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After Greece has secured the second tranche of € 9 billion in compliance with the contract for financial aid this week there came the time for another visit of the mission of the International Monetary Fund, the European Central Bank and the European Commission. The experts will arrive on Monday bringing a specific list of tasks for the government. They will have to be implemented by the end of the year in order another € 9 nine billion for the rescue of the Greek economy to be paid in December in compliance with the memorandum. The list became popular as the 10 commandments and includes tightening the control in state enterprises, further cut in budget spending, starting the privatization procedures. All the recommendations of the Troika aim to reduce the deficit that should reach 7.6 percent of GDP at the end of 2011.  

First, the cabinet of George Papandreou will get down to work to tackle firmly with the government sector, which is famous with its wastefulness and inefficiency. This winter will be introduced the unified payment of salaries of civil servants. It should take effect from January 1, 2011. The Ministry of Finance exclusively will determine the level of salaries and allowances and pay them. Their size will be aligned horizontally according to the position taken, the years of service and the level of efficiency in all ministries. The Ministry of Finance will strictly observe and comply with the new criteria for the monthly salaries forming to avoid undue large differences in salaries for the same levels in the various ministries. The Commissioners have taken a serous look at the salaries in the Bank of Greece. They will have to review the number of employees there as well as the size of the salaries.

Particular attention should be paid to the problems in the social and health insurance systems, which are referred to as "black holes" in the Greek budget. Commissioners are adamant that the government should firmly intervene in the hospitals’ finances as the violations there were for billions of euros in recent years. The same applies to social security funds as the one of liberal professions. They have spent almost eighty percent of the budgeted money for pensions by the end of July this year. More than 800,000 citizens were due € 32 billion to the state only until May this year. The amount was accumulated from unpaid insurance, taxes and fees. State organizations that operate the EU funds should be also reformed. The experts of the IMF, the EC and the ECB call the government to pay greater attention to the control of EU funds allocation and use.  

At the same time, the government should complete the process of liberalization of closed professions, such as pharmacists, engineers, lawyers, notaries and others. They are now protected by the law that limits the number of professionals. This contradicts seriously to the principles of market economy and affects the competitiveness of the offered services and products. Experts estimated that Greece may add 0.5 percent to GDP in one year only after the liberalization of the transport market. According to the commissioners, particular attention should be paid to the energy market liberalization as currently the state has monopoly of it.

The process of government expenditure optimization includes the privatization program too. It first will relieve the state from losing companies and then it will secure additional income. Financial experts believe that companies like the state railways and the Greek NEC should be subject to privatization, which will enhance competitiveness and will secure new investments. All other companies and organizations that will remain state property will be subject to detailed audit. It will verify the financial conditions and the property owned by any government agency alone.  

Following the decision of the Minister of Finance George Papakonstantinou, all state enterprises will have to prepare detailed reports on 2009 revenue and expenditure and  financial statement for the first half of 2010. They must be submitted to the Ministry not later than September 20 this year. The headquarters of the respective organizations will have to prepare a three-year business plan (2011-2013) containing a detailed inventory of both personnel and operating costs and the funding of activities. It must be submitted by  November 30, 2010. It should also contain the strategic development plan of the company for that period. Expenditure ceilings according to the needs of the relevant company will be introduced as well as guaranteed budget reserves to secure the proper business operations during the three-year period.

The Financial Minister Papakonstantinou introduced in the frameworks of the program of financial management and accountability strict rules for accountability and transparency that will ensure the propriety of state enterprises. The accountability and transparency measures must put an end to suspicions of corrupt practices. Thus the government is preparing to liquidate financially inefficient enterprises in the public sector. The new monitoring system will ensure quick government response to changing economic climate. This means that timely information on changes in financial conditions will enable state enterprises to improve their economic performance. In this way, the socialist government of George Papandreou wants to ensure the accuracy of the medium-term fiscal accountability as part of the plan for restoring the trust in the Greek economy.