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Memorandum of Understanding on Specific Economic Policy Conditionality17. Publish monthly indicators to monitor performance of the fresh start and basic instalmentschemes. The indicator will include information about the number of taxpayers and theassociated debt that have dropped out of the schemes and about the reminders and about theenforcement measures undertaken against them (continuous).2.3.4. Management of the Public Revenue Service1. The Secretary General of Public Revenue ensures that all staff is assessed for itsperformance on a quarterly basis under the new assessment system (continuous).2. The Secretary General of Public Revenue replaces managers who do not meet performancetargets (continuous).3. The Secretary General of Public Revenue makes full application of the paragraph 21 of 55of law 4002/2011 to rotate the managers mentioned in the law, for those managers in placefor more than three years (continuous).4. The Authorities update at least monthly the website used for publication of summarystatistics on key performance indicators, the number of tax evasion cases sent to prosecutionby the tax administration (continuous).5. The Authorities issue an explanatory circular that clarifies the personal liability of tax andcustoms staff and management consistent with the existing legal framework (April 2014).6. The Secretary General of Public Revenue (June 2014):i. Defines the criteria for a risk-based approach to selection for audit of SecretariatGeneral of Public Revenue managers and officials;ii. Revises audit standards to ensure appropriate documentation to justify individuals’assets.2.4. Public Financial Management ReformsSince the inception of the adjustment programme Greece has made significant progress in PublicFinancial Management (PFM). Developing a solid public financial management framework is key incontrolling expenditures and thus being able to achieve fiscal targets. The Government is committed toenacting targeted reforms for strengthening the framework both within the General Accounting Office(GAO) and line ministries.Prior to the disbursement the Authorities will:a. Adopt legislation permitting the Debt management office to conduct various marketoperations. Adopt legislation to amend Law n. 2469/1997 on the Common Capital Fund toallow the Bank of Greece, in its capacity as the administrator of funds belonging topublic sector entities, and PDMA entering into repo transactions with respect to generalgovernment securities held by the latter, in compliance with the monetary financingprohibition.b. Adopt legislation permitting the Debt management office to conduct various marketoperations. Adopt legislation allowing PDMA acting on behalf of the Hellenic Republic toissue, manage, settle and then “hold in treasury” securities which can solely be sold in repotransactions with all SSFs and EBFs or be pledged as collateral with financial institutions forrisk management transactions falling with the PDMA’s hedging mandate. The contractsrelated to these operations should clearly specify that the securities cannot be further traded bythe counterpart for the duration of the contracts and that settlement and payments should bedone by the PDMA.c. Amend article G10 of law 4152/2013, to make it fully compliant with Article 10 of theLate Payments Directive.d. Submit to the Parliament an amendment to article 1 of Law 3068/2002 to remove theprohibition provided therein of obtaining an enforceable title against Greek State-bodies164 and bodies governed by public law in Courts.
Memorandum of Understanding on Specific Economic Policy Conditionality2.4.1. Monitoring and reportingIn this area, the Authorities have undertaken important reforms which include monitoring expenditureacross different public entities, as well as in local Governments and state-owned enterprises, andputting in place corrective mechanisms for ensuring that the budget is executed in an orderly mannerand expenditure is kept under control. Commitment registries are now established in all generalgovernment sub-sectors covering 97 per cent of entities and reporting on the e-portal. Line ministrieshave now established General Directorates of Financial Service (GDFS), embedded in each lineministries, which are responsible for the sound fiscal management and Accounting Officers have beenappointed. Despite all these significant achievements GAO's support to GDFS could be furtherstrengthened.The Government will:1. Identify other areas of operational expenditure where real time monitoring mechanismscould be introduced or strengthened (continuous).2. Enhance the monitoring system for the budget execution of Extra Budgetary Funds withexpenditure below 20 million and above 10 million to be effective from May 2014.3. Establish a new legal framework for appointment procedures of Accounting Officers withinthe general regime for the public administration (June 2014).4. Fully staff the GDFS line Ministries (June 2014).5. Strengthen the support of GAO budget directorate to line ministries' GDFS throughestablishing a specialized unit in GAO to support Accounting Officers and their staff in theunits (April 2014) and set-up a GAO capacity building program to provide guidance andsupport to GDFS staff in carrying out their responsibilities (June 2014).6. Build-up sectorial expertise in GAO to support the achievement of fiscal targets in all subsectorsthrough:i. Defining the terms of reference of a qualified working group in GAO withappropriate competences to coordinate with the senior management theimplementation of ongoing PFM reforms (April 2014) and make this group fullyoperational through a Ministerial Decision (June 2014).ii. Setting-up of a capacity building program for policy analysis (June 2014).iii.implementing of this program for a spending review of policy areas that cover asignificant percentage of overall public spending subject to an assessment of thequalified working group and following consultation with EC-ECB-IMF (December2014).2.4.2. Payment flows and clearance of arrearsOne important area where significant progress must be made is in preventing the build-up of arrears,both on the tax and expenditure sides. Greece has transposed the Late Payment Directive aiming atrestoring normal lending to the economy. However the compliance with the Late Payment Directivehas not fulfilled yet. Article G10 of the transposition law is not in line with Article 10 of the Directiveas it does not guarantee that an enforceable title for unchallenged claims is obtained within 90 calendardays adding any procedural delays. Article 20 of Law 3301/2004 that is still in force established thatan enforceable title cannot be used against Greek State bodies and bodies governed by public law inCourts. This provision is clearly not in line with Article 10 of the Directive. The same provision issubject of an open infringement against Greece since 2009. Furthermore the implementation of theDirective requires payment of invoices within 30 days in principle, or 60 days in exceptional cases. InGreece the transposition and implementation of the Directive is particularly challenging, as existingpayment processes are extremely slow, encumbered by excessive layers of control and hampered bylack of automation.165
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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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European CommissionThe Economic Adj
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1. INTRODUCTION1. INTRODUCTION1. Th
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2. MACROECONOMIC AND FINANCIAL DEVE
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2. Macroeconomic and financial deve
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Chart 3Graph 2.3. Exports of goods
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Chart 17Graph 11.1 labour reform in
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Chart 18Graph 13.1. Distance to Fro
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4. DEBT SUSTAINABILITY ANALYSIS AND
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4. Debt sustainability analysis and
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4. Debt sustainability analysis and
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OCCASIONAL PAPERSOccasional Papers
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No. 46No. 47No. 48No. 49The Western
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No. 80 2011 Pre-accession Economic
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No. 119No. 120No. 121No. 122Possibl
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No. 1582013 Economic and Fiscal Pro
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