Greece to review public spending and increase efficiency

By on 24/02/2015
An EU capital markets union would give companies wider access to capital across the 28-nation bloc. Photo: iStock

Greece has today pledged to review public spending, make central and local government bodies more efficient and to identify savings in each government department.

The proposals, which stop short of any concrete saving or efficiency targets, were accepted by Eurozone finance ministers today, paving the way for an extension of its €172bn bailout beyond Saturday’s expiry date.

The reform list was received by Jeroen Dijsselbloem, chairman of the 19 Eurozone finance ministers, “close to midnight” on Monday evening, the Financial Times (FT) reports.

The six-page document, seen by the FT, includes reform proposals on fiscal structural policies, financial stability, and policies to promote growth plans to tackle Greece’s “humanitarian crisis”.

In it, Greek finance minister Yanis Varoufakis writes that Greece will “review and control spending in every area of government spending, including education, defence, transport, local government and social benefits, work toward drastically improving the efficiency of central and local government administered departments and units by targeting budgetary processes, management restructuring, and reallocation of poorly deployed resources.”

The document also says that Greece will “identify cost saving measures through a thorough spending review of every ministry and rationalisation of non-salary and non-pension expenditures which, at present, account for an astounding 56% of total public expenditure.”

To attract investment in key sectors, the document says, Greece will commit to not rolling back privatisations that have been completed, and “safeguard the provision of basic public goods and services by privatised firms”.

Varoufakis also wants to review imminent privatisations of public services in order to improve the terms and to “maximise the state’s long term benefits, generate revenues, enhance competition in the local economies, promote national economic recovery, and stimulate long term growth prospects.”

He also vowed to fight corruption and tax evasion by “making full use of electronic means and other technological innovations.”

The European Central Bank and the International Monetary Fund have also given their approval to the plans.

However, in a statement published today, Eurogroup call on the Greek authorities to “further develop and broaden the list of reform measures, based on the current arrangement, in close coordination with the institutions in order to allow for a speedy and successful conclusion of the review.”

And in a letter to Dijsselbloem, seen by the FT, Mario Draghi, president of the ECB, expressed some caution. He wrote that “as we expected it was not possible for the authorities to elaborate on concrete proposals and commitments that can be assessed by the institutions in respect to growth, public finances and financial stability” and added: “I would also again urge the Greek authorities to act swiftly to stabilise the payment culture and refrain from any unilateral action to the contrary.”

 

 

 

About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

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