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European CommissionThe Second Economic Adjustment Programme for Greece. Fourth ReviewΡar /Ρagecontracting external work-out specialists).Action Deadline Comments StatusMoU3.7.8MEFP(32)MEFP(Table4)MoU3.7.9The BoG will: Require banks to submit by end-Novembera comprehensive operational plan that will address theshortfalls identified in the review.Banks to update their restructuring plans and submit themfor validation by DG-Competition (structuralbenchmark).While the Government is refraining from adopting new ormodifying existing debt restructuring schemes, undertakethe first assessment of the effectiveness of the FacilitationProgram within six months of its launch.3.8 Establishment of the Institution for Growth (IFG)MoU The Government intends to: Establish the IfG, a non-bank3.8.1financial institution, to catalyze private sector financing,MEFP(33) especially for SMEs, while minimizing fiscal risks.MoU3.8.2MEFP(33)MoU3.8.3MEFP(33)MoU3.8.4MEFP(33)MoU3.8.5MEFP(33)MoU3.8.6MEFP(33)To help address credit constraints while containing fiscalrisks, the IfG will: (i) provide debt financing for SMEs; (ii)provide equity capital to SMEs having significant growthpotential and to private equity and venture funds; (iii)provide debt or equity financing for infrastructure projects;(iv) where it provides debt financing, make such loansavailable only under co-financing arrangements withsignificant participation by commercial or cooperativebanks; and (v) lend and invest at market terms.the IfG will (vi) not take deposits and (vii) not acceptcapital contributions or other financing from domesticfinancial institutions owned or controlled by the publicsector, including HFSF; and (viii) limit any guarantees to alevel not exceeding the Hellenic Republic’s (HR’s) capitalsubscription.The HR will seek to become a minority shareholdereventually, with its own capital contribution limited to €350 million over the next three years.Shareholders other than the HR will have to agree on theappointment of the management of the IfG. The IfG boardwill have a strong international presence to ensure a highdegree of independence.Finally, overlapping functions between ETEAN and IfGwill be avoided, and such functions will be performed bythe IfG upon an HR request and subject to IfG investor'sapproval.3.9 Loan and Consignment FundMoU3.9.1MoU3.9.2MoU3.9.3The Government commits to: Ensure that the Loan andConsignment Fund is not crowding out competition in thefinancial sector.Ensure that the commercial sector part of the Loan andConsignment Fund will be in a gradual run-off. In thatrespect, the Government commits to revise the legalframework of the Loan and Consignment Fund bySeptember 2013 to provide that its commercial sector partwill not grant any new loans and will not take any newdeposits, except the roll-over of existing deposits.In consultation with the EC, to revise the legal frameworkof the Loan and Consignment Fund by September 2013regarding the scope of activities of the reserved sector partto ensure that it acts only in case of market failure.November2013September2013January 2014ContinuousSeptember2013September20134 Strengthening labour market institutions and promoting employment4.1 Reforms in the wage-setting systemThe Government adopts a law defining the decisionmakingmechanism for the statutory minimum wage thatwill prevail after the end of the Programme period once thecurrent freezes cease. This law will establish the procedurefor consultation with social partners, other stakeholdersand independent experts before the minimum wage is setMoU through a Ministerial Decision after the consent of the4.1.1Council of Ministers. It will also define how the conditions July 2013MEFP(36) of the Greek economy, notably its growth prospects,productivity and competitiveness levels, will be factoredinto the decision process in order to ensure that theobjectives of promoting and maintaining high employmentand reducing the high unemployment rates, and ofsafeguarding labour income, are achieved in a balancedway.MoU4.1.2Reviews the current structure of the minimum wage ratessystem, with a view to possibly improve its simplicity andeffectiveness to promote employability and fightunemployment and enhance the competitiveness of theeconomy.4.2 Reducing non-wage labour costsMarch 2014Operational plans have been submitted andpresented to EC/ECB/IMF.Restructuring plans have been submittedThe evaluation of the program will take place 6months after issuance of MD Ζ1-743/12.7.2013(ΦΕΚ 1731/Β/15.7.2013).OngoingThe action has been transferred to the new MoU.The action has been transferred to the new MoU.The mechanism of the statutory minimum wage hasbeen set with article 103 of law 4172/2013 FEK167-23/07/2013). It will be implemented on1/1/2017 when the current freezes cease.Observed.Observed.NotObserved.Observed.Ongoing.NotObserved.NotObserved.Observed.NotObserved.104
ANNEXΡar /ΡageMoU4.2.1MEFP(35)(Table4)MEFP(35)(Table4)MoU4.2.2MoU4.2.3MoU4.2.4Action Deadline Comments StatusThe Government adopts legislation reforming the systemof social contributions in a revenue-neutral way, inter aliaby broadening the base for contributions, simplifying theschedule across the various funds, shifting funds awayfrom nuisance taxes and onto contributions, and reducingaverage contribution rates by 3.9 percentage points fromtheir current levels, which will be phased in over 2014,2015 and 2016 (structural benchmark).To reduce the costs of doing business, we will eliminate ortransfer nuisance taxes and levies (and the associatedspending) to the state budget (structural benchmark).As intermediate steps, studies of possible changes in thesystem of social contributions will be carried out andaction plans proposed.Carries out studies of first-pillar pension schemes incompanies where the contributions for such schemesexceed social contribution rates for private sectoremployees in comparable firms/industries covered in IKAand presents options for the reduction of socialcontribution rates.Based on these studies of first-pillar pension schemes, andtogether with the reform of the system of socialcontributions, reduces the rates mentioned in the previousentry that are found to be too high and adjusts benefits in afiscally-neutral manner.4.3 Lowering compliance costs, fighting undeclared work and informalityMoU4.3.1MoU4.3.2MEFP(36)To help formality in labour arrangements by reforming theLabour Inspectorate and streamlining the administrativeburden to foster compliance, the Government strengthensthe fight against undeclared work and raises theeffectiveness of the Labour Inspectorate. Prioritising theactivities of the Inspectorate and fostering the detection ofthe most severe cases of labour law violations are expectedto be at the core of those changes.November2013September2013September2013September2013December2013ContinuousRevises the sanctions for violations of the labour law. July 2013The Greek side submitted its final proposal about thereduction of SSC to EC/ECB/IMF at 22.1.2014.EC/ECB/IMF asked for more details andclarifications which were sent on 14.2.104.Discussion was made at GAO at 26/2, whereEC/ECB/IMF asked for data in order to evaluatecertain parts of the Greek proposals.The cut will be made effective July 1st 2014, L.4254/2014 art. article 1, par. IA3, GG A/85/7-4-2014.Troika assessed GAO's revised proposal asunsatisfactory and asked for the broadening of thosenon reciprocating charges for immediate abolition aswell as the submission of a strict and specifictimeline for the action implementation (roadmap).Recent data were sent to troika on 28/2.The Greek side submitted its final proposal toEC/ECB/IMF at 22.1.2014. EC/ECB/IMF asked formore details and clarifications that were sent at 14 ofFebruary. Final assessment is pending.There will be a cut after all.The National Actuarial Authority has alreadycompleted the necessary studies and have submittedthem to the Minister.In progress. Actuarial studies have been completedand have been submitted to the Minister.Under discussion.There is constant effort to enhance the role of SEPEwhich includes among others the mandatoryreporting through the IT system 'ERGANI' and thecooperation with Economic Police and the inspectorsof IKA. In addition, an Action Plan has beencomposed by I.L.O. about the strengthening andoverall improvement of SEPE. A frameworkagreement is about to be signed. There is also arequest from Ministry 's side for new hirings ofauditors so that the fighting against undeclared workbecome more effective.MD 27397/122/19.8.2013 provides for severepenalties for undeclared work and violations of thelabour code.NotObserved.Pending.Pending.NotObserved.Observed.NotObserved.Observed.Ongoing.Observed.MEFP(36)Complete a comprehensive review of labour reportingrequirements.July 2013The review that includes labor requirements hasbeen completed.Pending.MoU4.3.3MEFP(36)MEFP(36)MEFP(36)MEFP(36)Streamlines the reporting by employers and employees.To attract investment, support job creation and growth, andsafeguard the right to work, we will complete a study fordiscussion at the next review, comparing Greece’sregulations on temporary employment, scope of temporaryemployment agencies, and collective dismissal rules andprocedures with those in other EU member states.Drawing on this review (on temporary employmentagencies), we intend to identify any appropriate reformsneeded to bring our legal and regulatory framework inthese areas into line with EU best practices. On this basis,we will prepare, in consultation with social partners, adraft set of reforms by end-November.Implement the set of reforms discussed with socialpartners.September2013September2013November2013December2013The social dialogue has been completed.Ministry of Labour submitted results toEC/ECB/IMF. It also sent its proposals and timelinesabout changing reporting standards and fightingbureaucracy. A draft MD that simplifies theprocedure of reporting to IT system ERGANI hasbeen submitted to EC/ECB/IMF.There are two subparagraphs (IA5 & IA6) at theL.4254/2014 (FEK 85) that will simplify proceduresand reduce red tape.M.o.L. sent drafts M.D. to troika and we await forfinal decisions. It is highly probable to reach anagreement. Collective dismissals issue is underdiscussion. Greek side has sent to troika theDecision of Supreme Labour Council as well as theFEK of competency change for signing collectivedismissals from Minister to S.G.It has been agreed that there will be a newassessment for collective dismissals from troika at 6months' time. For TEA there is agreement at the l.4254/2014 (IA4).Under discussion with troika. As far as temporaryemployment agencies are concerned, an agreementis underway. Collective dismissals issue is hoped tobe solved with all the measures that have been takenso far from the Ministry.It has been agreed that therewill be a new assessment for collective dismissalsfrom EC/ECB/IMF at 6 months' time. For TEA thereis agreement in l. 4254/2014 (IA4).Under discussion with troika. We wait for finaldecisions.It has been agreed that there will be a newN/APending.Pending.Pending.Pending.105
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OUTLINE OF THE REPORTEXECUTIVE SUMM
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LIST OF GRAPHSGraph 1. Economic cli
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ACKNOWLEDGEMENTSThe report was prep
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