Task Force for Greece second quarterly report - guide15 March 2012
by eub2 -- last modified 15 March 2012
The European Commission's Task Force for Greece has presented its second report on the EU support to Greece. It was created to help Greece implement its challenging reform agenda, which is designed to return to growth and create jobs. The Task Force was set up by by EC President Barroso in July 2011. This second report describes progress made in accelerating Greece's absorption capacity of EU funds (above EU average) and in setting up and implementing technical assistance (TA) to Greece in nine key areas with the support of around twenty Member States, the Commission and the IMF.
1. What is the mission of the Task Force for Greece?
The Commission's Task Force for Greece (TFGR) was created and designed to help the Greek authorities to deliver reforms and growth in the coming years, in line with the programmes agreed between Greece, the EU and the IMF.
Since its creation by President Barroso last July at the request of the Greek government, and starting its operation in September 2011, the TF has been active on two major tasks:
(1) to identify and coordinate the technical assistance from Member States that Greece needs to deliver of the EU/IMF/ECB adjustment programme. Now that the assessment is done, it is time to match the needs with the expertise offered by many Member States and others such as IMF on a broad range of issues such as tax collection, land registry, health system modernisation, administration reform and capacity building, privatisation process, a better business environment.
(2) to accelerate the absorption of EU funds to boost growth and employment enhancing projects. Refocussing EU money available on about 181 key growth-enhancing projects has been the main priority. Next step will focus on the channelling of the available funds towards these projects.
2. Which areas are covered by the Task Force?
The TFGR is working in the following 9 areas, in line with the Economic Adjustment programme and Memorandum of Understanding (MoU) agreed with Greece, EU, ECB and IMF, and after consultation with Greek authorities and Member States. These areas are therefore the most pressing and crucial reforms to deliver to help Greece future development.
Cohesion Policy Programmes , environment and transport
Budget and taxation
Financial sector / access to finance
Business environment (public procurement and competition)
Administrative reform / e-government
Justice and home affairs
Privatisation and completion of public works
3. Very little has been achieved so far. Is this another bureaucratic structure?
Over the past six months,
The first priority for the Task Force has been to identify the many ongoing projects supported by EU funds, but stopped due to the lack of financing by the Greek authorities. Key growth enhancing projects have also been listed, and the reprogramming of a substantial part of EU funds towards these projects is underway.
The second priority for the Task Force has been to establish sound cooperation and good working relationships with the Greek authorities. This has lead to a clear set of requests from the Greek authorities for technical assistance. Meanwhile, the Task Force has succeeded matching these needs with technical assistance provided by Member States, in key areas.
4. But concretely, what has the Task Force achieved so far?
First of all, EU funds – one of the very few sources of growth financing presently available in Greece – are being better targeted and spent.
The Task Force and the Greek authorities are refocusing an important part of the €20.4bn available for Greece in the EU cohesion policy funds. Particular effort is being put on advancing 181 growth enhancing projects which have been appropriately identified. Main examples: 5 highway concessions (1.400km and 30.000 potential jobs) and support to SMEs.
Greece has improved its absorption of EU funds, reaching 35% (above EU average for this point in the programming period) and reaching more than 98% for payment claims of the Memorandum of Understanding annual target for 2011.
Secondly, unprecedented technical assistance has been provided by nearly 20 Member States, Commission and IMF over the past six months. More is expected in the course of the year. This concrete expertise is contributing to the modernisation of the Greek economy and public administration. There are many positive developments upon which further provision of technical assistance will be able to build:
Already €946m was collected in tax arrears compared to initial target of €400m.
Backlog of tax cases pending in court has been reduced by 15% in 4 months (should be reduced by 80% by end 2012).
France and Germany are supporting a major administration reform of central and local government: creation of inter-Ministerial coordination by May 2012, assessment of civil servants' competences since January, ICT and human resources horizontal structures in Ministries since February…
Liberalisation of access to and exercise of regulated professions was adopted in February with TF assistance.
5. Are you setting up a shadow government in Greece?
This is nonsense. The Task Force for Greece has no executive powers and cannot impose any legal or financial decision upon Greek government. It is there to support Greece in implementing the reforms agreed with the COM, the ECB and the IMF, and adopted by its Parliament. We are working for Greece with the Greeks!
6. How does the Task Force work with the EU/IMF/ECB Troïka?
The Commission Task Force complements the work achieved by the Troïka. The latter has been working with the Greek authorities to identify the key structural reforms to be implemented in Greece, and subsequently in the surveillance of the implementation on a quarterly basis.
The Commission Task Force is there to help Greece implementing these reforms, by pulling technical assistance from Member States and streamlining the use of EU funds. The TF report monitors the concrete progress made on these two dimensions.
Commission staff in the Troïka and the Task Force report to VP Rehn to ensure consistency.
7. How many people work for the Task Force?
The Task Force is based in Brussels with a permanent presence in Athens. It includes around 45 staff (out of which 15 are located in Athens). Most of them are Commission officials. The Task Force is headed by Horst Reichenbach, special Adviser to the President. The coordination of technical assistance is done through High-Level Coordination meetings on a regular basis in Brussels (last meeting on 6 March).
There is also a number of Seconded National Experts, recruited from France (2), the United-Kingdom (2), Germany (2), the Netherlands (2), Belgium and the Czech Republic. Further recruitments (Austria, Sweden) are in the pipeline. Other Member States have expressed their possible interest in sending experts. Secondments are at this stage for one year.
8. Last month, the Eurogroup invited the Commission to increase the size of the Task Force. What are Commission's plans?
As the second Economic Adjustment Programme for Greece puts even more the emphasis on enhancing growth, employment and competitiveness than the first one, the contribution of the Task Force will be even more important.
The Commission will decide soon how to reinforce its support capacity on the ground in close coordination with the Greek authorities.
9. What is the Technical Assistance about?
TA is meant to bring expertise on key areas where the expertise or the practical experience is missing in Greece. Many Member States have volunteered to send national experts for shorter or sometimes longer periods to support TA projects. IMF also provides expertise. The Task Force is there to coordinate this expertise and ensure it matches with the concrete needs. In several cases, the Task Force is – sometimes together with other Commission services – providing the TA itself.
10. Who pays for TA?
These experts, who are usually staying for a limited period of a few days in Greece, are being paid by their Member States. The Commission only covers their mission expenses.
11. How does the Technical Assistance work in concrete terms?
TA needs are mainly grouped according to concrete policy domains (budget and taxation; financial sector; cohesion funds and agriculture; business environment, public procurement and competition; labour market, public health, justice and home affairs; administrative reform, e-government, statistics; civil society and social partners).
Where a request is retained, the Task Force assists in defining a work programme containing clear deliverables and intermediate milestones which are agreed with the Greek authorities. The Task Force also helps the Greek authorities to mobilise the inputs that are needed to implement the TA work programme (relevant expertise from other Member States, and European or international organisations).
TA can be provided in the following ways:
short-term expert missions or workshops where national administrations present their solutions to their Greek counterparts. This should allow the Greek authorities to identify the most appropriate solution to their needs.
more sustained support from particular Member States or organisations with specialised know-how. This could involve longer-term presence of experts or cooperation with the Greek authorities to provide technical solutions in areas like ICT.
In some instances, a Member State with strong track record in a policy field may assume the responsibility of 'domain leader'. The domain leader may be involved at an early stage of the project, including in the definition of road-maps. In these instances, the TFGR facilitates ongoing cooperation between the Greek authorities, the domain leader and other TA providers.
The matching of TA supply and demand is organised through quarterly high-level coordination meetings organised by the TFGR and involving the Greek authorities, (potential) TA providers and European Commission services. Prior to these meetings, Member States or other international organisations are requested to express their interest in providing technical assistance on particular projects.
12. Could you give concrete examples of Technical Assistance provided by Member States?
The TFGR has launched projects in agreement with the Greek administration. Concrete work strands have so far been agreed in the areas of
Tax administration, with a joint IMF/EU (DG TAXUD and TFGR) action plan, already supported by a number of Member States (Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, The Netherlands, Portugal, Spain, Sweden),
Public financial management, especially expenditure control,
Administrative reform (with France at the central and Germany at the regional level as the respective domain leaders).
Germany has also agreed to be domain leader in the health sector, where concrete work still needs to be decided.
Several work strands on the business environment are under discussion, where the TFGR will itself in many cases assume the role of domain leader.
Coordination is done through quarterly high-level coordination meetings organised by the TFGR and involving the Greek authorities, (potential) TA providers and Commission services. Prior to these meetings, Member States or other international organisations are requested to express their interest in providing technical assistance on particular projects
The Task Force quarterly report gives an overview of the expertise mobilised and assesses progress on the ground.
13. How much EU money is available for Greece? And is Greece using this money in an efficient way?
The EU has allocated through its Structural Funds €20 billion for Greece in the period 2007-2013 of which almost €8 billion has already been paid. For the rest of the programming period, around €12 billion remain unspent, even if in many cases it is already committed for projects.
This money – or part of it – could be used to boost Greek growth potential through targeted projects, specifically designed to support SMEs, fight against unemployment, and key infrastructure development. A list of 181 priority projects was identified with the Greek authorities and published in November 2011. These projects accounting for 56% of available funding over the programming period, will be the focus of intensive monitoring and support by the Greek administration and the Commission.
Finally, it is important to note that the good track record of Greece when it comes to absorption capacity of the funds. By the end of 2011, Greece has absorbed 35% for the 20.4bn€ EU funds, which exceeds the EU average of 33.5%. This good performance is observed for Regional Funds (39.6% for EL and 34.6% for EU), and Cohesion fund (29.2% for EL and 28.5% for EU). In the case of Social Fund, 24.4% of Greek allocation was absorbed compared with an EU average of 27%.
14. What is the content of the second report?
The report outlines how the TFGR organises and coordinates the provision of technical assistance as well as identifies possible additional areas where technical assistance may be needed in the future.
The report draws lessons from the first six months of the TFGR operation. One major chapter of the report is devoted to the use of cohesion funds to support growth and job creation. In the chapter on the acceleration of cohesion policy projects, the report presents a number of positive developments as well as remaining challenges. It describes encouraging progress with the 181 priority projects and provides an update on the status of the politically and economically important highway concessions. It also presents the forthcoming Risk Sharing Instrument.
Under access to finance / financial sector the report gives an overview of the significant resources available for SME funding. It presents ongoing work to address the liquidity challenges of Greek domestic banks and defines forthcoming new instruments that could stimulate SME's' access to finance.
The second pillar of the report outlines the technical assistance to support the structural reforms that are foreseen by the Economic Adjustment Programme as a pre-condition for restoring future growth and competitiveness.
The budget and taxation section reports on progress achieved, such as success in the collection of past tax arrears. It also identifies areas where more progress needs to be made, such as collection of tax from wealthy taxpayers. It describes efforts to implement a comprehensive tax administration action plan, drawing on significant support from Member States, the IMF and Commission services. Efforts in the field of anti-money laundering are described, where better coordination between the different Greek players is critically needed. Further progress is also needed in respect of Public Financial Management, notably concerning expenditure control.
Under reform of the public administration and e-government the report notes good progress. The Greek government has established a steering group under the Prime Minister's authority. Substantial TA is being delivered by French authorities who are leading work on central government administrative reform. Parallel reform of decentralised, regional and local government level is also progressing with German support.
With regard to structural reforms to improve the business environment, preparatory work for TA in areas such as the facilitation of exports, overhaul of public procurement law and administration, regulated professions and regulatory simplification is advancing. A number of technical assistance projects are pending final agreement from the Greek authorities.
Public health is another area where many TA needs and possible TA providers have been identified. Technical assistance will focus on the pricing of pharmaceuticals, better management of consumption of healthcare services and products, and the health care environment. On this last point, TA will be provided for the set up of the integrated sickness fund.
Similarly, progress has been made with the reform of the judicial system. Initial reviews involving the Greek administration and potential TA providers allowed for the identification and partial launch of TA in areas such as the acceleration of judicial proceedings, the backlog of tax cases in courts and out-of-court dispute settlements.
With concrete work already under way regarding migration, asylum and borders, some of the TA needed for example for the implementation of the 2010 Greek Action Plan on migration and asylum still has to be matched by possible TA offers.
Under all headings, the contributions of TA providers, including the frequently vital contributions of other Commission services are described. In an annex, the report also describes the state of play of technical assistance projects as well as the Member States and organisations involved.
Source: European Commission