Prime Minister Lucas Papademos assured cash-strapped municipalities on Wednesday that they will receive 450 million euros in financing but urged them to come up with proposals for programs that would qualify for European Union funding as well. Papademos’s first task during his meeting with representatives of the Central Union of Municipalities and Communities of Greece (KEDKE) was to clarify that they would definitely receive the 450 million euros. The amount had been omitted from the 2012 budget but the prime minister explained this was a mistake and that the money would be dispersed to the 325 municipalities around the country.
Local authorities are more in need of the government funding than usual as their own revenues have plummeted over the last few years. Since 2009, the money they have raised via the taxes they are allowed to impose has dropped by 53 percent, or 1.5 billion euros. Papademos, however, urged mayors to devise schemes that could draw European Union funding. In response, the local officials called on the prime minister to tackle the red tape in central government, which they blamed for holding projects back.
“We stressed the issues of bureaucracy, ineffectiveness and the concentrated structure of the central administration, which has to finally learn to trust local government,” said Iraklio Mayor Yiannis Kourakis. “The state has to learn to have faith in municipalities as they are the only public bodies which still have the ability to execute decisions quickly and effectively,” added Kallithea Mayor Costas Askounis, who is also the president of KEDKE. Greece is below the European Union average when it comes to absorbing structural funds, largely because of the inadequacy of its public administration.
However, Development Minister Michalis Chrysochoidis told journalists on Wednesday that progress had been made last year and that Greece had increase to 33 percent the funding that it has been allocated by 2013. He said that programs had been put together last year that would draw 8 billion euros of EU funding.