Commission’  and  published  by  the  authorities  in  August  2020,  especially  considering 
that the long-term economic growth rate is by about ½ a percentage point lower than in 
the baseline. This underlines the importance of keeping up the reform momentum and 
continuing with an ambitious reform agenda in the future. The Recovery and Resilience 
Facility will be a key opportunity in this respect.  

23 

2020202120222023202420302040205020605th report baseline7.94.86.45.57.98.412.914.113.4  + update of interest rates0.00.00.0-0.1-0.1-1.2-4.8-6.7-7.3  + update of growth2.21.41.71.71.92.83.23.02.7  + update of primary balance12.07.44.37.33.83.94.03.83.6  + other updates-2.12.32.9-1.7-2.41.10.80.50.68th report baseline20.115.915.312.711.115.116.014.713.02020202120222023202420302040205020605th report baseline165.5157.1149.2140.4135.6111.8101.785.167.7  + update of interest rates0.10.00.0-0.1-0.2-3.4-22.6-32.4-35.1  + update of growth32.328.325.423.923.528.721.515.212.9  + update of primary balance11.117.921.521.821.720.820.118.817.4  + other updates-1.8-3.7-3.01.31.72.40.0-0.21.28th report baseline207.1199.6193.1187.3182.2160.4120.686.464.0 
  
 
 
  
 
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Graph 4.2:  Debt sustainability indicators (% of GDP) 

Source: European Commission. 

Additional mitigating/aggravating factors 

The  composition  and  maturity  profile  of  government  debt  mitigates  debt 
vulnerabilities,  while  additional  risks  could  emerge  from  sizeable  contingent 
liabilities.  A  large  share  of  debt  is  financed  at  low  rates  by  official  lenders  and  the 
average  maturity  increased  largely  over  the  past  years  (average  residual  maturity  on 
medium  and  long-term  debt  is  about  21  years  in  2020),  effectively  insulating  the 
financing costs from short-term fluctuations and reducing rollover risks. The Recovery 
and  Resilience  Facility  is  also  expected  to  be  a  mitigating  factor  that  could  support 
growth  potential  through  investments  and  reforms.  Aggregate  interest  expenditure 
would  remain  low  in  the  baseline  scenario  by  historical  standards.  The  large  share  of 
government  debt  held  by  official  lenders  and  the  stable  evolution  of  liquidity  buffers 
also  contribute  to  the  resilience  of  the  debt  position  to  global  market  fluctuations.  By 
contrast, risks stem from the uncertainty related to contingent liability from the private 
sector, including materialisation of state guarantees to firms and self-employed granted 
during  the  pandemic  crisis.  Finally,  a  reversal  in  the  currently  observed  low-interest-
environment over the medium-term could also be considered an aggravating factor, if it 
materialises.  

24 

04080120160200240202020222024202620282030203220342036203820402042204420462048205020522054205620582060Gross government debtLow growth scenarioHigher risk premium scenarioBaseline scenario5th report baseline scenario051015202530202020222024202620282030203220342036203820402042204420462048205020522054205620582060Gross financing needsLow growth scenarioHigher risk premium scenarioBaseline scenario5th report baseline scenario  
 
5. 

SOCIAL WELFARE 

5.1.  PENSIONS 

The  authorities  are  making  good  progress  in  finalising  the  organisational  and 
institutional  setup  of  the  Single  Social  Security  Fund  (e-EFKA),  an  end-2020 
specific  commitment.  The  merging  of  the  public  sector  and  supplementary  pension 
functions  has  already  been  implemented  including  the  physical  move  of  offices;  the 
remaining  move  concerns  the  employees  of  the  former  farmers’  fund  (OGA)  and  is 
expected to be fully completed by the end of the year.  

The  digital  processing  of  pension  applications  has  also  progressed  according  to 
targets, albeit it is expected to slow down in the coming months. The digitalisation 
of  the  processing  of  survivor  pensions  and  pensions  for  farmers  has  already  been 
completed; the next step is to digitalise the processing of disability pensions and of the 
pensions for medical professionals. The pace of processing is expected to slow down in 
the coming months due to data availability issues and due to the coronavirus pandemic. 
The  authorities’  target  for  the  digital  processing  of  digitally  submitted  applications  is 
therefore only 10 percentage points higher by end-March 2021 (40%) compared to the 
already  reached  end-June  2020  target.  After  this,  the  processing  is  expected  to 
accelerate again and to reach 75% by end-June 2021. Achieving these targets underpins 
the  December  2021  arrears  clearance  target  on  the  processing  of  pension  claims  (see 
section 3.4). 

5.2.  HEALTHCARE 

Greece is strengthening the preparedness of the health-care system for the current 
health  emergency.  Laboratory  testing  capacity  is  being  strengthened,  along  with 
expanding  the  network  of  sampling  points.  In  terms  of  staff,  6 000  new  recruitments 
were made to tackle the coronavirus, including medical, nursing, paramedical and other 
staff.  Approximately  1 400  permanent  doctor  positions  were  filled,  which  will  be 
supported  by  an  additional  recruitment  of  more  than  1 200  medical  staff,  including 
nurses and other categories. Alongside workforce capacity, physical infrastructure was 
expanded  too.  As  of  early  October,  941  intensive  care  beds  are  operational,  of  which 
272  dedicated  to  the  treatment  of  coronavirus  patients,  with  a  target  to  reach  the  EU 
average of 1 200 by the end of the year. In terms of prevention, the authorities started 
influenza vaccinations in mid-October. 

Clawbacks are still high but steps are being taken to improve their collection and 
to curb the generation of new ones. The authorities adopted legislation to complete the 
collection of the 2019 clawback for the pharmaceuticals and to start the collection of the 
providers’  clawback  for  the  years  2018  and  2019 (30),  which  remains  entirely 
uncollected so far. The timelines implied for the completion of the collection under the 
proposed schemes are considerably longer than those originally envisaged, but this may 

(30) A  repayment  plan  based  on  120  monthly  instalments  enabling  the  collection  of  the  2013-2019 
clawback  for  providers  was  legislated  with  MD  FEK  4613/19.10.2020.  For  pharmaceuticals,  a 
repayment plan based on 36 instalments was legislated with Ministerial Decision KAD54221 

25 

                                                 
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Chapter 5 - Social welfare 

have  been  affected  by  the  difficulties  linked  with  to  the  pandemic.  The  issue  of 
inefficient spending, largely due to supply-driven overconsumption, persists, increasing 
the financial burden of patients. To tackle this, the authorities focus on measures that are 
mostly  incremental,  such  as  additional  therapeutic  protocols  and  stepped-up  efforts  in 
negotiation,  many  being  continuations  of  already  existing  strategies  that  have  so  far 
been only moderately effective due to weaknesses in implementation and discontinuity 
of policies. The elimination of the vaccines from the clawback ceiling, the planned shift 
of public coverage of medicines for the uninsured (31) outside the budget of the National 
Organisation  for  the  Provision  of  Healthcare  Services  (EOPYY)  and  a  more  precise 
identification of spending for non-permanent residents through social security numbers 
represent  elements  of  novelty.  As  stressed  by  the  authorities,  the  latter  does  not 
correspond  to  any  change  in  the  coverage  of  the  uninsured  and  aims  at  a  better 
identification of spending for non-permanent residents (32). However, at present, no plan 
is envisaged to include an element of risk sharing in the definition of the clawback (such 
as  a  cap  to  the  clawed  back  amounts),  the  lack  of  which  represents  a  weakness  in  its 
potential  to  effectively  curb  excess  spending  from  a  structural,  rather  than  just  fiscal, 
point of view. 

Centralised  procurement  of  30%  of  the  total  hospital  expenditure  by  the  first 
quarter  of  2021  and  of  40%  by  mid-2022,  a  mid-2022  specific  commitment,  is 
moving  forward,  despite  the  current  situation.  The  authorities  are  progressing 
towards the implementation of centralised procurement, with the intermediate target of 
30%  of  the  budget  (approximately  €305 million)  to  be  centrally  procured  by  the  first 
quarter  of  2021.  This  target  is  considered  to  be  achievable,  and  it  is  reported  that 
reaching  the  target  of  40%  by  mid-2022  also  remains  achievable.  Equally,  the 
reactivation of the price observatory by January 2021 is in the pipeline. The draft law on 
the new legal status of the National Central Authority of Health Procurements (EKAPY) 
is due for adoption by the end of the year. Staffing is still critically low, especially in the 
key  departments  in  charge  of  tenders,  which  implies  currently  limited  capacity  and 
raises concerns regarding set targets. To tackle this, the authorities have expanded fixed 
term  appointments  in  of  the  Central  Authority.  Meanwhile,  a  new  president  has  been 
appointed, following the departure of his predecessor shortly after inception. 

The implementation of a fully-fledged and effective primary health care, which is a 
specific  commitment,  is  proving  a  key  element  to  deal  with  the pandemic.  So  far, 
161 health centres were activated and can receive patients with coronavirus symptoms, 
which is key to limit unnecessary contact and patient exposure. Meanwhile, additional 
outpatient clinics were set up in the area of Athens and capacity for quarantine has been 
created making use of hotel infrastructure. Concerning the roll-out of the primary health 
care reform, the authorities are currently not fully implementing the 2017 reform (while 

(31) This  refers  to  citizens  who  either  don’t  have  health  care  coverage,  neither  directly  nor  through  a 
spouse or have lost it due to, typically long-term, unemployment. This group represents a high share 
of  the  population  as,  according  to  available  estimates,  they  had  been  estimated  to  be  around 
2.5 million in 2014. 

(32) As a result, the authorities expect approximately a €500 million reduction in the amount clawed back 
from the industry, but only €100 million (from price negotiations of new drugs) will represent a real 
saving.  The  other  part  of  the  reduction  in  the  amount  the  industry  needs  to  pay  back  (estimated  at 
€200 million from vaccines and €300 million from the exclusion of the uninsured) have to be covered 
by other public budget lines. 

26 

                                                 
Commission Staff Working Document -  

Chapter 5 - Social welfare 

formally,  the  legislation  remains  in  place).  The  intention  to  reinstate  the  ‘fee-for–
service’  system  that  existed  before  the  2017  reform,  aiming  at  reconstituting  the  full 
stock of family doctors of the National Organisation EOPYY by re-attracting those who 
had dropped out and opted for a private regime has been put on hold. While beneficial 
in  expanding  the  number  of  public  (contracted)  staff  providing  family  medicine,  this 
system may have hindered access for the vulnerable groups, as the budget for the fee-
for-service system is likely to be exhausted over a few weeks and patients would need 
to  pay  extra  to  access  services (33).  Instead,  the  authorities  are  about  to  launch  a  third 
call  to  staff  the  existing  primary  health  care  units  (TOMYs).  In  the  short  term,  the 
authorities plan to extend patient registration through the health care centres, that under 
the current plan complement/integrate the network of primary health care units and they 
opted  for  a  simplification  of  the  registration  procedure.  Rather  than  compulsory 
registration,  the  authorities  currently  envisage  a  system  based  on  patients’  consent, 
where patients can choose within a network of providers. While granting patients wider 
choice,  this  option  has  risks  as  it  allows  patients  to  duplicate  visits  with  a  view  to 
getting  the  best  prescription/referral.  To  counter  this  risk,  the  authorities  intend  to 
exploit the potential of the e-medical  record, which they deem  as a key component of 
the new system, although not fully implemented or functional as of now and currently 
planned by mid-December. Based on the latest reports, the plan is to implement a soft 
version  of  gatekeeping  based  on  incentives.  The  authorities  committed  to  the 
finalisation of the revisions to the legal framework by the time of the publication of the 
tenth enhanced surveillance report due in mid-2021. 

5.3.  SOCIAL SAFETY NETS 

Overall, the implementation of social welfare reforms is progressing according to 
the  agreed  timelines.  For  what  concerns  transport  subsidies,  a  mid-2020  specific 
commitment,  the  secondary  legislation  to  allow  a  regular  and  objectively-based 
reimbursement  of  subsidised  public  transport  tickets  for  vulnerable  groups  including 
disabled  persons  and  members  of  large  families  has  been  adopted  in  October  2020, 
while the secondary legislation setting compensation levels for main transport operators 
is under preparation. Regarding the review of disability benefits, a policy paper is being 
finalised outlining the development of the new disability assessment process, and a pilot 
project is to be launched in March 2021. The guaranteed minimum income scheme, the 
reformed  family  benefit  and  the  housing  benefit  continue  to  play  an  important  role  in 
protecting  households’  incomes.  Expenditure  on  these  benefits  is  expected  to  increase 
substantially in 2021, as the effects of the pandemic are reflected in the 2020 income tax 
declarations.  

There  has  been  little  progress,  however,  with  respect  to  the  provision  of  labour 
market  reintegration  services  for  the  beneficiaries  of  social  assistance.  The 
Guaranteed  Minimum  Income  scheme  should  combine  passive  income  support  (first 
pillar)  with  the  provision  of  social  services  (second  pillar)  and  labour  market 
reintegration services (third pillar). This requires, in particular, establishing appropriate 
interconnections between the benefit-paying institution, the local social services and the 

(33) Indeed,  this  system  replaces  the  capitation  system  with  minimum  of  weekly  hours  with  a  fee-for 
service combined with a maximum number of 200 visits per month reimbursed as part of the public 
regime. 

27 

                                                 
Commission Staff Working Document -  

Chapter 5 - Social welfare 

public employment service (OAED), as well as enhancing the capacity of  the latter to 
deliver adequate services to jobseekers. During 2019, a pilot project was implemented 
to  test  the  procedures  for  providing  labour  market  activation  services  to  Guaranteed 
Minimum  Income  beneficiaries.  The  pilot  project  was  evaluated  at  the  beginning  of 
2020, and its findings should have guided the national implementation that should have 
taken place in 2020. The process stalled following the coronavirus outbreak, however, 
and the national rollout that was expected to begin in the autumn of 2020 has not taken 
place. According to a revised timeline, the national roll-out is now scheduled to begin in 
April  2021,  after  completion  of  the  key  preparatory  steps.  In  particular,  the  new 
business  processes  ensuring  effective  cooperation  and  communication  between  the 
various 
technical  adjustments  and 
interconnection of the respective  IT platforms  should  be completed by  March 2021 at 
the latest. 

implementing  bodies  and 

the  necessary 

28 

 
6. 

FINANCIAL SECTOR 

6.1.  FINANCIAL SECTOR DEVELOPMENTS 

Liquidity and cost of funding in the banking sector 

The  accommodative  monetary  policy  conditions  have  allowed  Greek  banks  to 
benefit from favourable liquidity conditions at a low cost of funding. The temporary 
relaxation of collateral requirements for Eurosystem credit operations and conditions for 
targeted  longer-term  refinancing  operations  have  led  to  a  sharp  increase  in  the  use  of 
Eurosystem funding by banks, which rose from €7.6 billion end-February to €39 billion 
end-September 2020. This has allowed banks to increase their cash buffers. Deposits in 
Greek banks exhibit an upward trend since March, despite a general decline in deposit 
rates.  The  trend  was  mainly  bolstered  by  deposits  from  the  private  sector,  driven  by 
corporates seeking to  accumulate liquidity  amidst  the pandemic and underpinned by  a 
less pronounced but steady upward trend in household deposits. Together, Eurosystem 
funding  and  private  sector  deposits  have  allowed  liquidity  conditions  to  remain 
favourable.  As  a  result,  the  four  Greek  systemic  institutions  have  reached  a  liquidity 
coverage  ratio  higher  than  100%.  With  respect  to  the  cost  of  long-term  unsecured 
borrowing,  although the  yields  are still elevated,  it is  gradually  returning  to  the levels 
seen prior to the pandemic. One Greek bank recently tapped the market with an issuance 
of €500 million of the first ever six-year green senior bond at a yield of 2.9%. 

Graph 6.1:  Bank deposits (left) and total borrowing from the Eurosystem (right) 

(1) MFIs: Monetary Financial Institutions; HH: Households; NFC: Non Financial Corporations. 
Source: European Central Bank, International Monetary Fund. 

Profitability and capital  

The  economic effects of the coronavirus are  expected to  continue to  put pressure 
on  banks’  already  low  profitability,  through  lower  net  interest  income  and  high 
loan  loss  provisions,  particularly  if  demand  for  corporate  credit  weakens  next 
year.  In  the  first  half  of  2020,  recurring  operations  continued  to  generate  one  of  the 
lowest  returns on  equity in  the euro  area, as increasing  provisions due to a worsening 
macroeconomic environment took their toll on profits. Moreover, securitisation of non-

29 

0501001502002503003504001011121314151617181920MFIsHHNFCCentral Governmentbillion EUR0204060801001201401601800510152025303540455008101214161820ECB liquidity as % of liabilities (rhs)Borrowing from the ECBbillion EUR %   
Commission Staff Working Document -  

Chapter 6 – Financial sector 

performing  loans  and  non-performing  loans  inflows,  which  demand  high  loan  loss 
provisions, are expected to have a major impact on banks’ profitability. Securitisations, 
despite their positive impact on the banks’ cost-of-risk, will not only result in an initial 
one-off capital loss but also a recurring loss on net interest income in case of loan de-
recognition. Going forward, it is doubtful that the reduced funding cost and the expected 
income from new loans may fully offset this effect in the short run, particularly if new 
corporate loan volumes fall short of expectations next year. 

Low  profitability,  coupled  with  the  cost  of  upcoming  securitisations  and  the 
gradual phasing out of transitional prudential arrangements may pose challenges 
for  the  banks’  capital  position,  while  reliance  on  state-related  assets  is  set  to 
increase. Banks’ average Common Equity Tier 1 ratio on a consolidated basis stood at 
14.7%  of  risk-weighted  assets  at  the  end  of  June  2020,  above  the  minimum  capital 
requirements. However, banks’ capital position is impacted in the short to medium-term 
by (i) the capital cost of the upcoming non-performing loan securitisations, (ii) the new 
rules  on  the  treatment  of  own  funds  held  under  Pillar II  Guidance (34)  and  (iii)  the 
expected  phasing  out  of  transitional  prudential  arrangements (35).  Moreover,  these 
capital expenses will push up substantially the already high share of deferred tax credits 
in the banks’ Common Equity Tier 1 capital (€15.4 billion or 60.4% as of June 2020). 
At the same time, banks have increased their overall sovereign bond holdings in the first 
half of 2020, in an effort to boost their trading gains. Together with the retained senior 
notes  of  the  securitisations  benefiting  from  the  guarantee  under  the  Hercules  asset 
protection scheme, this implies a tighter sovereign-bank linkage.  

Table 6.1:  Main financial stability indicators 

(1)As % of total loans. 
(2)Annualised data. 
Source: ECB - CBD2 - Consolidated Banking data; own calculations. 

Asset quality trends and non-performing loans deleveraging 

The reduction of non-performing loans continued in the first half of 2020, albeit at 
a slower pace than earlier, while the banks’ internal capacity to restructure loans 
viably remains a challenge. The gradual downward path in non-performing loans was 

(34) From January 2021, banks' own funds held under Pillar II Guidance will no longer be eligible to meet 

any other regulatory requirement. 

(35) These  transitional  arrangements  refer  to  the  phasing  in  of  the  new  accounting  standards  on 
impairments of  financial assets and the implementation of  new rules leading banks to  more quickly 
write down non-performing exposures, according to Regulation (EU) 2019/630 amending Regulation 
(EU)  No  575/2013  and  relevant  supervisory  guidance.  In  the  medium-term,  banks  will  also  need  to 
issue bail-in-able debt to meet the minimum requirement for own funds and eligible liabilities. 

30 

20142015201620172018201820182018201920192019201920202020Q4Q4Q4Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Non-performing loans (1)39.746.846.345.045.444.943.541.641.639.637.835.534.430.9o/w foreign entities--------------o/w NFC & HH sectors41.849.550.449.449.248.447.346.345.643.842.340.640.037.0o/w NFC sector44.752.553.951.451.149.447.946.144.542.840.538.237.133.3o/w HH sector38.545.946.347.147.047.346.646.546.845.144.443.543.441.5Coverage ratio43.548.548.246.749.549.047.848.047.746.745.044.544.944.3Return on equity (2)-10.6-24.2-7.5-1.30.7-2.4-0.8-0.41.62.62.90.71.3-6.6Return on assets (2)-1.0-2.8-0.9-0.20.1-0.3-0.1-0.10.20.30.40.10.1-0.7Total capital ratio14.116.517.017.116.416.416.316.015.616.516.917.016.216.4CET 1 ratio13.816.316.917.015.815.815.715.314.915.615.915.914.614.7Tier 1 ratio13.816.316.917.015.815.815.715.314.915.615.915.914.614.7Loan to deposit ratio79.172.375.983.578.878.476.074.775.874.376.874.872.867.2 
   
 
                                                 
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Chapter 6 – Financial sector 

less  pronounced  in  the  second  quarter  of  2020  compared  to  the  previous  quarter  and 
2019,  with  non-performing  loans  dropping  by  €1.2 billion (36),  reaching  €59.7 billion. 
As a result, the share of non-performing loans to total customer loans fell to 36.7% at 
the  end  of  June  2020 (37),  remaining  the  highest  in  the  euro  area.  At  the  same  time, 
write-offs and a sharp reduction in the default rate due to the moratoria in place have led 
on average to a lower amount of newly created non-performing loans compared to the 
amount of ‘cured’ non-performing loans, i.e. the rate of non-performing loans for which 
repayments have re-started. This has offset the fall in liquidations due to court closures 
and  auction  suspensions,  as  well  as  the  banks’  limited  organic  non-performing  loan 
reduction through effective loan restructuring.  

Graph 6.2:  Non-performing loans as a % of total customer loans (left) and changes in their stock 

in the second quarter of 2020 (right: million EUR)  

(1) NPEs: Non-performing exposures. 
Source: Bank of Greece. 

Debt  payment  moratoria,  coupled  with  the  temporary  supervisory  flexibility  in 
place, have been instrumental so far in shielding the banks’ balance sheet from the 
impact of the pandemic on the credit risk of their loan book. However, banks have 
to prepare for a possible cliff effect when these measures expire. According to the data 
submitted by the Greek systemic banks as of 30 September 2020, €20.2 billion of loans 
have been covered by the non-legislative moratoria in place by servicers and banks for 
debtors  affected  by  the  coronavirus  outbreak (38).  This  amount  represents  more  than 
12% of the banks’ domestic loan portfolio, with €10.9 billion granted to households and 
€9.3 billion  to  businesses.  The  moratoria  have  mitigated  so  far  the  impact  of  the 
pandemic  on  the  banks’  asset  quality,  as  supervisory  guidance  allowed  public  and 
private  moratoria  announced  and  applied  before  30 September  2020  not  to  be 
automatically  classified  as  forbearance  measures (39).  However,  the  large  share  of  the 

(36) Source: Bank of Greece, solo level. As a result, it does not include the securitisation of a €7.5 billion 
portfolio  of  mainly  non-performing  exposures,  which  was  already  reflected  at  solo  level  in  the 
previous quarter. 

(37) Source: Bank of Greece, solo level. 
(38) Source: Bank of Greece, data at solo level. The moratoria in place by servicers and banks for debtors 
affected by the coronavirus outbreak have been recently extended until end-December 2020 and apply 
to principal payments for businesses and principal and interest for natural persons. 

(39) The criteria published by the European Banking Authority allow public and private  moratoria not to 
be  automatically  classified  as  forbearance  measures  for  the  purposes  of  the  International  Financial 
Reporting Standard 9 and the definition of default. 

31 

303540455055606570Dec 2014Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019% NPL ratio (1)Consumer LoansResidential LoansBusiness Loans60 9027451 0373010287231126553159 694 010 00020 00030 00040 00050 00060 00070 000  
                                                 
Commission Staff Working Document -  

Chapter 6 – Financial sector 

performing  loan  book  under  moratoria  points  to  a  significant  risk  of  future  loan 
reclassifications to non-performing status, leading to increased provisioning needs and 
deteriorating asset quality ratios when moratoria expire. 

Banks have started  to  adjust their non-performing loans  reduction  strategies  but 
loan loss provisions booked so far might only partially capture the eventual effect 
of  the  pandemic  on  banks’  asset  quality.  The  banks,  in  cooperation  with  the 
supervisory  authorities,  are  revising  their  non-performing  loan  strategies,  taking  into 
account the coronavirus impact and their own corporate transformation plans i.e. ‘hive 
downs’ (40).  These  interim  strategies  will  be  further  refined  and  re-submitted  to  the 
supervisor  at  the  end  of  March  2021,  as  requested  by  the  supervisor  for  all  euro-area 
banks.  Moreover,  in  line  with  supervisory  expectations  communicated  to  euro-area 
banks, Greek banks are in the process of identifying and monitoring high-risk pockets 
within  their  loan  book.  The  aim  is  to  identify  and  address  credit  risk  and  facilitate  a 
gradual  return  to  normal  loan  instalment  levels  in  2021  for  viable  borrowers.  Banks 
have increased their provisioning, particularly in the first quarter of 2020, to reflect the 
deteriorating macroeconomic projections. However, they have not incorporated a loan-
specific analysis of the potential increase in credit risk or migration to non-performing 
loan  status  after  the  expiry  of  the  moratoria,  which  implies  a  downside  risk  for  2021 
credit provisioning and profit projections.  

A  key  element  of  the  banks’  strategy  to  tackle  non-performing  loans  remains  to 
move ahead with delayed securitisations under the Hercules scheme. One systemic 
bank has recently concluded the first transaction under the scheme (41), while the other 
three systemic banks, after a brief pause due to the pandemic, are now advancing with 
the  securitisations,  which  are  expected  to  be  concluded  in  the  first  half  of  2021.  The 
result  of  these  planned  transactions  will  be  a  significant  reduction  in  non-performing 
loans  and  an  erosion  of  available  capital  buffers.  However,  even  in  the  case  of  a 
successful  implementation  of  all  planned  securitisations,  the  average  non-performing 
loan  ratio  of  Greek  banks  will  remain  in  double-digit  levels  and  well  above  the  EU 
average both as an absolute amount and as a share of total loans. The risk of higher non-
performing loan inflows due to the pandemic, combined with the potential capital cost 
of  further  securitisations,  points  to  a  need  for  complementary,  potentially  systemic 
solutions, that facilitate the resolution of non-performing loans. 

Financing of the economy 

The authorities successfully implemented or extended support measures to sustain 
access  to  finance  for  coronavirus  affected  businesses.  The  Hellenic  Development 
Bank  has  launched  two  schemes,  which  appear  to  be  successful  in  supporting  bank 

(40) Under the hive-down process, the initial entity will transfer its banking business, including all deferred 
tax credits, to an operating company, which will be a licensed credit institution and 100% subsidiary 
of the original entity, which will become a holding company without a banking licence. 

(41) The transaction involved securitizing a €7.5 billion portfolio of mainly non-performing exposures. It 
made use of €2.4 billion of state guarantees out of the total €12 billion envelope available under the 
Hercules  scheme.  The  scheme,  which  is  open  and  voluntary  for  all  banks,  runs  over  an  18-month 
period from October 2019. 

32 

                                                 
Commission Staff Working Document -  

Chapter 6 – Financial sector 

credit. The first one is a guarantee scheme (42), under which €3.4 billion of loans have 
been  approved  until  end-August,  with  actual  disbursements  reaching  €2 billion.  The 
scheme  is  now  rolling  out  its  second  tranche  of  €780 million  of  guarantees,  primarily 
targeted  to  small  and  medium-sized  enterprises  and  aiming  to  leverage  an  additional 
€2.5 billion of loans. The second scheme, called TEPIX II, is offering co-financing and 
interest  subsidy  for  new  corporate  loans (43)  and  has  mobilised  over  the  same  period 
another €1.8 billion of approved loans, with €1.5 billion of disbursements. This scheme 
was expanded by an additional €180 million, aiming to leverage about €0.8-1 billion of 
new loans, starting from October 2020 (44).  

State  support  measures  reinforce  the  increase  in  bank  credit  to  large  corporates 
and,  more  recently,  small  and  medium-sized  enterprises,  while  bank  credit  to 
households is contracting at a slower pace. The net average monthly flow of credit in 
Greece  to  non-financial  corporations  has  increased  from  €110 million  in  2019  to 
€723 million in the period March to September 2020, with a corresponding increase in 
gross loan flows. This trend has accelerated significantly in July-September on the back 
of  disbursements  of  the  two  schemes  by  Hellenic  Development  Bank,  without  any 
apparent  crowding  out  of  normal  bank  lending  flows  to  corporates.  As  a  result,  in 
September 2020, the annual rate of growth in bank credit to non-financial corporations 
reached 8.3%, posting for the third consecutive month the highest value attained since 
mid-2009  (see  graph  6.3).  Although  most  of  this  credit  growth  is  directed  to  large 
corporates, there has also been a pick-up in net credit flows to small and medium-sized 
enterprises.  The  annual  growth  rate  of  household  loans  remained  negative  but  has 
gradually improved relative to its recent low point in April 2020, standing at  -2.5% in 
September  2020.  This  milder  decline  is  due  to  a  return  to  positive  monthly  net  credit 
flows in consumer credit and other lending, particularly to owners of non-incorporated 
businesses.  By  contrast,  mortgage  lending  has  continued  to  contract,  albeit  at  a  more 
moderate pace relative to recent quarters.  

Graph 6.3:  Bank credit to non-financial corporations and households, annual % change 

Source: Bank of Greece. 

(42) The “COVID-19 Enterprise Guarantee Fund”, is a capped Portfolio Guarantee scheme. The guarantee 
rate is set at 80% per loan, with a cap rate set at portfolio level for its two distinct sub-portfolios, one 
for small and medium-sized enterprises (cap rate 40%) and one for large enterprises (cap rate 30%). 
(43) “TEPIX  II”  is  a  co-financing  loan  fund  offering  a  2-year  interest  grace  period,  with  TEPIX  II  co-

financing the capital of a loan by 40% and the relevant bank by 60%. 

(44) The increase in the financing envelope will be accompanied by a change in the co-financing shares, 

from 40% to 5% for the Hellenic Development Bank and from 60% to 95% for the banks. 

33 

Sep 2020-2.5%Sep 20208.3%-6-4-2024682011201220132014201520162017201820192020%HouseholdsΝοn-financial corporationsSep 2020-2.8%Sep 2020-1.6%-7-6-5-4-3-2-102011201220132014201520162017201820192020%Housing loansConsumer loans   
                                                 
Commission Staff Working Document -  

Chapter 6 – Financial sector 

Nominal lending rates continued their downward trend, stabilising near historical 
lows  for  non-financial  corporations.  The  average  nominal  lending  rate  for  non-
financial corporations in the first nine months of 2020 has been 3.2% compared to 3.9% 
in 2019 (see graph 6.4), with a similar trend over all loan sizes, as a result of the very 
accommodative monetary policy, as well as the various state support schemes for credit 
to  households  and  firms.  On  the  other  hand,  the  average  nominal  lending  rate  for 
household  credit  has  only  marginally  declined  in  the  first  nine  months  of  2020  and 
remains at significantly higher levels than for corporate credit.  

Graph 6.4:  Bank interest rates of new loans to euro area residents, annual percentages, weighted 

averages 

Source: Bank of Greece. 

6.2.  FINANCIAL SECTOR POLICIES 

Following  the  adoption  of  the  insolvency  framework  reform,  the  authorities  are 
now focusing on its swift implementation, having introduced legal amendments to 
accelerate  the  clearance  of  the  household  insolvency  backlog  and  improve  the 
effectiveness  of  e-auctions.  The  swift  implementation  of  these  measures  will  provide 
banks  with  new  tools  to  tackle  legacy  non-performing  loans  and  the  new  challenges 
implied  by  the  coronavirus  pandemic  for  the  banks’  asset  quality  and  for  the 
accumulation of private debt in the economy as a whole. Further reforms, which are in 
the  pipeline,  aim  to  improve  the  Code  of  Civil  Procedure  and  the  efficiency  of  the  e-
auctions framework and should further support a reduction in the cost of credit during 
the  recovery,  while  contributing  to  lower  non-performing  loan  inflows.  The  actions 
outlined below are monitored and assessed under the enhanced surveillance framework, 
as part of the continuous specific commitment to “continue to implement reforms aimed 
at  restoring  the health of  the banking  system, including  resolution  efforts for  the non-
performing loans”. 

34 

Sep 20202.8 %Sep 20204.9%012345678%Loans to non-financial corporationsLoans to households   
Commission Staff Working Document -  

Chapter 6 – Financial sector 

the  secondary 

legislation  and 

Insolvency law reform 
In  view  of  the  upcoming  entry  into  force  of  the  new  Insolvency  Code (45),  the 
authorities  are  preparing 
the  necessary 
infrastructure.  The  code foresees  the adoption  of at  least  53  administrative decisions 
(mostly  ministerial  and  joint  ministerial  decisions),  which  are  instrumental  for  the 
implementation  of  the  framework.  The  authorities  intend  to  proceed  incrementally, 
aiming  at  completion  of  the  process  by  the  end  of  December  2020.  Work  on  the 
ministerial  decisions  on  the  loan  subsidy,  sale  and  leaseback  mechanism  and  the 
algorithm  for  the  computation  of  restructuring  proposals  is  proceeding  and  the 
authorities  intend  to  share  advanced  draft  texts  with  the  European  institutions  by 
15 November  2020.  The  authorities  are  aiming  at  having  the  electronic  platform  that 
will  underpin  the  implementation  of  the  procedures  stipulated  by  the  code  in  working 
order  by  the  end  of  November  2020,  so  that  it  may  be  used  in  the  context  of  the 
provision  of  training  to  magistrates,  courts’  clerical  staff  and  legal  stakeholders, 
scheduled to take place in December 2020. 

The new insolvency framework is an important step forward and its effectiveness 
will depend on the quality of its implementation. The implementation of the new out-
of-court workout (OCW) mechanism for restructuring debt should be closely monitored, 
especially  with  regard  to  its  prudential  aspects  and  its  potential  impact  on  payment 
culture, as well as the capacity of credit institutions to perform in a timely manner the 
relevant due diligence for the applications received under the scheme. The focus should 
be  to  ensure  that  the  incentives  provided  to  debtors  and  creditors  (of  both  public  and 
private sector) are well balanced and to establish whether the restructurings achieved via 
the  mechanism  are  viable  in  the  medium-  and  long-term.  Moreover,  the  fiscal  and 
financial  effects  of  the  new  sale-and-lease-back  scheme  and  the  shorter  pre-discharge 
period  of  one  year  envisaged  under  certain  conditions,  related  to  the  composition  and 
value of the bankruptcy estate, should be followed-up closely. It is crucial that the entire 
legal framework, including secondary legislation, as well as the necessary infrastructure 
are in place in time for the new Insolvency Code’s entry into force, so as to ensure the 
successful operationalisation of the new framework and avert any unintended negative 
effects on the financial sector and payment culture in general. 

In  view  of  its  low  take-up,  the  authorities  extended  the  deadline for  applying  for 
the temporary instalment subsidy scheme for debtors affected by the coronavirus 
outbreak  by  a  month,  following  consultation  with  the  European  institutions. 
According  to  the  latest  data  provided  by  the  authorities,  take-up  was  lower  than 
expected  throughout  the  period  up  to  end-October  2020,  with  a  total  of  160 467 
submitted applications against an estimate of 300 000 applications. As the extension is 
only  for  a  short  period,  the  authorities  do  not  expect  it  to  affect  their  projections 
materially  as  to  its  fiscal  impact.  It  is  important  that  all  applications  are  assessed  and 
fully processed by the time the subsidies are envisaged to start. 

(45) Law 4738/2020, OJ A 207/27 October 2020. 

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Clearing the backlog of household insolvency cases 
The authorities have adopted a set of new provisions (46) to enable the processing 
of  long-standing  backlogs,  whose  success  is  dependent  on  effectively  addressing 
staff  shortages  and  infrastructure  challenges.  The  law  stipulates  a  fixed  time 
schedule  for  the  replacement  of  distant  hearing  dates  by  dates  close  to  the  present. 
Given  that  the  implementation  will  be  carried  out  in  accordance  with  the  internal 
regulations of individual courts, and will thus be subject to compliance with stipulations 
on  the  number  of  available  dockets  and  the  maximum  number  of  cases  that  may  be 
assigned per judge, it will be up to  the administrative councils of the  courts to  design 
and  take  the  relevant  measures  in  order  to  maximise  the  processing  capacity  of  the 
latter. The authorities anticipate that the rescheduling of dates and the submission of all 
relevant  documentation  and written  arguments by  the parties  will  have taken place by 
15 September  2021.  This  would  allow  for  the  hearings  to  take  place  by  the  end  of 
October  2021,  and  for  the  decisions  to  be  issued  within  the  mandatory  six-month 
deadline,  i.e.  by  the  end  of  April  2022.  Close  monitoring  of  the  implementation  is 
therefore warranted, especially in courts that have accumulated a significant backlog, to 
assess  whether  additional  measures  will  be  needed.  Regarding  staff  shortages,  the 
Ministry  of  Justice  is  examining,  jointly  with  judicial  authorities,  the  possibilities  of 
proceeding swiftly to the completion of vacancies by means of internal secondments.  

E-auctions 

The  authorities  have  adopted  the  first  set  of  measures  aimed  at  enhancing  the 
functionality  and  user-friendliness  of  the  e-auctions  platform (47).  As  described  in 
the  previous  report,  the  adopted  measures  provide  for  uploading  to  the  e-auctions 
platform  of  the  property’s  valuation  report  as  well  as  photographs.  Regarding  further 
identified issues, mainly related to the mechanism for adjusting the reserve price and the 
interoperability  of  the  e-auctions  platform  with  other  state  databases,  the  authorities 
confirmed that these would be considered in the context of the Code of Civil Procedure 
review (see below). The authorities confirmed that the revised Code will enter into force 
at the beginning of the next judicial year in September 2021. 

Clearing the backlog of called state guarantees 

The implementation of the agreed plan for the clearance of called state guarantees 
is  on  track,  while  the  backlog  of  called  guarantees  remains  considerable.  The 
examination  and  payment  of  claims  for  the  third  quarter  of  2020  has  accelerated, 
following  the  shortfalls  registered  during  the  lockdown,  and  is  in  line  with  targets  for 
natural persons’ loans and only marginally below target for corporate loans. Following 
the change of the relevant legal framework at the beginning of June, the electronic files 
repository is operational and credit institutions have already uploaded 60 300 loan files 
in  relation  to  claims.  Creditors  are  in  a  position  to  receive  a  protocol  number 
automatically from the system, for each claim submitted. Interoperability with local tax 
offices  is  in  its  testing  phase  and  is  expected  to  enter  in  productive  operation  by 
November. The relocation of the State Guarantees and Capital Movement Directorate to 
its  new  premises  should  also  be  completed  in  November.  Most  importantly,  30 
employees are currently in the process of being recruited and should become operational 

(46) Article 1 of Law 4745/2020, OJ A/6 November 2020. 
(47) Articleσ 29 and 30 of Law 4745/2020, OJ A/6 November 2020. 

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in November. They are expected to work on the basis of concrete performance targets to 
reinforce  the  two  departments  dealing  with  called  state  guaranteed  loans.  These 
important  steps  are  expected  to  ensure  the  envisaged  significant  acceleration  in  the 
clearance of guarantees during the remainder of 2020. 

Other initiatives 

Work on the revision of Code of Civil Procedure is ongoing and is expected to be 
completed,  in  early  2021  –  later  than  initially  foreseen  but  well  in  time  ahead  of 
September 2021, when it is due to enter into force. Following the reconstitution, in 
October  2020,  of  the  law-drafting  committee  and  the  assignment  of  drafting  tasks  to 
sub-committees, the authorities committed to submit a progress report, including on e-
auctions relevant issues, by the end of November 2020. 

A limited amendment  of the primary legislation on deferred tax credits has been 
voted in September to safeguard the loss-absorbing capacity of the banks’ capital 
in all cases, including resolution. Work is ongoing on further technical aspects in the 
form  of  secondary  legislation,  in  order  to  operationalise  all  aspects  of  the  framework, 
including in the context of resolution and special liquidation. 

6.3.  HELLENIC FINANCIAL STABILITY FUND (HFSF) 

The Fund continued its efforts to support the systemic banks in meeting their non-
performing  loans  reduction  and  business  enhancement  goals  in  view  of  the 
challenges brought about by the pandemic. The Fund supported the systemic banks 
in  the  preparation  of  their  updated  non-performing  loan  reduction  plans  until  2022, 
submitted  to  the  Single  Supervisory  Mechanism  in  September.  The  Fund  is  assisting 
two  out  of  the  four  systemic  banks  in  the  preparations  for  their  corporate 
transformations  (hive-down),  to  be  accompanied  by  large-scale  non-performing  loan 
securitisations, which are envisaged to take place in the coming months. The Fund is in 
the  process  of  revisiting  its  shareholder  expectations  by  taking  into  consideration  the 
various  effects  stemming  from  the  pandemic  –  including  the  moratoria  and  its 
consequences on the banks’ profitability, asset quality, capital position and liquidity – as 
well as the banks’ corporate transformations currently being prepared. The divestment 
strategy  of  the  Fund  needs  to  be  finalised  in  the  near  future,  including  the  potential 
involvement of the authorities in the final stage of the divestment, the legal protection 
for  the  governing  bodies  and  staff  of  the  Fund,  and  with  regard  to  the  implications 
stemming from the banks’ corporate transformations. With respect to the revision of the 
Relationship  Framework  Agreements,  that  became  necessary  among  others  due  to  the 
banks’  corporate  transformations,  it  is  important  to  preserve  all  statutory  rights  of  the 
Fund. Preserving the Fund’s independence remains a cornerstone in the process toward 
restoring the health of the banking sector. 

37 

7. 

LABOUR AND PRODUCT MARKETS 

7.1.  LABOUR MARKET 

The  Greek  labour  market  has  proved  particularly  resilient  in  the  wake  of  the 
coronavirus  outbreak,  but  the  extended  duration  of  the  pandemic  poses  serious 
risks in terms of employment. Contrary to the experience of the 2008-2010 crisis, the 
severe contraction in output has not led to extensive job destruction so far. Employment 
levels  declined  mildly  between  February  and  May,  recovering  partially  in  June-July 
with  the  late  start  of  the  summer  holiday  season.  The  initial  fall  in  employment  was 
matched by an increase in inactivity with the unemployment rate actually falling again 
in  July  following  a  temporary  increase  during  April-June.  The  swift  adoption  of 
emergency  measures  aimed  at  supporting  businesses  and  protecting  jobs  (notably, 
emergency income support and job retention schemes) contributed to this result. As the 
pandemic  endures,  however,  restructuring  in  the  most-affected  sectors  may  become 
unavoidable. 

The  government  has  presented  its  proposals  to  modernise  some  aspects  of  the 
labour legislation. These concern in particular: the simplification and modernisation of 
the rules concerning working time and annual leave, including the extension of paternity 
and  parental  leave  and  the  institutionalisation  of  telework,  the  removal  of  any 
distinction  between  blue-collar  workers  and  white-collar  employees  with  respect  to 
employment protection legislation, the introduction of new limits to the reinstatement of 
dismissed employees, the introduction of an obligation for trade unions to be registered, 
and  the  revision  of  the  rights  and  privileges  of  trade  union  members.  These  reform 
proposals are currently under consultation with the social partners. The codification of 
the labour legislation, and end-2020 commitment, has been delayed by the pandemic but 
it is still expected to be adopted by the end of 2020. 

While  active  labour  market  programmes  are  being  reviewed  to  improve  their 
efficiency  and  attractiveness,  the  system  still  suffers  from  capacity  constraints.  A 
well-performing  public  employment  service  and  an  effective  system  of  active  labour 
market policies are needed to deliver effective labour market support to jobseekers and 
help  the  labour  market  reintegration  of  beneficiaries  of  social  assistance  (see  section 
5.3).  The  initial  pilot  project  of  the  new  delivery  model  for  active  labour  market 
policies, implemented in 2018-2020, will be evaluated by the end of 2020. Preliminary 
results have revealed the need to review the module of training programmes. While the 
expansion of the pilot project to several other geographical areas is foreseen in the near 
future,  the  national  rollout  of  the  model  is  not  planned  at  this  stage  due  to  OAED 
capacity constraints and disruptions caused by the pandemic. 

Education 

The  authorities  continue  to  pursue  their  comprehensive  education  policy  plans, 
and this has been reflected in the government’s growth strategy. In particular: 

  The  new  framework  for  the  operation  and  autonomy  of  the  higher  education 
institutions is under preparation and will be completed in the next three months. The 

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Chapter 7 – Labour and product markets 

statute of the university councils will be re-established, whereas the management of 
the higher education institutions will be overseen by the university councils that will 
give directions, approve strategies and budgets, and monitor the administration of the 
universities.  Already  with  previous  legislation,  greater  autonomy  was  given  to  the 
universities  to  manage  their  own  funds,  in  particular  those  related  to  research. 
Another  legislative  act  allowed  the  internationalisation  of  the  universities  and 
restricted  the  role  of  the  ministry  in  developing  education  programmes.  The 
accreditation of degrees is performed by the accreditation agency, the role of which 
was upgraded. 

  The  authorities  have  prepared  the  new  draft  law  on  vocational  education  and 
training, which is expected to be adopted by December 2020. Vocational schools ran 
by the Greek employment agency (OAED) will continue providing training at level 3 
of  the  European  Qualifications  Framework.  Professional  Lyceums  (EPAL)  provide 
education at level 4 and 5 in case of post-school one-year apprenticeships, while the 
Institutes  of  Professional  Training  (IEK),  which  are  both  public  and  private  and 
provide education at level 5, will be enhanced. Model and experimental Professional 
Lyceums  and  Institutes  of  Professional  Training  will  be  created  and  will  start 
operating  in  the  academic  year  2021-22,  in  line  with  regional  labour  needs.  The 
vocational education and training reform will be fully deployed within a horizon of 
four years. 

  Following the introduction of internal evaluation of school units, reforms in school 
education  are  giving  a  particular  emphasis  to  soft  skills,  such  as  social  empathy, 
human  rights,  volunteering,  environmental  protection,  creative  thinking,  and  road 
safety. The enhancement of digital skills for both, teachers and pupils, is a priority of 
the current reform efforts. Foreign language teaching has also increased and teaching 
of English language was introduced for the first time in nursery schools. During the 
current academic year, the evaluations of school units apply for the first time, starting 
with  setting  the  objectives  in  October.  The  authorities  are  planning  to  extend  the 
evaluation to teachers in the academic year 2021-22. This is a major step forward as 
they faced a strong resistance in the past. 

7.2.  PRODUCT MARKETS AND COMPETITIVENESS 

The  authorities  are  advancing  with  most  specific  commitments  under  investment 
licensing  and  remain  committed  to  implementing  a  widened  reform  agenda.  All 
reform areas continue to benefit from technical support provided through the European 
Commission and delivered by the World Bank. Specifically, the authorities are expected 
to  submit  for  public  consultation  a  bill  to  simplify  licensing  procedures  in  most 
remaining sectors of the economy by end-November. They  also  set  concrete timelines 
for the remaining work, specifically to  simplify investment  licensing procedures in  all 
remaining  sectors  by  mid-2021,  and  to  implement  the  inspections  framework  fully  by 
April 2021. The successful completion of the remaining work critically depends on the 
timely inputs by all ministries involved and the commitment of all stakeholders. 

  Good progress is recorded as regards the simplification of the investment licencing 
procedures  in  the  agreed  remaining  sectors,  a  mid-2020  specific  commitment.  The 

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Chapter 7 – Labour and product markets 

remaining work will be completed by mid-2021. Following the adoption of primary 
legislation  on  the  primary  production  sector  in  July  2020,  the  authorities  are 
proceeding  with  relevant  secondary  legislation,  with  a  view  to  fully  adopting  it 
shortly. Further, by end-November, they aim to submit for public consultation a bill 
that will simplify most of the remaining sectors (48) by reducing requirements and the 
extent of ex-ante control currently imposed on businesses. Secondary legislation on 
these  will  be  adopted  by  April  2021,  along  with  primary  legislation  on  the 
simplification of the activities that remain. The commitment is expected to be fully 
completed by mid-2021, with the adoption of secondary legislation on the latter. In 
parallel,  the  authorities  continue  to  simplify  and  fine-tune  areas  related  to  sectors 
already  reformed,  assisted  by  ongoing  technical  support  provided  through  the 
European Commission. 

  The starting tools concerning the implementation of the inspections framework law, 
a  mid-2020  specific  commitment,  are  almost  complete  in  the  agreed  priority 
inspection areas (49) but further actions on enforcement and compliance are required 
for  the new framework to  be fully operational.  Specifically, the relevant  checklists, 
risk assessment framework and complain management system are either finalised or 
at  a  mature  stage  and  are  all  expected  to  be  set  fully  in  practice  without  delay,  in 
tandem  with  the  full  roll-out  of  training.  The  last  remaining  elements  in  the  said 
areas,  namely  the  enforcement  management  model  and  the  amendment  of  the 
legislation  on  sanctions,  along  with  some  remaining  enabling  legislation,  will  be 
developed  by  April  2021,  after  a  period  of  testing  of  the  new  framework.  In  the 
meantime, the authorities began work on the extension of this framework to the four 
remaining  areas (50) by  end-2021, starting with  consumer protection and health and 
safety of workers, as per the action plan they prepared. Lastly, the authorities drafted 
provisions to  define  the  roles  and  responsibilities  of  inspecting  authorities  for 
environmental  protection  with  a  view  to  adopting  these  shortly,  which  is  key  to 
avoiding overlaps. Respective provisions for food safety are at a less advanced stage. 

  The  full  deployment  of  the  relevant  IT  system  to  support  the  investment  licensing 
framework, originally an end-2019 specific commitment, continues to be delayed by 
further  complications  in  the  tender  process.  Given  that  ongoing  legal  uncertainties 
pose a major risk to the implementation of the reform as a whole, the consideration 
of  all  available  interim  technical  solutions  and  securing  the  appropriate  financial 
resources would be instrumental with a view to enabling the piloting of at least some 
inspections  and  licensing  functionalities  –  beyond  notifications.  Meanwhile,  the 
authorities proceeded with the mapping and gap analysis of IT systems currently in 
place (51), which is expected to greatly facilitate the work of the contractor once the 
tender is awarded.  

(48) Namely transport and transport-related activities (sale, repair and maintenance of vehicles), education 
(post-secondary  education,  vocational  training,  life-long  learning,  language  centres),  social  welfare, 
physical well-being, rent of leisure and sport equipment, and amusement sector activities. 

(49) These concern food safety, environmental protection and product safety. 
(50) These  concern  consumer  protection,  safety  and  health  of  workers,  public  health,  and  safety  of 

infrastructures and construction. 

(51) This  work  concerns  the  identification  and  description  of  the  public  sector  ICT  systems  currently 
operational  that  play  a  role  in  approval  and/or  inspection  processes  in  business  activities  and  how 

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Chapter 7 – Labour and product markets 

The  authorities  are  advancing  with  the 
implementation  of  key  business 
environment reforms initiated under the programmes. Draft Presidential Decrees for 
the certification of external environmental assessors -which has been pending since the 
third  programme-  and  for  the  certification  of  external  environmental  inspectors, 
respectively, were prepared with a view to submitting them for approval to the Council 
of State shortly. Other complementary secondary legislation to define payment, training 
and registry issues is also underway. These constitute key steps towards complementing 
scarce  public  resources  with  private  resources  in  environmental  licensing  and 
enforcement  processes,  as  well  as  creating  new  jobs.  Further,  the  authorities  prepared 
amending  provisions  in  the  area  of  tourism (52)  to  improve  the  said  framework  and 
streamline it with the principles of the investment licensing reform, with a view to adopt 
these  by  end-2020,  with  some  delay  as  compared  to  the  original  timeline  which  was 
September  2020.  Nonetheless,  the  administrative  burden  on  producers  and  buyers  of 
milk (53) identified in previous months is yet to be addressed, an action which was due 
by September 2020. 

Along  with  notable  reforms  in  the  frameworks  of  insolvency  and  dispute 
resolution, and upcoming reform in public procurement (see sections 6.2 and 3.4, 
respectively),  the  authorities  are  advancing  on  further  actions  to  improve  the 
competitiveness  of  the  Greek  economy.  In  the  area  of  tax  administration,  the 
authorities  took  measures  to  expedite  the  processing  of  VAT  refunds  and  reduce  the 
backlog of pending applications (54), and introduced the electronic submission of VAT 
refund  claims.  Key  interventions  scheduled  by  March  2021  aim  to  accelerate  the 
issuance  of  building  permits  and  of  business  start-up  procedures,  including  via  the 
interoperability  of  key  registries,  and  reduce  the  requirements  for  obtaining  an 
electricity connection and registering property. Further, with technical support from the 
Commission provided through the World Bank, the authorities plan additional measures 
in key areas, including trading across borders, contract enforcement, protecting minority 
investors,  and  facilitating  access  to  credit.  Fully  capitalising  on  digital  transformation 
initiatives (see section 9.2) would be key to this end.  

The government has taken further steps to reform product markets and improve 
market  surveillance.  In  November,  the  authorities submitted  to  Parliament  a  bill 
introducing  market  regulation  provisions  to  implement  the  relevant  EU  regulation (55) 
concerning  the  functioning  of  online  intermediation  services  to  promote  fairness  and 
transparency for business users in the area of e-commerce, and ensure effective market 
surveillance mechanisms, including to combat illegal trade. In addition, the bill provides 
for and an extension, on a voluntary basis, of Sunday retail trading, allowing small-sized 
local shops in low-population areas to open throughout the year, if certain conditions are 
met,  including  on  opening  hours.  Further,  the  law  also  paves  the  way  for  more 
flexibility for shops in other touristic areas, irrespective of size and population criteria, 

these  could  be  integrated  in  the  new  ICT  system,  as  well  as  the  identification  of  the  administrative 
steps that would need to be captured in the electronic notification process. 

(52) Law 4582/2018 (OJ Α 208/11.12.2018). 
(53) This  refers  to  the  review  of  secondary  legislation  on  measures  to  control  the  milk  market  (Joint 
Ministerial Decision issued by the Ministry of Finance and the Ministry of Agricultural Development 
and Food on 21 March 2019). 

(54) https://www.aade.gr/open-data/vat-ref. 
(55) Regulation (EU) 2019/1150. 

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Chapter 7 – Labour and product markets 

starting on a pilot basis and following consultation with social partners. Similarly, more 
flexibility  is  provided  to  open  markets  that  may  operate  on  a  six-day  basis  per  week, 
including on Sundays.  

the  adoption  of 

Despite  progress  with  setting  up  a  new  strategy  on  promoting  trade  and  foreign 
direct  investment,  institutional  arrangements  remain  incomplete,  which  hampers 
efforts to increase extroversion and leverage Greece’s potential in key sectors and 
export markets. While the new strategy of the Ministry of Foreign Affairs is expected 
to  strengthen  the  country’s  export  potential  and  facilitate  inward  foreign  direct 
investment, it is yet to be published. Moreover, full and effective implementation of this 
strategy  hinges  on 
the  mandate  and 
responsibilities  of  the  Ministry  of  Foreign  Affairs,  which  is  still  pending.  Work  at 
operational  level  faces  delays,  notably  in  terms  of  putting  in  place  the  governance 
structures, the adjustment of the trade facilitation roadmap to reflect new priorities, and 
pursuing further simplification efforts, including at pre-customs level. Meanwhile, work 
is underway with the tendering process of several export promotion projects led by the 
Ministry of Foreign Affairs, while some others have encountered procedural delays due 
to  legal  issues.  The  authorities  are  taking  steps  to  promote  e-commerce  through  a 
number  of  dedicated  IT  platforms,  while  the  tender  for  the  integrated  Single  Window 
system that will automate imports and exports procedures was launched in October. 

legislation  concerning 

Cadastre 

Steady progress has been achieved in the cadastre in the current reporting period; 
however,  the  target  for  completing  the  mapping  for  45%  of  property  rights  has 
been rescheduled to end-2021. The cadastral mapping proper is progressing with 35% 
of  property  rights  completed  by  the  end  of  October,  up  from  33%  achieved  in  May 
2020. The target of 45% coverage is expected to be achieved by December 2021. With a 
view to  accelerating the  collection of the remaining  rights,  a bill  introducing fines for 
late declarations of property rights will be submitted to Parliament in November 2020. 
From  the  remaining  five  cadastral  mapping  contracts,  four  have  been  signed  and  one 
tender 
will  be  signed 
documentation for the digitalisation of the mortgage deeds have been completed and the 
tender is ready to launch, when financing is secured. This project has been identified as 
a potential project to be funded by the Recovery and Resilience Fund.  

technical  specifications  and 

in  December  2020.  The 

The  cadastral  agency  will  also  be  fully  operational  by  end-2021,  in  line  with  the 
road map for the cadastre project. This is later than envisaged under the original mid-
2020 commitment and reflects delays encountered due to the pandemic, but also earlier 
on. The appointment of the management team has been completed and the recruitment 
of the migration team, a team necessary to implement the transition from the mortgage 
offices to the cadastral offices, is progressing smoothly. The Corporate Strategy for the 
operation of the Hellenic Cadastre after the completion of the cadastral mapping and the 
integration  of  the  mortgage  offices  is  under  preparation  and  a  first  draft  will  be 
completed by the end of the year. By October, 14 cadastre offices (out of 92) have been 
established. The set-up of the agency will be fully completed by December 2021.  

Regarding  the  forest  maps,  80%  of  the  remaining  ones  have  been  prepared  by 
October 2020 and will start gradually to be uploaded for public consultation. The 

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Chapter 7 – Labour and product markets 

authorities  committed  to  upload  all  the  remaining  maps  by  December  2020  and  the 
ratification of all forest maps will be completed by July 2021.  

Energy 

A  major  energy  market  reform  was  achieved  as  the  Target  Model,  a  mid-2020 
specific commitment, went live on 1 November, which is a big step towards Greece 
fulfilling  the  obligations  of  the  EU  energy  acquis.  The  new  format  of  the  markets 
with separated day-ahead, intra-day and balancing elements, will allow for better price 
discovery and wider participation and market access of different services – away from a 
‘produce and forget’ system, to one favouring flexibility. It remains to be seen how this 
combines with Greece’s already established – yet currently underused – forward market. 
This  and  the  correct  application  with  the  EU  rules  in  the  new  markets  will  be  closely 
monitored. The new market design is compatible with other EU markets, allowing for 
the  swift  day-ahead  and  intraday  coupling  with  the  neighbouring  markets  of  Italy  and 
Bulgaria, which in turn will increase energy security, support further renewable energy 
sources  integration  and  wholesale  price  competition.  Several  players  are  expected  to 
enter the market on these new terms. Efforts to ensure that distortions in the wholesale 
market are completely removed, and that the market is effectively monitored in view of 
the market power of the incumbent (see below) and is brought fully in line with the EU 
energy  acquis  (e.g.  further  integration  of  demand  response)  will  be  important.  Greece 
received  formal  approval  for  the  Interruptibility  and  Flexibility  schemes  as  bridging 
mechanisms until the necessary reforms take place in the coming months. As the new 
market is further established, these mechanisms will cease to apply within a transitional 
period.  

The authorities submitted on 23 October a final proposal for an anti-trust remedy 
related  to  the  Public  Power  Corporation’s  lignite  generation,  constituting  a  key 
step  towards  fulfilling  this  specific  commitment.  However,  the  Commission  is  still 
waiting for final authorisation from the authorities to start carrying out a market test of 
the proposed remedy, so that the measures can be implemented in the market in 2021. 
The  implementation  of  the  remedy  would  fulfil  the  specific  commitment  and  comply 
with a longstanding ruling by the EU Courts. Considering the very tight timeline for the 
implementation  of  the  remedy,  the  European  Institutions  encourage  the  Greek 
authorities to  cooperate  more effectively during  the next  reporting period. The market 
share of the incumbent stands at 64.3% (56), which marks a continued downward trend, 
but still some distance away from the envisaged 50% market share as set out in national 
legislation. The high voltage sector remains concentrated with the incumbent, although 
some  positive  developments  have  occurred  through  new  entrants  providing  energy 
supply  also  for  this  market  segment.  As  a  number  of  the  Public  Power  Corporation’s 
bilateral contracts with high voltage customers, expires end-2020, it is expected that any 
new contracts will better reflect market conditions and facilitate the liquidity of the new 
electricity market, while providing balanced safeguards for both contracting parties. On 
the  generation  side,  the  energy  national  mix  continued  its  shift  away  from  lignite, 
representing about 10% of the overall energy mix and a 66% drop in overall production 
to a year before. Gas showed the biggest annual growth and continues to represent the 
highest share as energy source.  

(56) Hellenic Energy Exchange ‘Monthly DAS Trading System Report, September 2020’. 

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Chapter 7 – Labour and product markets 

There  are  growing  concerns  in  relation  to  the  Renewable  Energy  Sources 
Account (57) and a sustainable approach is needed to address its structural deficit. 
Given  Greece’s  ambitions  for  increasing  renewables  uptake,  it  is  important  to  find  a 
predictable and robust approach, not reliant on ad-hoc interventions and fully consistent 
with  EU  legislation (58).  This  includes  safeguarding  the  level  and  conditions  to 
renewable  energy  projects  that  have  been  granted  support.  Another  cash-flow  issue  in 
the  market  is  the  sizeable  arrears  related  to  Transmission  System  Operator  payments 
(both  to  and  from  the  operator,  but  particularly  regarding  the  due  payments  to  the 
system  operator  from  the  incumbent)  as  well  as  to  the  Renewable  Energy  Sources 
Account. This is a source of concern, as the stock of arrears drain the market’s liquidity 
and could limit its effectiveness. Another issue, where progress has been made was the 
decision  adopted  by  the  national  energy  regulator  on  a  long-standing  case  on  the 
compensation  measures  to  industrial  consumers  regarding  gas  distribution  tariffs,  but 
the actual implementation of this decision is yet pending. 

Greece carried out a public consultation on its transition Master Plan, the basis for 
the  territorial  strategies  and  future  reforms  to  help  areas  affected  by  the  lignite 
decommissioning  by  end-2023.  The  draft  plan,  written  in  consultation  with  key 
stakeholders, looks at  the approach to  take for  Western Macedonia  and Megalopoli  in 
the  context  of  the  plan  to  decommission  lignite  plants  and  mines.  Based  on  the  five 
pillars of clean energy, industry, smart agricultural production,; sustainable tourism, and 
of  technology  and  training,  the  plan  will  examine  the  investments,  infrastructure, 
training  and  incentives  needed  to  help  the  regions  find  their  competitive  advantage 
following the closure of one of their major economic source. Greece’s decommissioning 
plants continues, and this year will see several plants taken off line.  

Transport and logistics 

The  authorities  have  improved  the  governance  of  the  steering  committee  for  the 
rationalisation  of  implementation  of  railway  investment  projects.  The  steering 
committee’s mandate was modified with the double objective to a) be more streamlined 
with a smaller number of participants and b) strengthen its capacity to take decisions. It 
convened  for  the  first  time  on  4 November  2020.  The  steering  committee  provides 
strategic  supervision  and  guidance,  coordinates  the  preparation  of  the  action  plan  for 
railways  and  makes  proposals  to  the  minister  for  infrastructure  and  transport  for  all 
matters relating to the plan and the reform of the sector. The action plan will have three 
strands:  

  Strand  1:  Recommendations  on  investment  planning,  financial  requirements, 
mechanisms,  maturity  and  implementation  of  railway  projects  with  financial 
allocation tools/sources, timing, risk assessment/management for 2020-2030.  

(57) The  RES Special  Account (ELAPE) is a specific  fund set  up to pay producers of renewable energy 
and  is  funded  by  various  sources,  such  as  a  share  of  Emissions  Trading  Revenues  and  consumer 
charges. 

(58) This includes also EU Directives that will need to be transposed into national legislation in the coming 

months (e.g. Directive 2018/2001 and Directive 2019/944). 

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Chapter 7 – Labour and product markets 

  Strand  2:  Digital  transformation  and  adaptation  of  the  rail  to  the  challenges  of 
climate change, with a focus on the integration of systems and the modernisation of 
the services. 

  Strand  3:  The  organisational  transformation  of  the  Organisation  of  railways  of 
Greece (OSE) and its subsidiary implementing infrastructure projects (ERGOSE) to 
create adequate prerequisites for growth, rational planning and efficient management 
and implementation of railway projects and infrastructure. 

By  the  end  of  the  year,  a  detailed  implementation  plan for  the  transformation  of 
the  two  companies  will  be  prepared.  The  technical  support  project  financed  by  the 
European  Commission  is  in  the  contracting  phase.  In  the  meantime,  no  progress  has 
been observed in the implementation of railways projects. 

The  authorities  have  revised  the  legal  framework  for  sustainable  urban  mobility 
plans according to best European practices.  Following this revision, a report on the 
progress  of  the  elaboration  of  sustainable  urban  mobility  plans  for  the  main  urban 
centres will be submitted by 15 November.  

The authorities are taking steps to improve the investment climate in the logistics 
sector.  To  this  end,  they  have  established  an  inter-ministerial  committee  with  the 
participation of the ministries of Development, Transport and Maritime Affairs, with a 
view  to  addressing  possible  legislative  gaps.  In  the  previous  months,  the  focus  of  the 
Committee was on the seamless  movement  of  goods during the pandemic. During the 
summer period, the volumes of imports and exports decreased substantially compared to 
the same period in 2019, partly due to the lower demand for tourism services, but exact 
figures are not yet available. A study will be undertaken with technical support from the 
European Commission to propose ways to increase the added value of goods transiting 
through Greece. 

45 

 
8.  HELLENIC CORPORATION OF ASSETS AND PARTICIPATIONS 

(HCAP) AND PRIVATISATION 

8.1.  HELLENIC CORPORATION OF ASSETS AND PARTICIPATIONS 

The  Corporation  released  its  2019  annual  report  and  financial  results  end-
September 2020. A significant improvement in financial figures was registered across 
most of the corporation’s subsidiaries, and in the consolidated financial results for 2019, 
which was the second year in which the state-owned enterprises’ portfolio was managed 
by  the  Corporation.  The  results  therefore  reflect  the  impact  of  the  Corporation’s  first 
two  years  of  governance  and  operational  improvements.  The  Corporation’s  after-tax 
profit  for  2019  was  €57.2 million  on  dividend  revenue  of  €62 million,  up  from  2018 
profit  of  €13.1 million.  The  Corporation’s  consolidated  equity  rose  by  4.7%  to 
€3.7 billion. While it is expected that the 2020 results will be affected by the pandemic, 
the  governance  and  operational  improvements  in  the  Corporation’s  portfolio  of 
companies  appear  to  have  improved  their  abilities  to  weather  the  impact  of  the 
pandemic. 

The  updated  Ministerial  Guidance,  which  will  clarify  the  expectations  of  the 
authorities for the financial performance of the portfolio of companies held by the 
Corporation,  is  being  drafted  and  is  expected  to  be  finalised  by  end-2020. 
Specifically, the Ministerial Guidance is expected to set out targets and benchmarks per 
asset  category,  as  provided  for  in  the  law  and  internal  regulation  governing  the 
functioning of the Corporation.  

Following  the  adoption  of  the  mandates  of  the  respective  state-owned  enterprises 
by the Cabinet Committee in March 2020, the next phase of the implementation of 
the Coordination Mechanism – the statements of commitments – is expected to be 
finalised  by  December  2020.  The  statements  of  commitments,  which  are  agreed 
between  the  Corporation  and  each  state-owned  enterprise,  will  set  out  financial, 
operational  and  other  objectives  for  each  state-owned  enterprise.  Following  that,  the 
final  phase  of  this  initial  implementation  of  the  Coordination  Mechanism  will  be  the 
preparation of performance contracts setting out public service obligations for a limited 
set of state-owned enterprises.  

The  Corporation  has  continued  its  work  on  corporate  governance,  in  particular 
regarding  the  review  of  the  boards  of  the  state-owned  enterprises,  a  mid-2019 
specific commitment. Implementing international standards of governance is a critical 
objective of establishing the Corporation and a key value driver. Of the thirteen state-
owned  enterprises  in  the  Corporation’s  portfolio,  only  the  assessment  of  the  Board  of 
Directors for the Hellenic Exhibition Organisation (HELEXPO) remains pending and is 
expected  to  be  finalised  by  December  2020.  The  appointment  of  a  new  Board  of 
Directors  for  Greek  Saltworks  was  completed  at  the  end  of  October.  So  far,  the 
Corporation has identified and appointed more than 80 board members (executive and 
non-executive)  in  its  portfolio  enterprises  through  open,  professional  and  transparent 
procedures. 

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The  Public  Real  Estate  Company  (ETAD)  is  taking  various  concrete  steps  to 
enable stronger performance in identifying its portfolio and actively managing its 
assets.  The  recent  acquisition  of  a  comprehensive  information  management  system  is 
expected  to  facilitate  the  Company’s  efforts  to  develop  and  commercially  exploit  its 
assets.  The  Company  has  also  developed  a  pipeline  of  flagship  transactions  for  the 
coming 18 months. The authorities have provided support to the Company in relation to 
former  assets  of  Hellenic  Shipyards,  one  of  the  packages  in  that  pipeline.  These 
initiatives  should  enable  greater  transparency  around  the  Company’s  progress  toward 
effective  real  estate  management.  Strong  performance  of  the  real  estate  portfolio  is 
critical to the overall long-term success of the Corporation in facilitating investment and 
debt reduction, also considering that the Public Real Estate Company continues to face 
certain legal cases, which could lead to a significant fiscal impact.  

The  authorities  are  slowly  progressing  with  the  evaluation  and  screening  of  real 
estate assets included in the package of 10 119 assets identified for transfer to the 
Public Real Estate Company in 2018. Following the decision by the Council of State 
in  May  2020  to  cancel  the  transfer  of  these  10 119  assets  to  the  Public  Real  Estate 
Company,  on  the  ground  that  the  process  followed  was  not  the  correct  one,  the 
authorities are working on setting up a legally solid process for the transfer (59) once the 
full screening of the package is finalised.  

The  authorities  also  intend  to  proceed  with  a  comprehensive  study  that  will  help 
them in the elaboration of a holistic and coherent strategy aiming to optimise the 
functioning  of  the  Greek  real  estate  market.  Structural  initiatives  that  will  in  turn 
improve  the  performance  of  publicly  held  real  estate  will  be  welcome,  though  any 
initiatives will need to be consistent with the independent asset management mandates 
of the Corporation and, in turn, the Public Real Estate Company.  

The  transfer  of  the  Olympic  Athletic  Centre,  which  was  a  specific  end-2018 
commitment, proves to be very complex, seeing progress despite delays. Preparatory 
work for the tender, which will assess the works needed for maintenance or overhauling 
of  each  installation  of  the  Athletic  Centre,  has  received  a  further  extension,  and  it  is 
expected  to  be  completed  by  November  2020.  Concurrently,  the  recently  appointed 
management  committee  of  the  Olympic  Athletic  Centre  already  started  carrying  out  a 
series  of  maintenance  works  in  parts  of  the  premises  to  enable  their  exploitation.  The 
authorities  are  planning  to  prepare  a  development  master  plan  for  this  extensive  and 
important  site 
the  Hellenic  Corporation  of  Assets  and 
Participations.  

in  coordination  with 

The  authorities  have  recently  also  proposed  adding  a  mandate  to  the  Hellenic 
Republic  Asset  Development  Fund  to  assume  the  function  of  the  Project 
Preparation Facility (see section 3.5). This is potentially a major new mandate for the 
Fund in terms of both, headcount and responsibility. It will be important to ensure that 
adding this mandate to the Fund will not require the Corporation to divert attention from 
its  core  mandate,  nor  affect  the  Corporation’s  independence,  while  maximising  the 

(59) The transfer will concern all assets eligible for transfer except those that are excluded via the relevant 

provisions of the Law on the Hellenic Corporation of Assets and Participations. 

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contribution  of  the  Project  Preparation  Facility  to  accelerating  the  absorption  of  EU 
funds in Greece.  

8.2. 

IMPLEMENTATION OF THE ASSET DEVELOPMENT PLAN 

Progress  with  specific  transactions  and  due  specific  commitments  since  the  last 
report has been as follows: 

Hellinikon:  The  authorities  continued  the  strong  engagement  and  efforts  to  complete 
the  prerequisites  for  the  financial  closing  of  the  transaction.  Following  the  Council  of 
State  decision  of  18 September,  rejecting  the  petition  for  annulment  in  relation  to  the 
ongoing tender for the award of the casino license, the way for the financial closing of 
the  transaction  has  been  established.  The  current  state  of  play  on  key  elements  is  as 
follows: 

  The  tender  process  for  awarding  the  casino  licence  is  at  an  advanced  stage.  The 
Council of State decision of 18 September has allowed the opening of the financial 
offer of the only bidder remaining in the tender on 7 October and the selection of the 
provisional  preferred  bidder  by  the  Hellenic  Gaming  Commission  on  13 October 
2020. 

  The relocation of the public users is almost completed with only a few arrangements 
to  be  made  for  users  staying  on  site.  There  have  been  no  new  developments  since 
mid-September.  

  The  partition  of  the  Hellinikon  site  agreed  in  February  2020  is  currently  being 
enshrined in a binding document (Partition Deed and Surface Rights Establishment 
Deed).  The  binding  document  is  being  drafted  with  the  aim  to  be  finalised  for 
execution by end November. 

  Pending  legal cases.  Petitions  for annulment  have been filed before the  Council of 
State  for  a  number  of  cases.  All  cases  have  been  set  for  discussion  in  November 
2020.  

  Demolition of current buildings on the site was launched on 3 July. The demolition 
process of the first batch / cluster of illegal buildings has been completed involving 
more than 90 building structures over the site.  

Marina of Alimos concession: The Marina of Alimos is one of the largest marinas in 
the  South-Eastern  Mediterranean,  located  on  the  South-Eastern  waterfront  of  Athens. 
Despite some technical issues, the transaction is expected to be financially closed before 
the end of the year.  

Hellenic  Petroleum:  The  transaction  is  subject  to  significant  delays  following  the 
failure  of  the  first  tender  in  mid-2019.  The  Fund  is  considering  all  options.  However, 
following  the  significant  fall  in  the  capitalisation  value  of  the  company  over  the  past 
months due primarily to the impact of the coronavirus on the oil and gas markets, the 
Fund considered appropriate to delay further the launching of the transaction to a later 
point in time. 

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Sale of 30% of Athens International Airport: The tendering process was proceeding 
well prior to the coronavirus outbreak, with nine investment parties qualified to proceed 
to  the  Binding  Offers  Phase.  However,  the  pandemic  has  impacted  severely  the  air 
transport sector. The Fund will determine next steps once the situation improves, likely 
late in 2021.  

Public  Gas  Corporation  –  DEPA:  Tenders  for  both  companies  were  launched  in 
December 2019 for DEPA  Infrastructure and in  January 2020 for DEPA Commercial, 
attracted strong investment interest and progressed well despite the pandemic. Access of 
prequalified bidders  to  the Virtual  Data Room  was granted in  early  August  for DEPA 
Infrastructure,  whereas  for  DEPA  Commercial  access  was  given  by  the  end  of 
September. On 22 October 2020, the Regulatory  Authority for Energy took a decision 
providing clarity on the tariffs 2019-2022 (60). The Authority also  contributed towards 
further  clarity  on  the  DEPA  Infrastructure  asset  perimeter  to  ensure  it  remains  a 
cohesive and attractive asset through approving the 2020-2024 development plan of the 
Public  Gas  Distribution  Networks  S.A.  (DEDA).  For  DEPA  Commercial  there  is  a 
pending issue on the final outcome of the court case regarding an industrial customer of 
DEPA,  who  was  awarded  compensation  for  damages  caused  by  DEPA  imposing 
abusive contractual terms upon it during the period 2010-2015. DEPA has appealed the 
decision before the Court of Appeals of Athens.  

Egnatia:  The  privatisation  process  for  the  Egnatia  motorway  entails  the  award  of  a 
long-term concession for the operation and maintenance of the motorway and its three 
vertical axes. The deadline for the submission of binding bids had been further extended 
to 11 December 2020 as significant open issues remained pending. The authorities and 
Egnatia S.A. proceeded to the implementation of some of the remaining pending actions 
over the past two months, namely: A significant number of toll stations were completed 
and put in operation at the beginning of November and an additional number is expected 
to be completed and put in operation before the date of the submission of binding bids 
as  this  will  secure  revenue  streams  for  the  project  and  demonstrate  the  authorities’ 
commitment  to  proceed  with  its  implementation.  The  Ministry  of  Infrastructure 
committed to putting all the toll stations in operation before the commencement of the 
concession agreement. Additionally, some progress was made over the past two months 
in  relation  to  the  required  works  (the  installation  of  safety  barriers)  for  the  remaining 
14 tunnels  to  be  licenced  under  category  E  (i.e.  excluding  the  transport  of  dangerous 
cargo). Thus, though progress may have been slower than expected, the recent actions 
taken constitute significant steps towards the conclusion of this privatisation transaction, 
namely the operation of a large number of toll stations for the first time after almost one 
year. Close monitoring will continue. 

Regional ports: Following the launch of tendering processes for the sale of shares for 
the ports of Alexandroupolis and Igoumenitsa (sale of a majority stake of at least 67% 
in the share capital of the company) and the sub-concession of a multi-purpose terminal 
for the port of Kavala on 17 July 2020, the phase of the invitation for the expression of 
interest  was  concluded  by  the  end  of  October  for  all  three  transactions  and  attracted 
strong investors’ interest. 

(60) OJ B 4925/09.11.2020. 

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Underground  natural  gas  storage  South  Kavala:  The  South  Kavala  gas  field  is  an 
almost depleted natural gas field located in the North Aegean Sea. On 22 June 2020, the 
Fund launched an international public tender for the award of a concession agreement 
for  the  use,  development  and  operation  of  an  underground  gas  storage  facility  in  the 
South  Kavala  natural  gas  reservoir  for  a  period  of  up  to  fifty  years  following  the 
licensing  of  the  project.  The  phase  of  the  invitation  for  expression  of  interest  was 
concluded on 19 October 2020 and expression of interest has officially been submitted 
by 3 parties. The pending decision of the Regulatory Authority for Energy on the tariff-
setting framework is expected by end November 2020. 

Further actions related to state-owned enterprises 

Outside  the  scope  of  the  Asset  Development  Plan  implemented  by  the  Fund,  the 
authorities  are  working  towards  addressing  long-standing  weaknesses  of  certain 
state-owned-enterprises, through consolidation and privatisation. In the case of the 
Hellenic Aerospace Industry (HAI), efforts are focused on operational improvements to 
address long-standing structural problems. The sale of the assets of the Hellenic Vehicle 
Industry  (ELVO),  a  company  placed  under  special  liquidation  in  accordance  to  Law 
3429/2005, is progressing, following the launch of the tender in March 2020. Lastly, the 
authorities have taken steps to resolve the pending issues related to Larco, a loss-making 
ferronickel  production  company,  and  the  Public  Power  Corporation’s  biggest  debtor. 
These  include  resolving  the  ownership  status  concerning  some  of  its  assets,  a 
precondition  to  the  next  steps  of  the  special  administration  procedure,  which  was 
enacted  via  Law  4664/2020  in  the  context  of  recovering  incompatible  state-aid,  as 
declared by the Commission’s decision in 2014. 

50 

 
9.  PUBLIC ADMINISTRATION AND JUSTICE 

9.1 PUBLIC ADMINISTRATION 

The  modernisation  of  human  resource  management  is  progressing  and  the  vast 
majority of public sector entities has now completed their digital organigrams, an 
end-2020 specific commitment. Digitalisation of the organisational structure of public 
entities constitutes a key element for the ongoing work to establish a Human Resources 
Management System. Until end-October, more than 80% of general government entities 
had  completed  their  digital  organigrams.  Good  progress  has  especially  been  made 
during this reporting as concerns the larger entities (more than 20 employees) with more 
than  100  completing  their  digital  organigrams.  The  authorities  expect  that  nearly  all 
entities,  including  most  of  the  remaining  45  larger  entities (61)  (e.g.  Hellenic 
Broadcasting  Corporation,  Organisation  of  Railways  of  Greece  and  the  Management 
Organisation Unit of Development Programs), to complete this task by end-2020. The 
preparation  of  job  descriptions  for  each  of  the  posts  is  also  progressing  and,  to  date, 
71% of them have been completed (62). Continued progress is also expected to be made 
by the authorities in establishing a link between the job descriptions and the jobholder, 
which would establish a connection to the Single Payment Authority, and is planned to 
be  completed  by  end  of  this  year.  Further,  the  tender  on  Human  Resources  System 
Support  Services  (EU-funded through the National  Strategic Reference Framework) is 
expected to be awarded by end of this year. The authorities are progressing on a number 
of other actions due by the end of the year, which include adoption of a law to further 
strengthen the Supreme Council for Civil Personnel Selection (which is expected to be 
published  for  public  consultation  in  November),  completion  of  the  performance 
assessment round for 2019 (record high participation is expected and the authorities are 
working  towards  linking  individual  objectives  to  the  annual  action  plan  of  each 
ministry), and completion of a study to draw lessons learned from the mobility cycles 
performed so far (the latest one has been launched in October 2020). 

The  authorities  are  taking  steps  to  control  the  size  of  the  public  sector,  although 
the envisaged reduction of temporary posts due to their conversion into permanent 
posts  has  been  slow  and  is  yet  to  materialise.  The  evolution  of  personnel  in  2020, 
both permanent and temporary, remains in accordance with the hiring plans. However, 
the  envisaged  reduction  of  temporary  posts  following  their  conversion  to  permanent 
positions (63) is yet to become evident in the staffing figures. The European Institutions 
encouraged the authorities to step up efforts for the reduction in temporary posts to be 
evident in the end-2020 staffing figures, recalling that the exclusion of these permanent 
posts  from  the  annual  attrition  rule  had  been  made  on  this  basis.  The  authorities  are 
working on establishing an annual ceiling on temporary staff by end-2020. In an effort 
to  learn  from  past  lessons,  the  authorities  are  documenting  deviations  from  the  hiring 
procedures  and  the  unified  wage  grid,  with  an  initial  focus  on  the  period  from  July 
2019, while the previous years would be covered in the second stage. The ambition of 

(61) These 45 entities employ around 9 300 staff in total. 
(62) Approximately  225 500  job  descriptions  out  of  a  total  of  316 000  (as  uniformed  personnel  and 

teaching staff are excluded). 

(63) Concerns 4 500 special teachers and 3 257 for the ‘Home Assistance’ programme. 

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Chapter 9 - Public administration and justice 

the  authorities  is  to  complete  the  work  in  the  first  half  of  2021,  including  specific 
suggestions on how to address the identified deviations in a systematic manner. Finally, 
the ongoing review of the existing allowance scheme for hazardous and dangerous work 
is expected to be further delayed and not completed before April 2021.  

Table 9.1:  Evolution of public sector staff (2009-2020) 

(1) Includes all temporary contracts in General Government entities and legal entities under 
private law. For 2009-2013, the figure refers to the stock at the end of each year, whereas for 
2014-2019 the figure is a yearly average (Jan-Dec). For 2020, the figure is the average of the 
period January-September 2020 and does not include the staff involved in the treatment of the 
coronavirus. 
(2) 2014 figures are not comparable because data on personnel of legal entities of private law 
(permanent & temporary) are not available in census database. 
(3) Data on temporary staff not burdening the budget is not available for 2014. The figure of 
temporary staff for 2014 derived based on the census database comment that the number of 
temporary staff not burdening the budgets is 45 000 for 2014 (which equals the approvals of 2013 
for this type of personnel). 
(4) 2020 figures refer to the September 2020 data. 
Source: Apografi database. 

towards 

Further  progress  has  been  made 
the  depoliticisation  and 
professionalisation  of  the  public  administration,  through  completing  all  senior 
management appointments at ministries and adopting a new legislative framework 
for other public entities. A uniform selection process for senior management posts at 
public sector entities has come into effect (64). The adopted selection process will cover 
more than 450 general government entities, including hospitals and a significant number 
of large  entities (e.g. Single Social Security  Fund), while also  allowing  for candidates 
from the private sector to apply. The appointment of all Permanent Secretaries has been 
completed (65), while some progress is being made on the ongoing selection procedures 

(64)OJ A 197/12.10.2020, Articles 20-23. 
(65)The final of the 14 Permanent  Secretary posts was appointed on 21 October 2020 at the Ministry of 

Migration and Asylum. 

52 

YearPermanent staffTemporary staff burdening the budget (1)Elected staffOther categoriesTotal2009730,234153,08721,2863,366907,9732010700,962109,96821,2863,262835,4782011674,01257,85312,1133,088747,0662012654,78141,86912,0313,053711,7342013618,57222,62613,2523,103657,5532014(2)576,85612 833 (3)6,1882,891598,7682015600,48456,3857,1494,773668,7912016598,87058,0538,0574,851669,8312017602,90859,7318,2485,728676,6152018601,78964,9118,8876,027681,6142019604,56472,03210,2806,320693,1962020(4)603,13070,78410,7806,343691,037Change  to 2009-17.4%-53.8%-49.4%88.4%-23.9%                                                 
 
  
 
Commission Staff Working Document -  

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at ministries for middle management posts with the authorities planning to take steps to 
speed up the process.  

With  a  view  to  enhancing  legal  certainty  and  access  to  law,  the  authorities  are 
preparing a new Labour Law Code and Code of Labour Regulatory Provisions, an 
end-2020  specific  commitment,  and  agreement  on  further  areas  for  codification 
has been reached. The codification process is distinct from the modernisation of some 
aspects  of  the  labour  legislation  mentioned  above  (see  Section  7.1),  and  has  suffered 
delays due to the pandemic. The codified labour law is expected to be adopted by the 
end  of  2020.  The  annual  codification  plan  for  2021  was  adopted  by  the  Council  of 
Ministers  and  includes  an  ambitious  programme,  including  on  spatial  and  town 
planning,  trading  of  goods  and  services,  collection  of  public  revenue  and  party 
financing. Finally, the tender for the flagship project to set up the national gateway for 
legal codification, a mid-2022 specific commitment, is progressing and is expected to be 
awarded by end of this year. 

9.2.  DIGITAL GOVERNANCE 

The  authorities  are  advancing  with  key  reforms  to  improve  Greece’s  digital 
performance, aided by a comprehensive digital strategy which is underway, and a 
newly  adopted  unified  legal  framework  on  digital  governance.  The  new  national 
digital  strategy  (‘Digital  Bible’),  which  is  expected  to  be  submitted  for  public 
consultation shortly, will outline Greece’s ambitious digital transformation agenda and 
reform  priorities  for  the  next  four  years.  The  adoption  of  the  Code  of  Digital 
Governance  on  22 September  2020,  a  key  milestone  for  Greece  concerning  the 
transposition  of  the  relevant  EU  Directive (66)  on  the  establishment  of  a  European 
Electronic  Communications  Code,  usefully  unifies  the  legislative  framework  on  key 
elements, including digital networks, 5G technologies, and transacting within and with 
government  services.  The  Greek  administration  aims  to  shortly  present  an  action  plan 
on  the  steps  needed  to  operationalise  the  new  Code  fully,  both  in  terms  of  secondary 
legislation and administrative actions.  

Improvements in digital skills, connectivity and the take up of new technologies by 
businesses  remain  key  priorities  for  Greece.  The  authorities  continue  implementing 
their  strategy  on  digital  upskilling  through  the  National  Digital  Academy  and  the 
National Coalition for digital skills and jobs. These initiatives respectively aim towards 
the  gradual  introduction  of  tailored  digital  skills  programmes  to  meet  the  needs  of 
specific  target  groups,  as  well  as  increase  the  digital  talent  pool  needed  for  the  twin 
transition (and mitigate the impact of delignification in the most affected areas, among 
others).  In  terms  of  addressing  connectivity  issues  and  promoting  5G  roll-out,  the 
auctioning  of  the  5G  pioneer  bands (67)  is  scheduled  for  end-2020  and  the  authorities 
expect  to  eventually  reach  96%  5G  coverage,  which  will  require  large  investment  in 

(66) The  new  law  regulates  issues  of  digital  governance  and  electronic  communications  in  the  public 
sector, and includes, inter alia, the transposition of the European Union Directive (EU) 2018/1972 on 
the  establishment  of  a  European  Electronic  Communications  Code,  codifying  more  than  125 
provisions, previously scattered in Greek legislation. 

(67) 700 MHz, 3.6 GHz and 26 GHz. 

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very-high capacity networks (68). The innovative scheme for a National Fund for 5G in 
Greece,  established  through  the  recently  adopted  Code  of  Digital  Governance,  is 
expected to  play  a pivotal  role in the development  of the 5G ecosystem. This  aims to 
channel funds to innovative small and medium-sized enterprises, thus helping create a 
market  of  5G  products  and  promoting  the  development  of  vertical  industries  such  as 
transport, logistics and supply chain, manufacturing, utilities, grids and health care.  

Tangible progress is recorded with respect to the simplification and digitalisation 
of public sector processes and data, and the interoperability of public systems and 
registries. Specifically: 

  The  work  on  process  simplification  and  digitalisation  continues  through  the 
implementation of the National Programme for Process Simplification, notably in the 
areas  of  transport  and  justice.  To  structure  this  work,  the  authorities  aim  to  deliver 
shortly  an  action  plan  to  prioritise  the  simplification  areas  and  web  services  to  be 
launched over the next year.  

  The  authorities  are  on  track  with  the  implementation  of  the  roadmap  for  the 
development  of  the  integrated  transactions  portal  (gov.gr),  which  to  date  features 
more than 670 services, i.e. some 60 more since September.  

  Work  continues  on  promoting  the  interoperability  of  public  registries  and  systems, 
with  the  first  steps  towards  the  creation  of  a  “master  interoperability  registry” 
completed (69).  

  Work progresses on ensuring the robustness and business continuity of key public IT 

systems (70). 

  The tender for the digitalisation of geospatial data, which is an ambitious reform (71) 
to be rolled-outed within two years, namely for the development of the Single Digital 
Map and the State Infrastructures Registry, was launched.  

9.3.  JUSTICE 

Steady progress has been made with the transition to mandatory electronic filing 
and processing of documents throughout the Courts. Electronic filing and processing 
of  documents  and  the  electronic  issuance  of  court  decisions  are  key  steps  towards 
improving the efficiency of the judiciary, whereas the distribution of digital signatures 

(68) This  includes  rural  areas  and  islands,  securing  5G  networks,  including  corridors  for  connected  and 
automated mobility, and international connectivity (e.g. project on submarine cables with Cyprus and 
Italy). 

(69) The first steps taken concern the consolidation of citizen records among four core registries (citizens, 

tax, insurance and identity). 

(70) This concerns the launching of the tender for database private cloud computing services and database 

backup infrastructure, which took place in October. 

(71) The reform aims within a two-year horizon to digitally capture and make publically available all land 
use  rules  concerning  licensing  and  construction  covering  all  of  Greece’s  territory  (e.g.  concerning 
forest, offshore and coastal areas, archaeological sites), in addition to creating digital records  for all 
key public infrastructures, to be used as an infrastructure management tool by the administration. 

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to court officials and staff, as well as to the members of legal professions (see below), is 
a prerequisite for the implementation of all above activities. The authorities committed 
to submit shortly an action plan on e-filing-related initiatives, containing an overview of 
the  current  situation  and  detailing  planned  actions,  including  an  implementation 
timetable. Next steps include the adoption of legislation, by the end of 2020, allowing 
for  electronic  filing  in  instances  where  this  is  not  yet  expressly  allowed  and  for  the 
remote submission of declarations of attendance of a hearing by lawyers. With regard to 
the electronic issuance of court decisions, the authorities plan to distribute to all courts, 
by the end of January 2021, a software developed for this purpose by the Piraeus Court. 
Further progress  has been made regarding the electronic issuance of court certificates. 
Regarding  the  project  for  the  consolidation  of  approximately  forty  insolvency-related 
certificates  into  a  few  more  encompassing  ones,  the  authorities  submitted  a  progress 
report, according to which the project will be completed by  February 2021. The penal 
extract certificate is henceforth available online and the authorities expect the procedure 
for  its  issuance  to  become  fully  automated  by  June  2021,  while  the  authorities 
committed  to  deliver  a  progress  report  on  the  fully  electronic  implementation  of  the 
consensual divorce procedure (as opposed to the mere delivery of related certificates) by 
January  2021.  The  authorities  intend  to  adopt  legislation  allowing  for  the  use  of 
printouts  of  e-certificates  as  certified  copies  by  the  end  of  December  2020.  They  are 
also in the process of establishing an interconnection between the Athens, Thessaloniki, 
Piraeus  and  Chalkida  courts  on  one  hand  and  local  bureaus  for  the  provision  of 
administrative  services  to  citizens  on  the  other,  allowing  for  the  delivery  of  e-
certificates by the latter.  

Work is ongoing regarding the distribution of electronic signatures to judges and 
members of the legal professions. Concerns about private data protection resulted in a 
temporary halt of their distribution to judges and court clerical staff but the problem was 
subsequently resolved and the authorities expect it to be completed by November 2020. 
As for the members of the legal professions, the authorities confirmed that the Ministry 
of  Justice  stands  ready  to  take  legislative  initiative  to  facilitate  and  accelerate  the 
proceedings,  should  such  a  course  be  warranted  in  view  of  the  entry  into  force  of 
mandatory e-filing in administrative jurisdictions in January 2021.  

The  evaluation  of  offers  in  the  context  of  the  tender  for  the  second  phase  of  the 
Integrated System for the Processing of Civil and Penal Cases, an end-2020 specific 
commitment, continues and the authorities confirmed their intention to award the 
contract  to  the  selected  bidder  in  December  2020.  Following  the  submission  of  an 
assessment  of  the  technical  part  of  offers  to  the  Ministry  of  Justice  for  approval,  the 
authorities  foresee  completion  of  the  assessment  of  the  financial  part  of  the  offers  by 
end-November  2020,  in  time  for  proceeding  as  planned  with  awarding  the  contract  in 
December 2020. 

Other reforms in the judicial system have marked steady progress as follows: 

  The authorities took a number of initiatives to support the function of mediation. The 
Central  Committee  for  Mediation  is  putting  in  place  a  help  desk  for  legal 
professionals and citizens, to provide legal guidance and support to stakeholders. The 
authorities are monitoring the take-up of mediation. Regarding progress recorded so 
far covering the first two quarters of 2020, while the number of litigants who chose 

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Chapter 9 - Public administration and justice 

to  proceed  with  mediation  in  the  context  of  mandatory  mediation,  did  not  exceed 
18%,  the  number  of  the  cases  in  question  eventually  resolved  in  this  manner 
amounted to 70%, and the duration of the mediation proceedings did not exceed two 
days.  In  the  context  of  optional  mediation,  a  35%  increase  in  cases  subjected  to  it 
was recorded from the first to the second quarter of 2020 (from 191 to 250 cases), of 
which  approximately  50%  were  successfully  resolved  within  two  days  on  average. 
These results are encouraging and highlight the need for the further dissemination of 
information and the provision of training to stakeholders.  

  The implementation of the legislation on special chambers in civil and administrative 
courts  will  be  detailed  in  a  progress  report,  which  will  be  provided  by  December 
2020.  On  1  October  2010,  the  plenary  formation  of  the  Athens  Court  of  appeal 
resolved unanimously to form two special chambers to deal with competition cases 
(actions  for  damages  for  transgressions  of  competition  law)  and  private  disputes 
related to national and EU law in the fields of electronic transactions, energy and the 
protection of personal data. Moreover, regarding first-instance courts, following the 
appointment  of  their  newly  elected  administrations  in  October  2020,  the  next  steps 
are expected to be determined by their respective relevant administrative formations. 
The authorities committed to deliver a progress report to the European institutions by 
December 2020. 

  The work stream on improving the working methods in courts, which is an important 
part of  the ongoing  justice reform, is  proceeding as planned. The Code  of Judicial 
Staff is  set  for  adoption  in  December 2020. According to  information  given by the 
authorities,  it  will  set  exacting  professional  standards  through  cultivating  a 
heightened sense of duty on the basis of objective evaluation criteria and meritocratic 
promotion;  moreover,  two  new  branches  of  judicial  clerks  will  be  established,  one 
for  judicial  documentation  and  assistance  and  one  for  judicial  communication  and 
international  relations.  Each  branch  will  have  its  own  hierarchy  and  specifically 
tailored promotion criteria, recruitment process and introductory training. Finally, the 
quality of service and the maintenance of a  high level of professional skills will be 
ensured  by  the  provision  of  lifelong  training  in  areas  such  as  administration  and 
organisation of the service, digital skills, procedural and substantive law. 

  The  revision  of  certain  sections  of  the  draft  Code  on  the  Status  of  Judges  and  the 
Organisation  of  Courts,  which  are  expected  to  bring  improvements  to  the 
methodology  for  the  evaluation  and  professional  advancement  of  judges  and  to  the 
treatment  of  disciplinary  matters,  will  be  entrusted  to  a  law-drafting  committee  in 
January 2021 with a view to its adoption in time for the start of the next judicial year 
in September 2021. Its work will be informed by technical support provided through 
the European Commission on best practices in various Justice-related matters, whose 
relevant aspects will be prioritised in view of a timely submission of its conclusions 
to the law-drafting committee. 

  The launch of the tender for the ‘JustStat’ project for the creation of the statistical 
information unit for judicial data is expected to take place by the end of December 
2020.  Concurrently,  the  authorities  confirmed  that  secondary  legislation  is  in 

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Chapter 9 - Public administration and justice 

preparation,  in  cooperation  with  the  Hellenic  Statistic  Authority,  regarding  the 
provision of technical know-how.  

9.4.  FIGHT AGAINST CORRUPTION 

The  National  Authority  for  Transparency  is  now  fully  operational,  which  is 
expected  to  improve  coordination  and  a  number  of  important  steps  have  been 
taken regarding the fight against corruption in the political field. Good progress is 
being made on several work streams (72). The Authority oversees the implementation of 
the National Anticorruption Plan, which shows encouraging results. For instance, it has 
supported the Ministry of Health in the drafting of a dedicated anticorruption strategy, 
which  is  planned  to  deliver  results  before  the  end  of  the  year (73).  A  number  of 
important  steps  have  also  been  made  regarding  the  fight  against  corruption  in  the 
political  field.  First,  the  legislation  on  political  party  financing  will  benefit  from  a 
codification  project  in  2021,  which  should  contribute  to  making  the  legal  framework 
more coherent and clear. Secondly, the draft law on lobbying activities is planned to be 
adopted by the end of this year and to be implemented as of mid-2021 (74). As regards 
asset  declaration  audits,  one  of  the  four  bodies  in  charge  has  introduced  a  risk-based 
methodology to plan its audits, which is a positive development. Some of these bodies 
reported  that  a  swifter  access  to  databases,  such  as  the  one  held  by  the  Independent 
Authority  for  Public  Revenue,  would  reinforce  their  operational  capacity.  In  this 
context, the authorities are yet to align the list of politically exposed persons subject to 
asset  declaration  with  the  updated  definition  of  politically  exposed  people, as  well  as 
with the persons entrusted with top executive functions at national level. Last, a major 
reform,  which  aims  at  implementing  sound  internal  control  systems  across  the  public 
administration, is overseen by the Authority and is expected to have a major impact in 
the  fight  against  corruption  in  the  public  administration  as  well  as  improving  the 
monitoring of the public finance management area (see section 3.4). 

The implementation of the recommendations made by the Group of States against 
Corruption  regarding  the  softening  of  sanctions  for  bribery  of  public  officials  is 
ongoing. The recommendations (75) referred to June 2019 changes in the Criminal Code 
and the Criminal Code of Procedures that downgraded the criminal offence of bribery of 
public officials from a felony to a misdemeanour. Addressing these recommendations in 
a consistent way requires a comprehensive review of the legal framework for the fight 
against corruption of public officials. The Committee in charge is expected to draft new 
amendments  by  mid-2021.  The  Group  of  States  against  Corruption  has  invited  the 
authorities to submit a report on measures taken to implement its recommendations by 
these 
end-October  2021.  A 
recommendations  would  enable  Greece  to  fight  corruption  of  public  officials  more 

the  provisions  addressing 

swift  adoption  of 

(72) For 

a  more 

complete 

overview, 

see 

the  Rule 

of  Law  Report 

for  Greece 

https://ec.europa.eu/info/sites/info/files/el_rol_country_chapter.pdf. 

(73) It also provided support in the design of an updated anti-corruption strategy in the public procurement 

sector (see section 3.4). 

(74) This  reform  would  help  addressing  the  recommendation  (vii)  that  the  Group  of  States  against 
its  4th  evaluation:  https://rm.coe.int/fourth-evaluation-round-corruption-

in 

Corruption  made 
prevention-in-respect-of-members-of/168078f072. 

(75) Ad  hoc  Report  on  Greece  (rule  34)  December  2019  https://rm.coe.int/ad-hoc-report-on-greece-rule-

34-adopted-by-greco-at-its-84th-plenary-m/1680994dc0 and follow-up report. 

57 

                                                 
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effectively  and  also  to  abide  by  the  Criminal  Law  Convention  on  Corruption  and  its 
Protocol. 
Additional 

58 

ANNEX 

Progress  with  the  implementation  of  due  specific  commitments  and  relevant  continuous  commitments  (*)  given  to  the  Eurogroup 
(Annex to the Eurogroup statement, 22 June 2018)  

Commitment 

State of play and next steps 

(*)  Fiscal.  Achieve  a  primary  surplus  of  3.5%  of  GDP  over  the 
medium-term. 

Public  financial  management.  Complete  the  cash  monitoring  and 
forecasting for the General Government Treasury account system. 

(*)  Arrears.  The  authorities  will  implement  the  arrears  clearance 
plan and avoid the accumulation of new arrears. 

The  2021  Draft  Budgetary  Plan  expects  the  primary  deficit  monitored 
under  enhanced  surveillance  in  2021  to  reach  1.1%  of  GDP.  The  fiscal 
policy  setting  planned  for  2021  takes  into  account  the  continued 
application of the General Escape Clause in 2021. 

The  commitment  has  been  successfully  completed.  The  Treasury  Single 
Account system is operational and offers an overview of the cash situation 
of the state as well as an efficient liquidity-monitoring tool. The Ministry 
of Finance has set up a dedicated tool for the monitoring of the entities’ 
cash forecasting, which will be gradually rolled out. 

The  stock  of  arrears  has  decreased  since  the  last  report  but  sustained 
efforts  are  required  to  meet  the  ambitious  target  for  the  end  of  the  year. 
While  the  stock  of  arrears  remains  above  the  levels  envisaged  in  the 
October 2019 action plan, the slippages created in early-2020 also due to 
the pandemic have been recovered, except for the backlog of unprocessed 
pension claims, where the automatic processing and awarding of pensions 
is  expected  to  deliver  fully  only  next  year.  While  the  stock  of  arrears 
decreases,  new  arrears  continue  to  be  created,  which  underlines  the 
the  Hellenic  Court  of  Auditors 
importance  of 
recommendations,  a  mid-2021  specific  commitment,  amongst  which 
strengthening the internal control system is key.  

implementing 

Tax administration. Reach the agreed permanent staffing positions  The  supplementary  wage  grid  legislation  for  the  Independent  Authority 
for  Public  Revenue,  which  is  a  key  step  towards  completing  its  human 

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Commission Staff Working Document - Annex 

Commitment 

State of play and next steps 

at the Independent Authority of Public Revenue (IAPR) of 12 500. 

Tax policy. Greece will undertake a nationwide valuation exercise of 
property tax value based on market  values and  will update property 
tax  values  for  ENFIA  and  other  taxes  fully  in  line  with  market 
values. 

(*) Health care. The authorities will complete the full offsetting and 
collection  of  the  clawback  by  June  every  year  for  the  previous 
calendar year. 

resources  reform,  has  been  published  for  public  consultation  and  is 
expected to be adopted by end-November 2020. The reform is expected to 
strengthen the Independent Authority’s ability to maintain and attract new 
high-calibre  staff,  which  at  the  end  of  the  third  quarter  remained  well 
below  the  staffing  target  set  for  end-2019  (11 947  compared  to  12 500). 
The  authorities  have  confirmed  that  ongoing  hiring  procedures  at  the 
Ministry  of  Finance  will  not  have  a  negative  impact  on  the  Independent 
Authority’s  overall  capacity.  It  is  expected  that  the  overall  human 
resources reform will become operational by 1 January 2021. 

Progress towards completion of the nationwide reassessment of property 
tax  values  has  slowed  down;  this  was  a  mid-2020  specific  commitment, 
whose  finalisation  has  now  been  rescheduled  for  mid-2021.  Inevitable 
delays  occurred  earlier  in  the  year  due  to  the  coronavirus  lockdown  and 
further delays have taken place owing to the quality assessment required 
by  successful  appeals  to  the  Council  of  State.  The  reassessment  and 
expansion  of  the  existing  value  zone  system  is  now  planned  to  be 
finalised in March 2021, in time for the property tax assessment of August 
2021. 

Clawbacks  are  still  high  but  steps  are  being  taken  to  improve  their 
collection. The authorities adopted legislation to  enable the collection of 
the  2019  clawback  for  the  pharmaceuticals  and  to  start  the  collection  of 
the providers’ clawback for the years 2018 and 2019. The authorities are 
making incremental steps to tackle the supply-driven overconsumption of 
health services. However, deeper revisions appear necessary to effectively 
counter  supply-induced  demand  and  to  curb  the  generation  of  new 
clawbacks.  

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Commission Staff Working Document - Annex 

Commitment 

State of play and next steps 

Health  care.  Greece  will  ensure  the  rollout  of  the  primary  health 
care  system,  in  particular  by  opening  all  240  primary  health  care 
units. 

Health  care.  Achieve  a  share  of  centralised  procurement  in  total 
hospital expenditure of 30%. 

Social welfare. Complete the rollout of all three pillars of the Social 
Solidarity Income scheme. 

Social  welfare.  Review  the  system  of  subsidies  for  local  public 
transport. 

Greece is strengthening the preparedness of the health-care system for the 
current health emergency, and the implementation of a fully-fledged and 
effective  primary  health  care  would  be  key  in  that  respect  given  the 
positive  results  already  achieved  by  putting  to  use  the  existing  primary 
health  care  units.  The  authorities  committed  to  finalise  the  new  legal 
framework  by  the  time  of  publication  of  the  10th  enhanced  surveillance 
report due in mid-2021.  

Centralised  procurement  for  health  care  expenditure  is  moving  forward 
despite the current situation. The authorities  are  progressing towards the 
implementation  of  this  target,  with  an  intermediate  goal  of  30%  to  be 
centrally procured by the first quarter of 2021. The authorities have also 
agreed  to  re-activate  the  price  observatory  from  January  2021  and  to 
adopt  the  new  legal  status  of  the  National  Central  Authority  of  Health 
Procurements by the end of 2020.  

The completion of the third pillar of the Social Solidarity Income scheme, 
stalled following the coronavirus outbreak, needs to restart. The provision 
of  labour  market  reintegration  services  for  the  beneficiaries  of  the 
Guaranteed Minimum Income scheme should be based on the findings of 
the  pilot  project  undertaken  in  a  number  of  municipalities  in  2019.  The 
authorities  have  adopted  a  revised  timeline,  according  to  which  the 
nationwide rollout should start in April 2021. 

The implementation of this commitment is overall progressing according 
to  the  agreed  timeline.  The  secondary  legislation  to  allow  a  regular  and 
objectively-based reimbursement of subsidised public transport tickets for 
vulnerable  groups  including  disabled  persons  and  members  of  large 
families  has  been  adopted  in  October  2020,  while  the  secondary 

61 

Commitment 

State of play and next steps 

Commission Staff Working Document - Annex 

Social  welfare.  Complete  the  set-up  of  the  single  pension  fund 
EFKA. 

(*)  Financial  stability.  Greece  will  continue  to  implement  reforms 
aimed  at  restoring  the  health  of  the  banking  system,  including  non-
performing  loans  resolution  efforts  by  ensuring  the  continued 
effectiveness  of  the  relevant  legal  framework  (i.e.  household  and 
corporate  insolvency,  out-of-court  workout,  non-performing  loans 
sales, e-auctions) and taking all necessary actions to this effect.  

legislation  setting  compensation  levels  for  main  transport  operators  is 
under preparation. 

The authorities are making good progress in finalising the organisational 
and institutional setup of the Single Social Security Fund (e-EFKA). The 
merging  of  the  public  sector  and  supplementary  pension  functions  has 
already  been  implemented  including  the  physical  move  of  offices;  the 
remaining  move  concerns  the  employees  of  the  former  farmers  fund, 
which is expected to be fully completed by the end of the year. 

the  process 

Following  the  adoption  of  the  new  Insolvency  Code,  the  authorities  are 
preparing  the  secondary  legislation  and  the  necessary  infrastructure.  In 
view of the entry into force of the Code in January 2021, the authorities 
aim  at  completing 
the 
development  of  the  underlying  electronic  platform  –  by  the  end  of 
December.  Work  on  the  key  ministerial  decisions  on  the  loan  subsidy, 
sale  and  leaseback  mechanism  and  the  algorithm  for  the  computation  of 
restructuring proposals will receive priority and the authorities committed 
to  share  advanced  drafts  with  the  European  institutions  by  mid-
November. 

incrementally  –  along  with 

The  authorities  have  adopted  a  set  of  new  provisions  to  enable  the 
processing  of  the  long-standing  backlog  of  household  insolvency  cases. 
Given  that  the  implementation  will  depend  on  the  case-processing 
capacity of individual courts, close monitoring is warranted. The success 
of these provisions will depend on the authorities’ ability to address staff 
shortages and overcoming infrastructure challenges.  

The  authorities  have  also  adopted  the  first  set  of  measures  aimed  at 

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enhancing  the  functionality  and  user-friendliness  of  the  e-auctions 
platform.  Regarding  further  identified  issues,  the  authorities  confirmed 
that  they  would  be  considered  in  the  context  of  the  Code  of  Civil 
Procedure review. The authorities committed to submit a progress report 
in November 2020. 

The  implementation  of  the  agreed  plan  for  the  clearance  of  called  state 
guarantees  is  on  track  while  the  backlog  of  called  guarantees  remains 
considerable.  

A  limited  amendment  of  the  primary  legislation  on  deferred  tax  credits 
has been voted in September to safeguard the loss-absorbing capacity of 
the banks’  capital  in  all  cases, including resolution.  Work is  ongoing on 
further technical aspects in the form of secondary legislation. 

In light of the coronavirus pandemic, the authorities decided in agreement 
with  the  social  partners  to  postpone  the  annual  update  of  the  statutory 
minimum wage, from June 2020 to January 2021. 

(*) Labour markets, product markets and competitiveness.  

Investment  licensing.  Complete  the  investment  licensing  reform, 
and to this end fully deploy the relevant ICT. 

The full deployment of the relevant IT system, which is critical to support 
the new investment licencing framework, continues to be delayed due to 
legal challenges.  

Investment licensing. Greece will finalise inspection legislation. 

In  the  area  of  inspections,  all  starting  tools  in  the  three  agreed  priority 
areas are expected to be swiftly put in action, in tandem with the full roll-
out of training. Remaining elements to ensure effective enforcement and 
compliance  on  these  areas  are  expected  to  be  fully  addressed  by  April 
2021,  in  parallel  to  the  roll-out  of  the  inspections  framework  in  the 
remaining  four  areas,  which  is  expected  to  be  completed  by  end-2021. 

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Commitment 

State of play and next steps 

Investment  licensing.  Greece  will  finalise  the  simplification  of 
investment licensing procedures in the agreed remaining sectors. 

Cadastre.  Greece  will  fully  establish  the  cadastral  agency  and 
complete 45% of cadastral mapping. 

Energy.  With  a  view  to  completing  reforms  in  the  energy  sector, 
implement the measures agreed as part of the joint assessment on the 
NOME auction system. 

The  successful  completion  of  the  remaining  work  critically  depends  on 
the  timely  inputs  by  all  ministries  involved  and  the  commitment  of  all 
stakeholders. 

The  authorities  are  expected  to  submit  for  public  consultation  by  end-
November  a  bill  that  will  simplify  licensing  procedures  in  most  sectors 
that  have  not  been  reformed  thus  far,  and  developed  a  timeline  to  fully 
complete  the  simplification  of  investment  licensing  procedures  in  all 
remaining  activities  by  June  2021.  In  parallel,  they  continue  to  simplify 
and fine-tune areas related to sectors already reformed. 

The cadastral agency is  expected to be fully operational by end-2021, in 
line with the roadmap for the cadastre project. This is later than envisaged 
under the original mid-2020 commitment and reflects delays encountered 
due to the pandemic but also earlier on. The authorities have progressed in 
the area of forest maps and cadastral mapping. While the original target of 
45% coverage of cadastral mapping had to be delayed to December 2021 
due  to  the  pandemic  and  other  technical  difficulties,  the  authorities  will 
submit  to  Parliament  a  bill  with  a  view  to  accelerating  the  collection  of 
the  remaining  rights,  scheduled  to  be  adopted  in  November  2020.  By 
October 2020, 35% of the cadastral maps have been completed. 

The authorities submitted on 23 October a final proposal for an anti-trust 
remedy  related  to  the  Public  Power  Corporation’s  lignite  generation, 
constituting  a  key  step  towards  fulfilling  this  specific  commitment. 
However, the Commission is still waiting for final authorisation from the 
authorities to start carrying out a market test of the proposed remedy, so 
that the measures can be implemented in the market in 2021.  

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State of play and next steps 

Energy. Launch the Target Model. 

(*)  HCAP.  The  Strategic  Plan  of  HCAP  will  be  implemented  on  a 
continuous basis. 

A major energy market reform was achieved as the Target Model, a mid-
2020 specific commitment, went live on 1 November, which is a big step 
towards Greece fulfilling the obligations of the EU energy acquis. 

The  authorities  are  in  the  process  of  updating  the  Ministerial  Guidance, 
which is expected to be finalised by end-2020. The strategic plan will be 
updated  following  the  issuance  of  the  Ministerial  Guidance.  The 
Corporation  and  the  state-owned  enterprises  are  carrying  out  the  next 
phase  of  the  implementation  of  the  Coordination  Mechanism:  the 
statement of commitments, which will set out the state-owned enterprises’ 
financial, operational and other objectives and are expected to be finalised 
by  December  2020.  The  review  of  the  boards  of  the  state-owned 
enterprises is close to completion. 

Privatisation. The Asset Development Plan will be implemented on 
a continuous basis.  

With  a  view  to  swiftly  attracting  investment  to  support  a  sustained 
transactions  on  Hellinikon, 
the 
economic  recovery,  complete 
HELPE,  marina  of  Alimos,  Egnatia,  DEPA  commercial,  regional 
ports  of  Alexandroupoli  and  Kavala,  AIA  shares,  EYDAP  and 
EYATH. 

The authorities continued their strong engagement and efforts to complete 
the  prerequisites  for  the  financial  closing  of  the  Hellinikon  transaction. 
Following the Council of State decision of 18 September, the way for the 
financial closing of the transaction has been  established. However, there 
are still some pending legal cases set for discussion in November 2020.  

Despite  some  technical  issues,  the  Marina  of  Alimos  concession  is 
expected to be financially closed before the end of the year.  

While  progress  on  the  pending  actions  necessary  for  the  Egnatia 
motorway concession has been slower than expected in  the past  months, 
the  authorities  have  recently 
the 
conclusion  of  this  transaction.  In  particular,  a  significant  number  of  toll 
stations  were  completed  and  put  in  operation  at  the  beginning  of 
November, and the Ministry of Infrastructure committed to putting all the 

taken  significant  steps 

towards 

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toll  stations  in  operation  before  the  commencement  of  the  concession 
agreement.  Additionally,  some  progress  was  made  over  the  past  two 
months  in  relation  to  the  required  works  necessary  for  the  licencing  of 
remaining 14 tunnels.  

Progress  was  made  on  a  number  of  other  ongoing  transactions.  This 
includes  the  transaction  of  the  Public  Gas  Corporation  –  DEPA 
Infrastructure,  for  which  the  Regulatory  Authority  for  Energy  provided 
clarity on the tariffs framework for distribution system operators, as well 
as  on  the  asset  perimeter  to  ensure  it  remains  a  cohesive  and  attractive 
asset.  The  phase  of  the  invitation  for  the  expression  of  interest  was 
concluded  in  October  for  three  regional  ports  and  the  underground 
natural gas storage South Kavala, attracting strong investors’ interest.  

Some transactions needed to be delayed following a significant fall in the 
assets’ capitalisation value due to the pandemic. This is in particular the 
case  of  Hellenic  Petroleum,  which  had  previously  already  suffered 
significant delays following the failure of the first tender in mid-2019, and 
the  Fund  now  considered  appropriate  to  delay  the  launching  of  the 
transaction  to  a  later  point  in  time.  Similarly,  the  sale  of  30%  of  Athens 
International  Airport  has  been  postponed  and  the  Fund  will  determine 
next steps once the situation improves, likely late in 2021.  

The modernisation of human resource management is progressing well as 
the  vast  majority  of  public  sector  entities  has  by  now  completed  their 
digital  organigrams,  an  end-2020  specific  commitment.  Until  end-
October,  more  than  80%  of  general  government  entities  had  completed 
their digital organigrams and the authorities expect that nearly all entities 
will complete this task by  end-2020. The preparation of job descriptions 

Public  administration.  Complete  the  integrated  HR  Management 
System (digital organigram for all public entities and link with single 
payment authority). 

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Legal  codification.  In view of enhancing legal  certainty  and access 
to  law  through  legal  codification,  adopt  the  Labour  Law  Code  and 
Code of Labour Regulatory Provisions. 

Justice. In the context of implementing the Three-Year Action Plan 
on  Justice,  implement  the  electronic  filing  of  legal  documents 
throughout the Courts, having completed the tendering procedure. 

and  the  establishment  of  links  between  job  description  and  jobholder  is 
also progressing which will allow for a connection to the Single Payment 
Authority by end of this year.  

With a view to enhancing legal certainty and access to law, the authorities 
are  preparing  the  codification  of  the  labour  market  legislation  and 
identified  further  areas  for  codification.  The  process  has  suffered  delays 
due  to  the  pandemic.  The  annual  codification  plan  for  2021,  adopted  by 
the Council of Ministers, includes an ambitious programme including on 
spatial  and  town  planning,  trading  of  goods  and  services,  collection  of 
public revenue and party financing. 

Steady progress has been made with the transition to mandatory electronic 
filing  and  processing  of  documents  throughout  the  Courts  and  work  is 
ongoing  regarding  the  distribution  of  electronic  signatures  to  judges  and 
members  of  the  legal  professions.  The  authorities  committed  to  submit 
shortly an action plan on e-filing-related initiatives, containing a mapping 
of  the  current  situation  and  detailing  planned  actions,  including  an 
implementation timetable. With regard to the electronic issuance of court 
decisions,  the  authorities  plan  to  distribute  to  all  courts,  by  the  end  of 
January 2021, a software developed for this purpose by the Piraeus Court. 
Further  progress  has  been  recorded  regarding  the  electronic  issuance  of 
court certificates.  

Justice. In the context of implementing the Three-Year Action Plan 
on  Justice,  complete  phase  II  of  the  establishment  of  the  e-justice 
system (OSDDY-PP). 

The evaluation of offers in the context of the tender for the second phase 
of  the  Integrated  System  for  the  Processing  of  Civil  and  Penal  Cases 
continues  and  the  authorities  confirmed  their  intention  to  award  the 
contract to the selected bidder in December 2020.  

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Complementary commitments undertaken by Greek authorities in May 2020  

Complementary commitment 

State of play and next steps 

Better  regulation.  Achieve  improvements  in  the  regulatory 
framework  for  doing  business  in  the  areas  of  construction 
permits,  obtaining  access  to  electricity,  registering  property, 
resolving  insolvency,  accessing  credit,  protecting  minority 
investors, contracting with  the government,  enforcing contracts, 
starting  a  business,  paying  taxes,  and  trading  across  borders  by 
mid-2021. 

Labour  law.  Improve  and  modernize  the  framework  for 
individual  labour  law,  including  tackling  the  issues  of  highly 
restrictive  overtime  rules,  unnecessary  sectoral  differentiation, 
white  collar/blue  collar  rules,  and  take  account  of  flexible  and 
home  working,  as  well  as  implement  these  measures  through 
secondary legislation, by September 2020. 

Justice.  Introduce  an action  plan for the creation of specialized 
court  chambers  for  specific  categories  of  cases  to  improve  the 
delivery of justice, particularly in areas of high economic impact, 
and introduce the adequate legislation by mid-2020. 

Work  continues  to  further  ease  doing  business.  In  addition  to  notable 
improvements in the frameworks of insolvency and dispute resolution, and an 
upcoming  reform  of  public  procurement,  the  authorities  improved  and 
accelerated  the  refund  process  for  the  value  added  tax.  Key  interventions 
scheduled  by  March  2021  aim  to  streamline  and  accelerate  administrative 
processes,  including  those  related  to  building  permits,  business  start-ups, 
electricity  connections,  and  registering  property.  Moreover,  with  technical 
support  from  the  Commission  provided  through  the  World  Bank,  the 
authorities are designing additional measures in key areas. 

The  government  has  presented  its  proposals  to  modernise  several  aspects  of 
the  labour  legislation.  The  legislation,  currently  under  consultation  with  the 
social partners, foresees substantial changes, modernising, amongst others, the 
rules  concerning  working  time  and  annual  leave,  employment  protection 
legislation, dismissals and trade union law. 

On  1  October  2010,  the  plenary  formation  of  the  Athens  Court  of  appeal 
resolved unanimously to form two special chambers to deal with cases in the 
fields  of  competition,  electronic  transactions,  energy  and  personal  data 
protection,  and  other  courts  are  expected  to  follow  suit,  following  the 
appointment  of  the  newly  elected  court  administrations  in  October  2020.  A 
progress  report  detailing  the  nest  steps  in  view  of  the  implementation  of  the 

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Complementary commitment 

State of play and next steps 

Justice.  Enact  the  new  Code  of  Judicial  Staff  and  present  a 
timetable for the adoption of the New Code for the Organization 
of Justice and the Status of Officers of the Courts by May 2020. 

Justice. Present an action plan for the Creation of a specialized 
‘JustStat’ unit for data collection and processing to measure and 
improve  the  performance  of  the  judicial  system  by  mid-2020; 
introduce the relevant legislation by June 2020. 

the  efficiency  of 

Public  administration.  Strengthen 
the 
personnel selection system through improving the capacity of the 
Supreme  Council  for  Civil  Personnel  Selection  (ASEP), 
including  in  the  areas  of  competition  procedures,  scoring 
classification procedures, temporary staff hiring procedures, and 
the Council’s organisation by end-2022.  

Public  administration.  Strengthen  the  hiring  control  of  the 
public sector through setting an annual ceiling of temporary staff 
by end-2020, which will be applied from 2021. 

legislation  on  special  chambers  in  civil  and  administrative  courts  will  be 
provided by December 2020. 

The  work  stream  on  improving  the  working  methods  in  courts,  which  is  an 
important  part  of  the  ongoing  justice  reform,  is  proceeding  as  planned.  The 
Code of Judicial Staff is set to be adopted in December 2020. The revision of 
certain sections of the draft Code on the Status of Judges and the Organisation 
of Courts will be entrusted to a law-drafting committee in January 2021 with a 
view to its adoption in time for the start of the next judicial year in September 
2021.  

The  launch  of  the  tender  for  the  ‘JustStat’  project  for  the  creation  of  the 
statistical information unit for judicial data is expected to take place by the end 
of December 2020. 

The authorities have finalised a law to further strengthen the Supreme Council 
for Civil Personnel Selection, which is expected to be published in November 
and adopted before end of 2020. 

The  authorities  are  working  on  establishing  an  annual  ceiling  on  temporary 
staff  by  end-2020.  In  an  effort  to  learn  from  past  lessons,  the  authorities  are 
documenting deviations from the hiring procedures and the unified wage grid, 
with  an  initial  focus  on  the  period  from  July  2019,  while  the  previous  years 
would be covered in the second stage. 

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Complementary commitment 

State of play and next steps 

Transport.  Revise  the  legal  framework  for  approving  the 
sustainable  urban  mobility  plans  according  to  best  European 
practices by September 2020. Following this revision, report on 
the  progress  of  the  elaboration  of  sustainable  urban  mobility 
plans for the main urban centres by October 2020. 

Management  of  public  real  estate.  Draw  up  a  holistic  and 
coherent strategy aiming to optimize the protection, management 
and  investment-oriented  exploitation  of  public  real  estate, 
including  all  organizations  involved  with  public  real  estate 
management,  without  prejudice 
their  mandates,  by 
September 2020. 

to 

Strategic  project  pipeline.  Fully  develop  a  Strategic  Project 
Pipeline  of  large  infrastructure  projects  with  the  objective  to 
better  coordinate  and  monitor  future  public  expenditures  and 
maximize  complementarities  between  private,  public  and  EU 
funded projects by January 2021. 

Project  preparation  facility.  Develop  and  fully  operationalize 
an  improved  support  and  delivery  mechanism  for  project 
preparation and implementation to ensure efficiency and quality 
of  both  public  sector  infrastructure  projects  as  well  as  Public 
Private Partnerships by March 2021. 

The  authorities  have  revised  the  legal  framework  for  sustainable  urban 
mobility plans according to best European practices. Following this revision, a 
report  on  the  progress  of  the  elaboration  of  sustainable  urban  mobility  plans 
for the main urban centres will be submitted by 15 November. 

The  authorities  intend  to  proceed  with  a  comprehensive  study  that  will  help 
them in the elaboration of a holistic and coherent strategy aiming to optimise 
the functioning of the Greek real estate market. Structural initiatives that will 
in turn improve the performance of publicly held real estate will be welcome, 
though  any  initiatives  will  need  to  be  consistent  with  the  independent  asset 
the  Hellenic  Corporation  of  Assets  and 
management  mandates  of 
Participations and, in turn, the Public Real Estate Company.  

The  Strategic  Projects  Pipeline  will  facilitate  the  selection  of  projects  of 
national  importance and will be coordinated at  the level  of the Presidency of 
the Government, outside the core structure of the line ministries.  

The  Project  Preparation  Facility  is  expected  to  accelerate  the  preparation  of 
projects  included  in  the  Strategic  Projects  Pipeline,  to  take  them  efficiently 
from  a  concept  stage  to  an  implementation  stage.  The  Facility  will  is  be 
established  within  the  Hellenic  Republic  Asset  Development  Fund,  where 
appropriate  safeguards  will  be  put  in  place  to  ensure  that  the  Fund  will 
continue to independently exercise its existing core mandate. The Facility will 
be supported by an international financial institution as a strategic partner. 

Public procurement. Adopt a new public procurement strategy  The authorities plan to adopt a major public procurement reform by the end of 

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Complementary commitment 

State of play and next steps 

for 2021–2025 by end 2020. 

E-Health.  Develop  an  electronic  Medical  Health  Record  to 
streamline 
the  use  of  existing  electronic  medical  record 
applications  and  update  as  necessary  the  design  and  use  of 
agreed  electronic  medical  record  standard  across  public  (and 
private) healthcare institutions by end-2020. 

the year. The reform builds on the experience with implementing the rules put 
in place in 2016 and aims to address, among others, the high observed number 
of single bid procedures or contracts awarded exclusively based on the lowest 
price offered. It also further streamlines the still lengthy award procedures. 

The  authorities  intend  to  exploit  the  potential  of the  e-medical  record,  which 
they deem as a key component of the new primary healthcare system. The e-
medical  record  is  not  fully  implemented  or  functional  as  of  now  but  is 
currently planned by mid-December. 

E-Health.  Extend  the  application  of  the  electronic  prescription 
project  (2nd  phase),  including  through  therapeutic  protocols, 
back-end  integrations,  artificial  intelligence  driven  inquiries, 
necessary 
information  systems,  and 
enabling  electronic  request  and  access  to  medicine  for  all 
outpatients with chronic diseases by end-2020. 

interconnection  with 

The authorities shared the most recent update of their Digital Health Strategy, 
which  envisages  actions  on  the  following  areas:  National  Electronic  Health 
Record  Network,  Cancer  Treatment  eHealth  Program,  Acute  Care  Digital 
Transformation, National Telemedicine Network National Expansion, On line 
Medical Appointment Scheduling System. No timeline was made available for 
these actions. 

Health  care  strategy.  Develop  a  National  strategic  policy 
framework for healthcare by end-2020. 

In  progress.  This  action  will  be  assessed  in  the  9th  enhanced  surveillance 
report. 

Health  care  planning.  Map  health  and  long-term  care  needs 
with available human and technical resources, and take measures 
to  ensure 
the  efficiency,  sustainability,  accessibility  and 
affordability  of  health  and  long-term  care  services,  as  well  as 
promote community-based services, by end 2020. 

In  progress.  This  action  will  be  assessed  in  the  9th  enhanced  surveillance 
report. 

Education.  Enhance  the  autonomy  of  higher  education  by 
strengthening  the  accountability  and  transparency  framework 

The  new  framework  for  the  operation  and  autonomy  of  the  higher  education 
institutions  is  under  preparation  and  will  be  completed  in  the  next  three 

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Commission Staff Working Document - Annex 

and  through  the  introduction  of  the  University  Council  by  end-
2020. 

Improve  vocational 

Education. 
the 
establishment  of  the  National  System  of  Vocational  Education 
and Training by end-2020. 

education 

through 

Introduce 

evaluations, 
internal 
Education. 
institutionalize  external  assessment  of  schools,  and  design  new 
curricula for all subjects across all school levels by end-2021. 

school-unit 

E-governance.  Develop  the  single  digital  portal  (gov.gr)  to 
integrate  all  electronic  transactions  for  citizens  and  businesses 
with the state and related information, unify the legal framework 
on digital policy, and safeguard business continuity by ensuring 
sufficiency of digital infrastructure mid-2021. 

months. The statute of the university councils will be re-established, whereas 
the  management  of  the  higher  education  institutions  will  be  overseen  by  the 
university  councils  that  will  give  directions,  approve  strategies  and  budgets, 
and monitor the administration of the universities. The accreditation of degrees 
is performed by the accreditation agency, the role of which was upgraded. 

The authorities have prepared the new draft law  on vocational  education  and 
training, which is expected to be adopted by December 2020. The vocational 
education and training reform will be fully deployed within a horizon of four 
years. 

Following  the  introduction  of  internal  evaluation  of  school  units,  reforms  in 
school education are giving a particular emphasis to soft skills, such as social 
empathy,  human  rights,  volunteering,  environmental  protection,  creative 
thinking, and road safety. 

The  authorities  are  on  track  with  the  implementation  of  the  roadmap  for  the 
development of the integrated transactions portal (gov.gr). The Code of Digital 
Governance was adopted on 22 September 2020. 

E-governance.  Implement  the National  Programme for Process 
Simplification 
the 
interoperability  of  registries,  data  and  IT  systems  to  ease  the 
administrative burden for businesses and citizens by end-2021. 

in  key  policy  areas  and  promote 

The  authorities  have  completed  the  set  up  for  the  National  Programme  for 
Process  Simplification,  which  aims  to  ease  the  administrative  burden  for 
citizens and businesses. The work on process simplification and digitalisation 
continues, notably in the areas of transport and justice. 

Digitisation of geospatial data. Develop a State Infrastructures 
Registry  to  encapsulate  technical  and  geospatial  information 

The  tender  for  the  digitalisation  of  geospatial  data,  which  is  an  ambitious 
reform to be rolled-outed within two years, namely for the development of the 

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Complementary commitment 

State of play and next steps 

about all public infrastructure projects to enable better planning 
and  management  of  these  projects,  including  for  construction 
and maintenance purposes by end-2021. 

Single Digital Map and the State Infrastructures Registry, was launched. 

Integrated 
Digitisation  of  geospatial  data.  Develop  an 
Geospatial  Data  Mapping  tool  (Single  Digital  Map)  to  increase 
transparency  to  investors  concerning  land  use  rules  across 
Greece  and  reduce  unpredictability  in  relation  to  investment 
licensing decisions by end-2021. 

See above. 

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