A Medium-term Fiscal Strategy Framework, presented by Finance Minister George Papaconstantinou, envisages measures worth 3.0 billion euros this year and a total 26 billion euros by 2015.
Presenting the plan, Papaconstantinou said the 3.0 billion euros in interventions envisaged for this year would cover all risks and divergence existing in a fiscal consolidation program, while the remaining 23 billion euros (9.0 billion from higher revenues and 14 billion euros from spending cuts) will help in cutting the country's fiscal deficit by 14.5 billion euros since 8.5 billion euros is needed on interest spending.
The finance minister said the state expects revenues worth 15 billion euros from privatizations and exploiting the state's real estate property in the period 2011-2013, and a total of 50 billion euros by 2015. This revenue will be used to cut the public debt by an additional 20 percent of GDP by 2015.
The Medium-term framework is expected to be approved in Parliament in May and the new legislation will envisage budget projections, fiscal interventions to achieving goals, annual spending ceilings for each government ministry and targets, long-term projection of public debt, intervention plans in public sector enterprises, abolition-merger of state agencies, combatting tax evasion, civil administration and a new payroll, social spending, public spending and defense spending.
More analytically, interventions accounting for 11.4 pct of GDP by 2015 will be made in 12 sectors:
1. Cutting payroll spending by 2.0 billion euros, introducing an one-to-five ratio in new hirings in the public sector, cutting contract workers by at least 10 pct annually, raising working hours to 40 hours per week, reducing compensation paid to commissions, reducing over-time pay, introducing part-time work in the public sector, limiting the number of entries in productive educational schools.
2. Cutting operating spending by 2.5 billion euros. Introducting e-procurement services, cutting telecoms spending, renationalizing energy spending, reducing leasing spending, drastically cutting operating spending in ministries and public agencies (public relations, management costs with the aim to save 2.0 billion euros.
3. Abolishing and merging agencies, worth 1.1 billion euros. Re-evaluating the purpose and spending of all agencies subsidised by the state budget, introducing a new educational map, abolishing and merging tax agencies and customs, abolishing and merging agencies abroad, cutting the number of police stations.
4. Reorganising public sector enterprises worth 2.3 billion euros.
5. Cutting defense spending by 1.2 billion euros.
6. Rationalising health spending by 1.2 billion euros.
7. Rationalising spending on pharmaceutical products, 1.5 billion euros.
8. Reducing pension funds' spending and rationalising social spending, 2.5 billion euros.
9. Strengthening tax revenue collection, 3.5 billion euros.
10. Cutting tax breaks, 2.0 billion euros.
11. Improving social insurance revenues and combating social insurance evasion, 3.5 billion euros.
12. Raising local government revenues, 600 million euros.
The Medium-term Fiscal Strategy Framework also envisages a wide-spread privatization program, through the sale, concession contracts, finding strategic investors, selling equity stakes through the stock market and creating a holding company for the state's real estate property.
The plan envisages:
1. extending a concession contract of the Athens International Airport and gradually cutting the state's equity participation, introducing a new law on the management of regional airports and creating multi-shareholding groups.
2. Port infrastructure. Promoting partnership groups between the public and the private sector for the Port System of Attica and the main regional ports of the country, attracting private funds to upgrading marinas.
3. National road and railway networks. Creating modern financial groups for the operation of highways, such as Egnatia Road and National Roads, through concession contracts, securitizing toll revenues and promoting a restructuring plan for Hellenic Railways, privatising TrainOSE.
4. Energy sector. Cutting equity participation in Public Sector Enterprises from 51 pct to 34 pct in 2012, maintaining public control and management, cutting participation in DE.PA to 34 pct this year, selling metals producer Larco in 2011.
5. Waterworks infrastructure. Attracting private investors to Athens Water and Thessaloniki Water.
6. Communications network. Cutting the state's equity participation in OTE this year, promoting broadband and creating fiber optical networks in cooperation with the private sector. Expanding mobile telephony licenses this year, finding a strategic investor for Hellenic Post in 2012.
7. Gaming. Selling the state's equity participation in casinos this year. Regulating and licensing of gaming services and e-betting services in 2011. Strengthening OPAP's operation and selling-off the listed Organisation next year.
8. Banks. Strategic moves and alliances are encouraged, while the government will restructure the financial institutions under its control. ATEbank has announced a significant share capital increase plan with the state cutting its participation while maintaining majority in the bank. The Savings and Loans Fund will split up, with the state selling the commercial leg of the fund in 2012 depending on market conditions. Hellenic Postbank remains a significant part of the state bank pylon. By 2013 the state will cut its equity participation.
9. Real estate property. A register is currently being made on the state real estate property assets. Promoting special financial tools through the organizing of portfolios and their promotion to international markets by Greek and international banks. The government will also institute long-term leasing of property assets, promoting vacational homes, offering fast track procedures and exploiting -immediately- real estate properties owned by the Tourism Real Estate Company and Olympic Games properties. The timetable for exploiting the state's real estate property will be completed by the end of 2012.