Council Decision of 4 December 2012 amending Decision 2011/734/EU addressed to Greece with a view to reinforcing and deepening fiscal surveillance and giving notice to Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive deficit (2013/6/EU)

Article 1 U.K.

Decision 2011/734/EU is hereby amended as follows:

(1)

Article 1 is replaced by the following:

‘Article 1

1. Greece shall put an end to the present excessive deficit situation as rapidly as possible and, at the latest, by the deadline of 2016.

2. The adjustment path towards the correction of the excessive deficit shall aim to achieve a general government primary deficit (deficit excluding interest expenditure) not exceeding EUR 2 925 million (1,5 % of GDP) in 2012, and general government primary surpluses of at least EUR 0 million (0,0 % of GDP) in 2013, EUR 2 775 million (1,5 % of GDP) in 2014, EUR 5 700 million (3,0 % of GDP) in 2015 and EUR 9 000 million (4,5 % of GDP) in 2016. These targets for the primary deficit/surplus imply an overall ESA-government deficit of 6,9 % of GDP in 2012, 5,4 % of GDP in 2013, 4,5 % of GDP in 2014, 3,4 % of GDP in 2015 and 2,0 % of GDP in 2016. The debt-reducing measures to be implemented in December 2012 could reduce interest payments by up to 1 % of GDP. These numbers could be estimated to translate into an improvement in the cyclically-adjusted primary balance to GDP ratio from 4,1 % in 2012 to 6,2 % in 2013 and at least 6,4 % of GDP in 2014, 2015 and 2016 and into a cyclically-adjusted government deficit to GDP ratio at – 1,3 % in 2012, 0,7 % in 2013, 0,4 % in 2014, 0,0 % in 2015 and – 0,4 % in 2016, reflecting the original profile of interest payments. Proceeds from the privatisation of financial and non-financial assets, transactions relating to bank recapitalisations, as well as all transfers related to the Eurogroup decision of 21 February 2012 with regard to income of euro zone national central banks, including the Bank of Greece, stemming from their investment portfolio holdings of Greek Government bonds shall not reduce the required fiscal consolidation effort and shall not be counted in the assessment of these targets. The same applies to any payments from loss-making banks beyond those which would accrue from the ELA guarantee fee structure existing on 30 September 2012.

3. The adjustment path referred to in paragraph 2, taking into account the impact of debt-reducing measures to be implemented in December 2012, would be consistent with a general government consolidated debt ratio to GDP of below 160 % in 2016.’;

(2)

in Article 2, the following paragraph is inserted:

‘10a. Greece shall have adopted the following measures by 4 December 2012:

(a) the budget for 2013 and the MTFS through 2016, as well as the measures as described in Annex IA to this Decision and the respective implementing legislation. The MTFS shall elaborate on the permanent fiscal consolidation measures which ensure that the deficit ceilings for 2012-2016, as established by this Decision, are not exceeded and that the debt-to-GDP ratio is put on a sustainable downward path;

(b) the presentation of an updated Privatisation Plan to the Greek Parliament and the publication of a semi-annual update of the Asset Development Plan;

(c) the transfer to the portfolio of privatisation assets of the HRADF of the full and direct ownership (shares or concession rights) of Egnatia Motorway and the regional ports of Elefsina, Lavrio, Igoumenitsa, Alexandroupolis, Volos, Kavala, Corfu, Patras, Heraklion, and Rafina;

(d) ensuring the line Ministries and other relevant entities provide the General Secretariat for Public Property with full access to the inventory of all real estate assets owned by the State;

(e) the amendment and/or the repeal of statutory provisions of State-owned enterprises (PPC, OLP and OLTH port authorities, HELPE, EYATH and EYDAP, ports, etc.) that diverge from private company law regarding any restrictions on voting rights of private shareholders;

(f) legislation to define the role and qualifications of the Secretary-General of the Tax Administration and for the Minister of Finance to delegate decision-making powers to the Secretary-General of the Tax Administration;

(g) the deployment of experienced tax auditors towards activities serving the immediate revenue imperatives, by strengthening and making fully operational key enforcement areas such as the large taxpayer unit by transferring 100 auditors from other duties, and by establishing a single functional unit for high-wealth individuals and high-income self-employed persons and staffing this unit with 50 experienced tax auditors directly accountable to the Secretary-General of the Tax Administration;

(h) a Council of Ministers act (replacing the Council of Ministers act adopted on 29 October 2012), aiming at strengthening budget execution and enhancing sound fiscal management, and including, beyond the provisions in the original Council of Ministers act, additional provisions: (i) establishing that Memoranda of Cooperation are signed by end-December of each year between the Ministry of Finance and the other Ministries or between the Ministries and managers of the supervised entities (thus covering the entire general government); (ii) strengthening the current balanced budget constraints for local governments in order for them to be more effective, including corrective and sanctioning mechanisms; (iii) strengthening the current monitoring system for State-owned enterprises (SOEs) and introducing an enforcement mechanism in case of deviations from the specific targets identified for each SOE; and (iv) setting the framework for defining specific targets for the coverage of operational commitment registers for local governments and SOEs to be established by December of each year. That Council of Ministers act shall also include mechanisms for correcting transfers from central government to address deviations from targets within the year and possibly in the following years, while ensuring that arrears are not increasing; it shall make explicit that the proceeds from the privatisation of government assets are paid directly into a segregated account to monitor cash flows, avoid diversion of official financing and secure a timely debt servicing; and it shall set automatic cuts in expenditure to be applied as a rule when targets are missed, while ensuring that arrears do not increase;

(i) a set of measures to improve the current financial situation of the National Organisation for Healthcare Provision (EOPYY) and ensure that budgetary execution is closer to a balanced budget in 2012 and 2013, including: (i) streamlining the benefit package; (ii) increasing cost-sharing for healthcare delivered by private providers; (iii) negotiating price-volume agreements and revising case-mix agreements with private providers; (iv) revising the fees for, and number of, diagnostic and physiotherapy services contracted by EOPYY to private providers with the aim of reducing related costs by at least EUR 80 million in 2013; (v) introducing a reference price system for the reimbursement of medical devices; and (vi) progressively increasing the contributions paid by OGA members to the average of those paid by other members of EOPYY;

(j) the following measures relating to the reimbursement of medicines: (i) legislation to control pharmaceutical spending that activates contingency measures (including e.g. an across-the-board cut in prices), if for any reason the existing automatic claw-back mechanism is not sufficient to achieve the target; such measures shall produce an equivalent amount of savings; (ii) a ministerial decree, setting the new claw-back threshold for 2013 (EUR 2,44 billion for outpatients); (iii) updating the price list and the positive list of reimbursable medicines, particularly by establishing the reimbursement of only cost effective packages for chronic diseases, by moving medicines from the positive to the negative and over-the-counter lists and by introducing the reference price system developed by the National Organisation for Medicines (EOF). These lists must be updated at least twice a year in line with Council Directive 89/105/EEC; and (iv) the substitution of prescribed medicines by the lowest–priced product of the same active substance in the reference category by pharmacies (compulsory “generic substitution”).’;

(3)

in Article 2, paragraph 11 is replaced by the following:

‘11. Greece shall adopt the following measures by the end of December 2012:

(a) a tax reform of personal income tax and corporate income tax that aims at simplifying the tax system, broadening the tax base and eliminating exemptions and preferential regimes;

(b) the necessary primary and secondary legislation to ensure the swift implementation of the Privatisation Plan;

(c) the establishment of a regulatory framework for water companies;

(d) measures to improve the tax administration, introducing performance assessments, improving the use of risk assessment techniques, and establishing and reinforcing specialist debt management units;

(e) the preparation and publication of a plan for the clearance of arrears owed to suppliers by public entities and of tax refunds;

(f) the finalisation of the implementation of the reform of the functioning of secondary/supplementary public pension funds; and the unification of all existing funds in the public sector;

(g) legislation to extend the application of the 5 % rebate on pharmaceutical companies (which exists for hospital-priced medicines) to all products sold in EOPYY pharmacies;

(h) an increase of the share of generic medicines to 35 % of the overall volume of medicines sold by pharmacies;

(i) the assignment of internal controllers to all hospitals and the adoption by all hospitals of commitment registers.’;

(4)

the following paragraphs are added to Article 2:

‘12. Greece shall adopt the following measures by the end of March 2013:

(a) issue a Ministerial Decree for the adjustment of end-user prices for low-voltage customers;

(b) update the MTFS, including by setting binding 3-year expenditure ceilings for government subsectors;

(c) adopt staffing plans for line Ministries;

(d) establish a significantly more autonomous tax administration and specify the degree of autonomy, governance framework, accountability, legal powers of the head of the tax administration and the initial staffing of the organisation;

(e) issue and make public a new fully-fledged anti-corruption plan for the civil service, including special provisions for the tax and customs administration;

(f) make fully operational a standard procedure for revision of legal values of real estate to better align them with market prices under the responsibility of the Directorate of Capital Taxation;

(g) transfer 40 new real estate assets (identified as “real estate assets lots 2 and 3” in the Privatisation Plan) to the HRADF.

13. Greece shall adopt the following measures by the end of June 2013:

(a) achieve the target of making 2 000 tax auditors fully operational;

(b) adopt a new Tax Procedures Code;

(c) ensure the e-procurement platform is ready for use by all central purchasing bodies.

14. Greece shall adopt, by the end of September 2013, the necessary legislation with a view to introducing a structural balanced budget rule with an automatic correction mechanism.’;

(5)

the text appearing in the Annex to this Decision is inserted as Annex IA.