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European CommissionThe Second Economic Adjustment Programme for Greece. Fourth Review29. The mission urged the authorities to timely deliver all programme commitments and to startworking towards identifying areas, where further improvement can take place, therebysupporting the fiscal adjustment. Given that the expected gains from the re-organisation of therevenue administration are assumed to contribute to the fiscal consolidation, a timely delivery of thereforms on this front is crucial. Moreover, despite the significant improvements having been made sincethe start of the programme, there are still areas where significant efficiency gains can be made, throughfurther streamlining of the public sector and reviewing spending envelopes. The authorities are startingwork toward a comprehensive VAT reform to be introduced in 2015 and will in the coming monthsreview the existing VAT policy and administration (see section 3.2.2. Tax policy reform and Box 6).Furthermore, a review of social security policies is being initiated to improve targeting, fairness, andefficiency. The authorities are also starting work on consolidating pension fund administration with aview to ensuring that the consolidated system is actuarially balanced in the next decades. Thediscussions of the concrete proposals will take place in the context of the 2015 budget preparation in theautumn.30. The projections for 2016-17 are inherently uncertain. A key issue is the impact of structural reformsand economic recovery on tax and spending aggregates. Tax revenues could rebound significantly morethan assumed in the baseline projections once the economy recovers and the liquidity situationimproves. This will be contingent on continued resolute implementation of the on-going reforms of thetax and social security revenue administrations. On the other hand, any severe delays in programmeimplementation may result in a widening of the fiscal gap, thereby leading to higher needs for savingsin other areas.Table 4. Medium-term fiscal projectionsIn % of GDP 2012 2013 2014 2015 2016 2017General government balance -6.4 -3.2 -2.9 -2.1 -0.7 -0.7Primary balance -1.3 0.8 1.6 3.0 4.5 4.5Note: the fiscal numbers in the table are consistent with programme definitions as laid out in theTechnical Memorandum of Understanding (TMU). The main differences compared with the ESA-95definition are the exclusion from the programme definition of ANFA and SMP profit transfers, mostsales of non-financial assets, and costs related to bank resolutions and recapitalisations.Source: European Commission services3.2. STRUCTURAL REFORMS WITH BUDGETARY RELEVANCE3.2.1. Privatising to boost efficiency in the economy and reduce public debt31. Progress has been made in completing privatisation deals. Following the completion of theprivatisation transactions for State Lotteries (EUR 133 million) and OPAP (EUR 622 million), theauthorities are moving forward with the certification process of the gas transmission operator (DESFA),which has been adjudicated for around EUR 187 million. Additional transactions in the pipeline includethe railway operator (Trainose), the rail service provider (Rosco) and regional airports. The preferredinvestor was selected for the acquisition of the shares in the landmark real estate project Hellinikonafter it improved its financial offer significantly (EUR 915 million). A successful conclusion of thetender would imply that the consortium undertakes an investment of EUR 5.7 billion (over 2.5% ofGDP) over the coming years, out of which EUR 1.25 billion correspond to the necessary infrastructurecosts and the metropolitan park, which will be exclusively assumed by the company. The transaction forthe sale and lease-back of 28 buildings is expected to be completed in the second quarter 2014following a delay in the approval of the deal by the Court of Audit.32. As the preparation of key assets for privatisation is advancing and the majority of state-ownedenterprises have now been transferred to the privatisation fund, the focus is now on designing andimplementing appropriate arrangements to ensure appropriate regulation and oversight. Thisincludes setting up a strong regulator for ports, to oversee the market after the privatisation of a largearray of ports, in particular those of Piraeus and Thessaloniki. The authorities strengthened the26