Report on the situation of local and regional democracy in Greece - CG (9) 5 Part II

Rapporteurs: Guido RHODIO (Italy) and Lambert VAN NISTELROOIJ (Netherlands)

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EXPLANATORY MEMORANDUM

Regionalisation in Greece

Fact-finding visits,

10 and 11 April 2001 and 28 October - 1 November 2001

Gérard Marcou

Professor, University Paris I Panthéon-Sorbonne

INTRODUCTION

Under Committee of Ministers Resolution (2000) 1, the Congress prepares regular country-by-country reports on the situation of local and regional democracy in all Council of Europe member states and candidate countries, and monitors their implementation of the principles of the European Charter of Local Self-Government.

In its Resolutions 31 (1996), 58 (1997) and 106 (2000), the Congress had stated clearly that detailed reports on the situation of local and regional democracy in all the member states would be produced within a reasonable time, and set out guidelines for their preparation.

In October 2000, the Greek Union of Provinces (ENAE) lodged a formal complaint with the Institutional Committee of the Chamber of Regions, asking it to prepare a report on regional democracy in Greece, following the introduction of various government measures which, it claimed, deprived the provinces (territorial authorities) of certain fundamental powers and responsibilities, and transferred them to central state authorities, in particular the regional governors.

The Institutional Committee agreed to prepare a report and appointed Mr Lambert Van Nistelroijj (Netherlands) Rapporteur on the state of regional democracy in Greece.

The Rapporteur visited Athens on 10-11 April 2001 with Professor Gérard Marcou of the University of Paris I Panthéon-Sorbonne, expert, and Mr Alessandro MANCINI of the CLRAE Secretariat,.

He met representatives of the Ministry of the Interior, Parliament, the Union of Provinces (ENAE) and the Union of Urban and Rural Municipalities (KEDKE). Appendix I contains the programme of the visit and a list of the officials talked to.

The atmosphere at all the meetings was one of great co-operation, and the Rapporteur received copious documentation from many of the people he talked to, even after the visit. He wishes to thank them all.

Some days before the CLRAE delegation arrived, the Greek Parliament adopted an amendment to Article 102 of the Constitution.

Greece has a two-tier system of local government, comprising elected bodies, the demoi (1033 urban and rural municipalities) and the Nomoi (50 provinces), and a decentralised state structure, the Periferiaie (13 regions), which are directed by government-appointed officials.

The amended version of Article 102 of the Constitution provides that there are two levels of local government (without saying what they are), and states that the exercise of certain state powers may be delegated to local authorities by law, provided that the corresponding resources are also transferred.

The amendment calls into question the very existence of the provinces, as we shall see in the main part of the report. It also meant that the delegation was confronted, not just with the problems cited by the Union of Provinces, but also with possible reform of the municipal system or administrative division of the country in the broad sense.

The Rapporteur gave the Institutional Committee his initial assessment of the problems raised by the ENAE at its meeting in June 2001, and also an account of the new constitutional scenario.

Since the amendment of Article 102 might lead to a reform affecting, not just the provinces, but the whole structure of local government in Greece, the Committee decided to extend the scope of the report to cover the state of local democracy.

On the Rapporteur’s suggestion, it appointed Mr Guido RHODIO (Italy) Rapporteur for local democracy issues.

The two Rapporteurs, accompanied by MM. Marcou and Mancini, visited Athens from 28 October to 1 November 2001. Appendix I contains the programme of the visit and a list of the officials they talked to.

In addition to the representatives of the Ministry of the Interior, Parliament, KEKDE and ENAE talked to during the first visit, the delegation met officials from the Urban Municipality of Heraklion and the Province of Piraeus and discussed the two authorities’ financial resources with them.

The Rapporteurs wish to thank KEKDE and ENAE for making the two visits possible, and all the people they met for their helpfulness and for their willingness to meet the delegation well outside normal working hours.

The Rapporteurs also wish to thank all the Greek authorities - central, local and provincial - for their hospitality.

The Council of Europe has received a complaint from the Greek Union of Provinces concerning various government measures which, it claims, take certain fundamental powers away from the provinces (territorial authorities) and transfer them to state authorities, particularly the regional governors.

It should be noted that, until 1994, municipalities (urban and rural) were the only decentralised authorities. Since 1833, the provincial governors (nomarchoi) who directed the provinces (nomoi) had been government-appointed. In 1994, the provinces were turned into territorial authorities with elected councils, and the provincial governors (now the leaders of the successful parties) as chief executives. Greece has 50 provinces, three of them “extended” and grouping several provinces. In 1986, 13 regions were established to co-ordinate and plan regional development. Since 1994, decentralised state authority has been exercised at regional level. Since 1998, an ambitious municipal reform programme has reduced the total number of municipalities from almost 6 000 to just over 1 000 (900 urban and 133 rural), with financial measures to back the reform process.

The Greek Constitution makes a clear distinction between central and local government: the former is organised on the decentralisation principle, while local affairs are managed by local authorities. The amended version of Article 102 of the Constitution (April 2001) provides that there are two levels of local authority (without saying that the provinces form the second level), and that the exercise of certain state powers may be assigned to local authorities by law, provided that the necessary resources are also transferred.

This is the background to the complaint submitted by the Greek Union of Provinces. The disputed measures cannot be assessed in isolation, because of the changes in Greek local government, and because of the prospects opened up and questions raised by the recent constitutional review, of which the new Article 102 is a product. This is why the situation of local democracy in Greece now needs to be reviewed, with special reference to the relationship between the various levels and to the ways in which the various reforms introduced since the late 1980s interact. Adequate attention should be paid to local authority funding and financial relationships between the different levels – particularly important since local authorities (especially provinces) have limited resources of their own, and local budgets are essentially provisioned from “central funds” derived from levies on the product of various national taxes. This broadening of the report’s scope makes it impossible to look thoroughly at all the issues it will raise, despite the wealth of information collected during the fact-finding missions in April and November 2001, and all the material supplied by the Greek authorities, the national Unions of Urban and Rural Municipalities (KEDKE) and Provinces (ENAE). It will, however, allow us to provide a better picture of the way in which the system functions overall.

The situation of local democracy in Greece will be discussed in two sections, matching the two major reform trends which have emerged in the last decade: regionalisation and municipal reform.

Regionalisation

The 1994 reform was fairly radical: it not only established the provinces as territorial authorities with elected assemblies and leaders, but immediately assigned to them all the powers previously exercised by the appointed provincial governors which had not been transferred to other state authorities. The new authorities remained financially dependent on the central state budget, however. On the other hand, decentralised state administration became increasingly important at regional level, largely in response to requirements connected with the use of EU structural funds – with inevitable effects on relations between central government and both levels of local government. We shall be looking at this in terms of institutions, powers and finances.

We shall deliberately ignore the special case of Aghion Oros (Mount Athos) which, under Article 105 of the Constitution, remains an autonomous, sovereign entity, directly controlled by the Ecumenical Patriarchate. Its constitutional status is determined by religious considerations, and has nothing to do with territorial administration proper.

Institutions

Act 2218/1994 ‘municipalised’ local institutions at provincial level, and developed decentralised state administration at regional level - initially defined in 1986 only for the purpose of planning EU measures.

1. ‘Municipalisation’ of the provinces

The nomos (province) and the nomarchos (provincial governor) are traditional Greek institutions, and both are connected with the rebirth of Greece as an independent state in the early nineteenth century. They were introduced by the German regency in 1833 and never subsequently questioned, although the provinces’ boundaries were adjusted. They matched the need to establish state authority throughout a country fragmented by its geography, whose mountains, rugged coastline and many islands often made communication difficult, and encouraged local separatism. The very large number of municipalities (a total of 5 775 - 457 demes and 5318 rural municipalities) before the 1997 reform reflected this.

This probably explains both why the province was never regarded as a possible basis for administrative decentralisation, and the quite widespread affection for it as a familiar framework for administration of the country. In the 1980s, however, the mayors demanded that the provincial governors be elected. Even the demographic change which emptied the countryside and generated large conurbations, Athens-Piraeus first among them, did not lead to the provinces’ being challenged, but simply to the grouping of some of them for administrative purposes. There are three such extended provinces, grouping two or three normal provinces: (1) Athens-Piraeus (where 31% of the country’s population lives; (2) Rodopi-Evros (in Thrace); (3) Drama, Kavale (in eastern Macedonia) and Xanthi (in Thrace).

The resulting administrative centralisation was not affected by the 1975 Constitution, which based the country’s territorial organisation on decentralised state administration and management of local affairs by local authorities. However, it provided for only the first level of the latter (Article 102), leaving open the possibility of the law’s instituting other levels.

One needs to know all this to understand the kind of upheaval which Act 2218/1994 brought about by turning the provinces into territorial authorities within the meaning of Article 102 of the Constitution.

This act gave the provinces a council and an executive, both elected by direct universal suffrage in exactly the same way as for the municipalities. To this extent, one can indeed speak of ‘municipalisation’ of the provinces, where state was replaced by local authority.

Provinces are thus administered by councils elected for four years by direct universal suffrage, as follows: three-fifths of the seats are allocated to the list which secures an absolute majority of the votes cast - if necessary, after a second round restricted to two lists; the candidate who heads this list is the official candidate for the provincial governorship, and is duly elected to that office; the other seats are distributed by proportional representation among the other lists. No one may be re-elected provincial governor more than once (Act 2218/1994, Section 6). The provincial council elects a provincial committee which, in addition to its chair, has four to six members, depending on the size of the province. It has decision-making powers, particularly for execution of the budget and the conclusion of public contracts; it prepares the meetings of the provincial council and exercises powers delegated to it by the latter. An economic and social committee represents the municipalities (through the local Union of Urban and Rural Municipalities) and socio-professional interests, as well as provincial staff and their unions before the provincial council.

In multi-district provinces, the provincial council is composed of members of the councils elected in the districts, where the allocation of the majority of seats is determined according to the results obtained throughout the province. The chairperson of the council is also the designated candidate at the top of the victorious list. The major part of the administration, however, remains in the hands of the provincial governor of each district. From this point of view, the reform has not had the expected results.

The first provincial elections took place in 1996, and government appointees (civil servants) were replaced by elected provincial governors, put forward by the major parties: in fact, under Act 2218 (Section 6), civil servants are ineligible for this office.

2. Regional decentralisation

After two failed attempts to establish an upper level of decentralised government with general powers (1913-1953 and 1970-1973), Act 1622/1986 introduced the 13 present administrative regions, which were established by Presidential Decree 51 of 6 March 1987. These regions were not intended to have general powers, but were set up to co-ordinate, plan and programme regional development, so that Greece could take advantage of the EU structural funds, which really began to develop when the 1988 regulations took effect. To start with, the regional governors were thus specialised authorities only, and were assisted by an advisory council representing the region’s interests. Provincial governors, on the other hand, were still decentralised general authorities, acting on a presumption of authority which allowed them to exercise the powers of most ministers, apart from those expressly reserved to the latter1.

The regions’ character began to change in 1994, when the provinces became territorial authorities, and the state no longer exercised power at that level. Act 2240/1994 gave the regional govrnors certain powers which the provincial governors had previously exercised, but which corresponded to state functions exercised throughout the country rather than local functions - supervision of local authorities being one of them. Above all, however, Act 2503/1997 vested the state’s general decentralised powers in the regions. The regions were administered by the regional governors – state representatives appointed by the central government. Some decentralised sectoral services which are generally managed by the regions remain at provincial level. The regions have thus been endowed with administrative powers, and extensive decentralisation makes them even more important: they have their own budgets, which are allocated by the state and implemented by the regional governors, and they have their own staff. The regional governors also manage regional development funds from national or EU sources. However, the regions do not have independent legal personality, but are still one echelon of the country’s internal administration, and answerable to central government.

The regional governors are assisted by regional councils, which are responsible for democratic planning in their regions and have essentially advisory powers. The councils are chaired by the regional governors and comprise: the provincial governors of the region, a representative of each local Union of Urban and Rural Municipalities (TEDKE) (there is one in each province), a representative of each of the regional agencies specified in the Act (chambers of industry and commerce, the Technical Chamber of Greece, the Geotechnical Chamber of Greece) and representatives of civil servants’ unions, agricultural co-operatives and trade unions.

As well as serving functional purposes, the reform was dictated by legal requirements. As we have seen, the Greek Constitution bases territorial organisation on decentralised state administration and management of local affairs by local authorities (Sections 101 and 102); the new wording of Article 102, resulting from the 2001 review, did not affect this conception. Moreover, the Council of State had ruled that the Constitution prohibited local authorities from exercising central government functions (physical planning powers were the issue). This meant that, if local authorities took over from decentralised state authorities at provincial level, then those state authorities had to be reorganised on another level and given state powers which would otherwise have stayed with the local authorities. This requirement is qualified by paragraph 1 of the new Article 102, which states that “the exercise of competencies constituting missions of the State may be assigned by law to local government agencies”; but the principle (derived from Article 101) of an administrative system based on devolution and decentralisation still holds. Unless the Constitution is again amended, and this position reversed – of which there are no signs at present – a strong decentralised administration at regional level seems likely to remain the pattern for some time.

Powers

It is the division of powers between provinces and regions which the ENAE contests, since turning the regions into decentralised state authorities with general powers makes it possible to transfer to them some of the powers retained by the provinces after the 1994 reform. Consolidation and strengthening of the municipalities has also made it possible to give them extra powers, while the 2001 constitutional review provides for only two levels of territorial authority (without guaranteeing the provinces’ existence), and some people favour turning the regions into territorial authorities. In these circumstances, the provinces may well fear erosion of their powers from above and below, and so for their existence.

The first step, however, is to consider the powers of the provinces and regions, looking at the principles which determine those powers, the powers which are theirs by law, and the powers transferred in the 1990s - particularly those lost by the provinces.

1. General principles

Both the Constitution (Article 102) and the law provide that the provinces, as local authorities, have general power to manage the local matters for which they are responsible, subject to interpretation by the administrative courts. This principle was reinforced by the new wording of Article 102, which states that “for the administration of local affairs, the presumption of competence concurs in favour of local government agencies” (para. 1, first sentence). However, the provinces have powers only in local matters which are not the exclusive responsibility of the urban and rural municipalities. In other matters which might be considered local, the provinces and the urban and rural municipalities actually have competing powers. To this extent, strengthening the municipalities through mergers and co-operation inevitably reduces the provinces’ own area of intervention. Examples of local matters for which the provinces are responsible are provincial roads and public works whose scale or purpose exceeds the capacity or extends beyond the territory of any one municipality.

On the other hand, in 1994, the provinces inherited all the powers of the old government-appointed provincial governors and their services, with the exception of certain state-reserved powers which had to be transferred to state authorities. This applied at once (Act 2240/1994) to supervision of local authorities. Naturally, in Greece as in other countries, the content and scope of “local affairs” have never been clearly defined. This explains the controversy which attended the removal of certain powers from the provinces between 1994 and 2001. It also allowed the Ministry of the Interior to claim that the new law did not affect the provinces’ powers in local matters, but simply state powers exercised throughout the country.2 In fact, no general definition of “local matters” can be given; the most one can say is that, if certain powers were not recognised, local autonomy would be emptied of its substance. The European Charter of Local Self-Government refers to the right and ability of local authorities “to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population” (Article 3, para. 1). However, the term “substantial” is open to interpretation, and this provision refers to local authorities in general, not to separate levels of local authority in a particular state. In the last analysis, it is up to the national legislator to determine, directly or indirectly, what local matters comprise - and he may, for general policy reasons, decide to broaden or narrow that definition. The Charter of Local Self-Government does indeed oblige states to introduce local self-government, but does not say how decentralised the system must be.

2. Powers lost and gained by the provinces

Prior to 1994, there was no need to divide the provincial governors’ functions into those which concerned local matters and those which concerned the state as a whole: the question had no meaning since the governors were answerable to central government. It is, however, difficult to dispute the fact that the powers taken from them concerned national, rather than local matters:

- transfer to a Ministry of Defence agency of responsibility for planning and assessment studies relating to military camps situated in potential residential areas and due for closure (Act of August 1999);

- transfer to a Ministry of Health and Social Security agency of responsibility for health care for persons covered by state health insurance, and of provincial staff previously working in this area (Act 2768/1999);

- transfer of responsibility for labour inspections, and of the provinces’ powers in this area, to a labour inspectorate established within the Ministry of Labour (Act 2639/98);

- transfer to the Ministry of Education of the provinces’ powers in education, with the exception of those relating to school buildings, school transport, approval of school outings and other local issues (Act 2817/2000);

- transfer to the Ministry of the Aegean of the provinces’ powers in the matter of building and town-planning in the islands, in order to preserve the traditional and natural heritage (Presidential Decree 326/2000).

Other decisions are less clear-cut:

- transfer to a Ministry of Agriculture agency, the Vocational Training and Employment Organisation, of responsibility for agricultural training and development centres previously administered by the provinces (Act 2520/1997);

- transfer to a state-owned company, not the province, of the agency responsible for building schools in Attica (Presidential Decree 414/1998);

- transfer of all powers concerning special education establishments (for people with special educational needs) to the Ministry of Education, and of staff previously employed by the provinces (Act 2742/1999).

However, none of these issues is clearly and definitely “local”, and solutions differ from one country to another. There are also measures tending in the opposite direction. For example, Act 2647/1998, transferring certain powers to the regions and local authorities, contains a long list of powers transferred from the ministries, not just to the regions (i.e. the regional governors), but also to the provinces and the first-level local authorities. The provinces, for example, are made responsible for authorising the storage and transport of fuel, licensing heating oil retailers, defining protected areas and destroying illegal crops in those areas, regulating the use and management of pastureland, supervising health care in private clinics, approving agreements on inter-city transport between non-adjacent districts, and issuing camping permits for nomads. Acts 2738/1999 and 2839/2000 transfer responsibility for existing port authorities to the provinces and municipalities (depending on their size), and also responsibility for the establishment of inter-municipal port authorities. Act 2912/2001 also makes the provinces responsible for regulating immigration, and provides for a new stamp duty to fund their activities in this area.

Responsibility for democratic planning is a more complex question, and municipal – not provincial – powers are the basic issue here.

Insofar as the provincial governors are now locally elected, there is nothing inherently strange in the government’s deciding that state powers exercised by their appointed predecessors should be transferred to the regional governors, who are now the decentralised arm of central government, or to the relevant ministerial agencies or offshoots. Such transfers are consistent with earlier court rulings that local authorities may not exercise state responsibilities (relating to town planning). But the powers given them by the 1998 Act - supervisory and administrative powers - are of the same kind. Only the transfers relating to ports have a political dimension.

Nevertheless, the Greek Union of Provinces protests at the removal of powers from the provinces, and argues that they should be able to exercise both local and decentralised state powers. The examples given above show that they are not prevented from doing this. Although exercised on the state’s behalf, i.e. delegated, these powers are none the less very much subject to revision. The latest constitutional amendment does go some way towards meeting the ENAE’s demands, since it provides that the exercise of certain state powers may be delegated by law to local authorities. However, the new version of Article 102 makes this an option only, and deciding to avail of it is entirely at the legislator’s discretion. The Greek Union of Provinces also wants the provinces to manage the EU structural funds – another state responsibility, currently exercised at regional level by the regional governors.

3. Principal powers exercised by the provinces

Looking at the actuality, rather than the list, of powers exercised by the provinces - those which predominate in their activity - one is surprised to find that they rarely concern local matters, but usually involve the local implementation of functions exercised in the same terms throughout the country; in other words, their activities still bear the stamp of their state-run predecessors’ style and working methods – the reason for this being that, when they were set up, no thought was given to the role they should now be playing.

The example of one of them – Piraeus – shows how little room for manoeuvre the provinces have. Out of a budget of 64 million euros in 2001, 22 million were earmarked for statutory disability benefits, 25 million for the salaries of the province’s staff, and 25 million for social security expenditure on the health bills of civil servants resident in the province. The Directorate of Programming and Planning has only 6 million euros to cover all the activities for which it is responsible (roads, some school buildings, hospitals, etc.) - which means that, at best, it can attend only to maintenance. Any work it undertakes also has to be approved by the Ministry of Works.

Other sums are committed in the regions, but the province’s powers are restricted to planning, and the decision to implement and fund a project is taken by the regional governor, i.e. the state’s representative. The provincial governors are required to draw up infrastructure plans with the municipalities. These plans are then adopted by the provincial council, and submitted to the regional governor and the regional (advisory) council. The decision is taken by the regional governor, with reference to the resources available from the EU structural funds, and the criteria governing their use. On the other hand, a major investment effort has been made to help implement the 1997 municipal reform. A special one-trillion drachma programme covering a five-year period - the EPTA programme - was launched in 1998. Use of these extra funds is decided by the regional governors, not the provinces. The municipalities seem to be using these funds to cover projects which are, in principle, a matter for the provinces. Expenditure on roads for which the provinces are responsible has been mentioned.

It should be remembered, however, that investment expenditure scarcely features in local budgets, provincial or municipal. Local investment expenditure is almost entirely funded by the state, and from the EU structural funds, but the corresponding resources do not appear in local budgets.

The provinces’ other powers mainly concern supervision of compliance with regulations: health controls on food and animals, prevention of olive tree disease, monitoring the fishing fleet and aquaculture, monitoring the use of structural fund grants, which are managed and paid directly by the central government (particularly in agriculture), and monitoring exports and imports in the port of Piraeus.

Clearly, many of the powers actually exercised by the provinces are in fact supervisory, and do not really lend themselves to the framing of overall policies at provincial level. What the provinces really lack are genuine powers in local matters. Moreover, 99% of their resources come from central government. Sometimes, too, powers are inconsistently assigned: for example, the committee which decides on entitlement to disability benefits is a regional committee, chaired by the regional governor, but benefits are managed and paid by the provinces.

Act 2218/1994 defines the powers of the provincial councils in terms which would allow them to extend the range of their activities. They have power (Article 13), inter alia, to set taxes, fees, charges and rates (d); expropriate property (e); sell, exchange or donate property, and establish title (f); authorise the use and leasing of moveable and immovable property (g); purchase and rent moveable and immovable property (h); contract loans (i); adopt public works programmes; plan, implement and maintain civil engineering projects (k); protect and develop areas (l); set up cultural and social service centres (m); award contracts for the provision of services and the completion of works and programmes (n); establish legal persons and enterprises, or hold shares in such enterprises (o). These powers would make it possible to devise and implement local policies, as happens in other countries where the laws are much the same. It is probably their lack of independent resources which mainly prevents the provinces from doing this in Greece; at all events, the mission was unable to identify local policies developed and implemented by them.

4. Powers of the regions

The powers of the regions are easier to analyse since they are state powers by definition, and many of them have already been mentioned. It should be noted, however, that the term “region” is deceptive: the region is simply an administrative district; the only administrative authority - apart from certain ministerial agencies - is the regional governor.

The present powers of the regional governors, as general decentralised state authorities, can be divided into four groups, and make them fully the equivalent of the French préfets.

police and security powers;

regional development: implementing national and EU policy (planning, co-ordination, supervision), helping the government to draw up regional development policies;

managing, co-ordinating and supervising specific government policies in the region, on behalf of the government and ministries;

supervising local authorities.

Their police and security powers cover municipal police, ports, and emergency and fire-fighting services.

Measures taken by municipal decision-making and executive bodies are monitored (Act 2218/1994, Article 18, amended by Act 2839/2000, Article 7) by the region’s Supervisory Commission, which is chaired by a member of the State Council and includes two regional civil servants in its membership. All such measures are notified within ten days to the regional governor, who refers anything he/she considers unlawful to the Commission within two weeks. Any individual may also bring a complaint against a municipal measure before the Commission, whose decisions can be appealed to the administrative court. There may be several supervisory commissions in the same region, each responsible for an area determined by the regional governor.

Supervision of measures taken by the provinces follows the same rules, but with certain special features - the most important being that the provincial governor’s actions are directly monitored by the regional governor, to whom any individual may also appeal. The regional governor’s decisions may be appealed to the administrative court. Act 2218/1994 also provides that the provincial governor is legally answerable for any serious negligence or intentional fault causing damage to the province to the regional governor, who has power to impose a disciplinary sanction (suspension or dismissal) if the former has seriously exceeded or abused his/her powers (Articles 19 and 20).

The regional governors’ regional development responsibilities have been extended beyond planning and deployment of the structural funds in the regions, which are classified as objective I. They direct preparation of the regional plan, which is one regional aspect of EU aid for member countries. They chair the regional councils, which make proposals to government on public works and general policy measures of national importance affecting the region, draw up the regional development plan on the basis of proposals by local authorities, and allocate the funds provided for local authority projects under the public investment plan.

Apart from the regional governor’s office and an emergency services planning department, the regional administration comprises a general directorate, which is divided into specialised sub-directorates (depending on the powers devolved to the governor), local sub-directorates, which are also specialised, in all the provinces (except that in which the regional capital is situated) and a civil defence department.

There is a Regional Development Fund, a private law entity answerable to the Ministry of the Interior. This manages grants which come mainly from national public investment plans and the EU, and are used to fund projects included in regional, provincial and local development plans. It may also contract loans.

There is no sign of any challenge to the current system for management of the structural funds, and the regional advisory councils seem a satisfactory way of achieving the partnership provided for in the structural fund regulations (see its membership above). It is noticeable, however, that local authority representatives are chiefly anxious to secure funding for their own projects, and the system does not encourage those involved to think in terms of the region as a whole. The procedure for submission is open and competitive, but – say some mayors - this does not rule out “subjective criteria”. Setting up projects in a way which matches the eligibility criteria is the main source of problems, and small authorities are at a disadvantage here.

As general decentralised authorities, regional governors now play a central part in implementing major government programmes. For example, Act 51 of 30 January 2001 provides for a three-year programme - thePoliteia” Programme - to reform public administration by updating methods and organisation, extending computer applications and upgrading human resources. This programme mainly derives from regional programmes approved by the Ministry of the Interior on the basis of reports prepared by the regional governors in consultation with the regional councils.

5. Regionalisation options

The Union of Provinces (ENAE) criticises the role of the regional governors and the growing importance of the regions as a platform for public action, and for development and modernisation policies. It sees all this as a threat to the provinces, which are local authorities – whereas the regions are merely decentralised government authorities.

The Union of Urban and Rural Municipalities shares at least some of these concerns. It is critical of the court rulings on state powers, which have led to certain powers’ being recentralised. It wants clarification of the powers of local and central government. Unlike the ENAE, however, it favours the setting-up of a territorial authority at regional level. In view of the recent amendment to the Constitution, this would mean abolishing the provinces. The Union of Urban and Rural Municipalities is in favour of strong regions, with powers of their own and also powers delegated to them by central government. Such a reform, however, would mark such a radical departure from the country’s current administrative pattern, which is still relatively centralised, that it seems very unlikely. Nevertheless, this position is understandably considered hostile by the Union of Provinces, which believes that the government is preparing to take certain powers away from the provinces and give them to the municipalities.

To Parliament, the prospects opened up by the constitutional amendment seem far more modest. The main parties disagree on certain points: PASOK stresses that the provinces are currently “caught” between the municipalities and the regional governors, and that the provincial governors confuse state and local powers. New Democracy defends the provinces and emphasises the “oppressive” effects of the regional governors on them. It also champions the cause of small municipalities and rural areas. Nevertheless, it does seem to be generally agreed, firstly, that there are too many provinces and regions at present and, secondly, that both provinces and regions should be kept. Be that as it may, the 2001 revision of the Constitution does make it necessary to take a fresh look at the intermediate level, but nothing seems likely to happen before the next local elections (Autumn 2002), and there are no signs at present that any of the parties will highlight the issue in the campaign. It is also possible that the amendment of Article 102 will produce no effects. In view of what we have said, however, the likeliest outcome may well be a reduction in the number of administrative districts (provinces and, perhaps, regions), leaving their character unchanged and keeping both levels. At the same time, if this reform were to prove as difficult, politically, as a more radical change, then supporters of the latter would be given fresh arguments.

Nor must we overlook the effects which any redrawing of boundaries might have on parliamentary constituencies - a point which deserves to be looked at more closely.

Finances

A clear distinction needs to be made here between the provinces and the regions, which are merely decentralised government authorities.

1. Finances of the provinces

The provinces have small budgets, essentially based on transfers from the central state budget, but make little use of some of the powers conferred on them by law - although these would give them more freedom of action.

Article 22 of Act 2218/1994 distinguishes between ordinary and extraordinary revenue (French budgetary law also used to speak of the ordinary and extraordinary revenue of conseils généraux of départements).

Ordinary revenue includes: (1) taxes, fees, charges and rates; (2) income on moveable and immovable property; (3) special annual grants from the state budget to cover the cost of exercising responsibilities delegated by the state; (4) a percentage of the central autonomous funds; (5) loans under the public investment budget; (6) compensatory fees, charges and rates.

The taxes, fees, charges and rates set by law are a negligible part of all this. Ordinary resources essentially come from the special grants and the central autonomous funds. The latter comprise a proportion of certain government revenues3. They are divided among the provinces on the basis of objective criteria (population, extent of the road network, level of social service spending), but also with reference to the possible availability of local funding – which needs to be defined.

Compensatory fees, charges and rates are levied by the provincial councils “for services or works which help to improve quality of life, provide the public with better services, and develop the area covered by the provincial administration” (Section 22.2). This option seems to be little used, although it would make it possible to raise independent revenue to fund specific projects.

“Extraordinary” revenue includes: (1) Fees for the use of works financed by loans (used to repay those loans); (2) loans; (3) grants from public sector agencies; (4) income from property sales; (5) EU and other international funding. The first two types are little used, and the provinces also receive little in the way of national or EU grants. Investment funding seems to lie largely outside the provinces’ control, and to be a matter for the regional governors and municipalities.

The Province of Piraeus, for example, had a total budget of expenditure of 64 million euros in 2001, and this was essentially covered by the central autonomous funds (28 million euros) and a government grant (38 million euros); this total slightly exceeds the expected level of spending. Other possible sources of revenue are clearly negligible, or indeed non-existent. The Ministry of the Interior reports that 99% of revenue comes from central government grants.

Surprising as it may seem, we were unable to obtain detailed national figures on the provinces’ finances. Dexia estimates that their expenditure in 1997 was similar to that of the urban and rural municipalities, i.e. about 2% of GDP and 5-6% of total public expenditure4. In view of the powers the provinces actually exercise, however, these figures are probably too high.

2. Finances of the regions

The regions have no budgets, since they are merely state administrative districts. Some significant types of funding are devolved to them, however, and controlled by the regional governors, assisted by the regional councils.

Investment loans committed at regional level are managed through the Regional Development Fund (see above).

Investment expenditure is covered by “collective decisions” - special decisions by the Minister of the Economy, approving projects which are grouped in categories and together make up the public investment programme. Collective decisions are “regional” (projects planned by the regions - since 1998), “provincial” (projects carried out by the provinces) and “local” (projects carried out by first-level local authorities). Two investment programmes for local authorities are managed at regional level, i.e. by the regional governors.

The first, the Special Local Government Programme (EPTA), was set up under a 1986 Act. This is a support programme, helping to cover local infrastructure costs and the running costs of first-level local authorities over a five-year period (1998-2003), renewable for a further two years. It provides financial back-up for the 1997 municipal reforms, and totals one trillion drachmas (almost three billion euros). It is financed by redeploying ministerial funds, and the use made of these is collectively monitored by the ministries concerned. The funds themselves are first divided among the regions on demographic and economic criteria, and then divided among the municipalities in each region by the regional governor, who must ensure that the municipal projects submitted respect the programme regulations.

The second, the Special Local Government Development Programme (PSDAL), is part of the regional development programme set up to use the structural funds. It funds improvement of the local authorities’ technical and material infrastructure, and also provision of the infrastructure needed for local residents and local economic development (roads, water supplies, environmental measures, tourist facilities). The regions decide on use of the structural funds, and the monitoring committees are chaired by the regional governors.

This means that most local public spending is planned at regional level, under the regional governor’s authority.

Implementation of the Klisthenis and Politeia programmes, both concerned with the reform and modernisation of public authorities, and launched for three years by Act 51/2001, is also essentially a matter for the regional governors.

Because of the funding committed at this level, the regions and the regional governors have become key elements in the Greek administrative system.

Municipal reform

The most significant changes regarding local democracy in Greece are likely to result from municipal reform, which will very probably strengthen local authorities vis-à-vis central government, but also vis-à-vis the intermediate levels. Conversely, no reform of the intermediate level should be undertaken without prior assessment of its consequences for the municipal level, so that undesired effects may be avoided.

We shall discuss municipal reform principally with reference to relations between the municipalities and central government and provinces. We shall focus on four things: territorial reform, institutions, powers and finances.

Territorial reform

The Kapodistria Programme5, launched in 1997, has radically reformed the country’s municipal organisation, reducing the number of first-level local authorities from about 6 000 to just over 1 000.

Before this reform, there were 5 318 rural municipalities and 457 urban municipalities (demes). However, 85% of the former had fewer than 1 000 inhabitants, 60% fewer than 500 and 38% fewer than 300. Since the 1912 reform6, any community with more than 300 inhabitants and an elementary school qualified as a rural municipality, while provincial capitals and towns with more than 10 000 inhabitants were urban municipalities7. The demographic criterion explains why there were so many small rural municipalities. In time, differences in the functioning of these two types of first-level local authority became blurred, and the democratic criterion became less significant. Above all, small rural municipalities were unable to cope with the demands made on modern municipal authorities in terms of facilities and economic development. Moreover, inter-municipal co-operation produced disappointing results.

This was the Greek Government’s reason for adopting the Kapodistria Programme – a radical plan for the reorganisation of first-level local authorities - in February 1997. In March, the programme was submitted to an extraordinary congress of the Union of Greek Urban and Rural Municipalities (KEDKE), which approved its general principles. The scheme’s originality lies in the fact that it is not just a plan to merge municipalities, but a national and regional development and works programme, of which municipal reform is the pre-condition. The idea was to set up local authorities which could implement the programme, and this meant giving them the institutions, staff and financial resources they needed to do this. This was why a five-year (1997-2001), state-funded programme was set up to support the new municipalities and finance the works programme. The programme also set out to help the new municipalities to recruit the staff they needed to exercise greater administrative and financial autonomy. The reform was also novel in providing for continued representation of the old rural municipalities, and giving them a say in decision-making on the new municipal councils - which certainly helped local communities to accept the mergers.

Act 2539/1997 organised the reform and, in particular, specified how the compulsory mergers of municipalities were to be carried at provincial level. The mergers were decided on the basis of demographic, geographical and historical criteria.

The new municipal councils were elected in 1998.

The Greek State Council ruled that the Act was consistent with the Constitution and, in giving its decision, laid down a number of general principles for local government reform8:

the restructuring of local authorities must allow for economic and social conditions, as well as communications;

territorial reform must set out to ensure equal access for citizens to public services provided by local authorities;

the fact that local authorities are guaranteed by the Constitution does not mean that urban or rural municipalities may not be merged to form stronger authorities.

These principles can probably also be applied to reform at intermediate level.

The reform has left Greece with 900 urban and 133 rural municipalities, i.e. the ratio of urban to rural municipalities has been reversed. Specifically, the number of urban municipalities has almost doubled, while the number of rural municipalities has been cut by 80%.

But the scope of the reform can best be appreciated by looking at the number of first-level local authorities in each province. One finds that, on average, a province now has only about 20 first-level local authorities, instead of some 120. In the region of Central Greece, an average province, such as Evia (population 208 000), used to have 165 municipalities; it now has only 27 (25 urban and two rural); Evrytania, the least-populated province (population 24 000), now has only 11 urban and no rural municipalities (it used to have two urban and 80 rural municipalities). In Eastern Macedonia and Thrace, the province of Xanthi (population 91 000) now has only ten first-level local authorities (six urban and four rural municipalities). The picture in large provinces is obviously rather different: in Thessaloniki (population 950 000), there are 45 first-level local authorities (43 urban and two rural municipalities). The region of Attica, where one-third of the country’s population is concentrated, now has 124 first-level local authorities, instead of 145: the number of urban municipalities has increased slightly (from 88 to 91), while the number of rural municipalities has been halved (from 62 to 33)9. It can be seen that, outside the most heavily urbanised regions, the province now seems too small a framework, by comparison with the larger, more populous first-level local authorities, with their strengthened municipal administrations.

Institutions

Greek law provides for two types of first-level local authority: the urban and the rural municipality. The 1997 reform did not challenge this old distinction.

As we have seen, the 1912 reform uses a demographic and a functional criterion to distinguish between them. These criteria played a part in the 1997-1998 merger plans, but were applied to the transfer of powers to local authorities.

Urban and rural municipalities also have different institutions. Rural municipalities are administered by a council, and its chair is responsible for implementing its decisions. The council has between seven and eleven members, depending on the population; only rural municipalities with more than 5 000 inhabitants have 11-member councils. Urban municipalities are also administered by a council, but their membership ranges from 11 to 39, depending on population. Urban municipalities with fewer than 5 000 inhabitants have 11-member councils. The council elects a municipal committee, chaired by the mayor, which exercises certain powers assigned to it by law (preparation of the budget and public contracts), as well as powers delegated to it by the council. The mayor is the municipality’s executive authority.

Municipal councils are elected for four years by direct universal suffrage, as follows: three-fifths of the seats are allocated to the list which secures an absolute majority of the votes cast - if necessary, after a second round restricted to two lists; the remaining seats are distributed proportionally among the other lists. Every list nominates a candidate for mayor; if it wins, its candidate is automatically elected mayor.

The 1997 Act kept three to four-member councils in the old municipalities (except the capitals of the new urban or rural municipalities), which are now municipal wards. These local councils are official bodies of the new urban or rural municipalities. They represent the local population, play an advisory role, and submit proposals to the municipal council on matters affecting the ward. Responsibility for certain issues affecting the ward may be delegated to them. Their chair or his/her deputy represents it in an advisory capacity on the municipal council. Some people think that local councils will rapidly disappear; others point out that problems may arise if the political majorities on the municipal and local councils are different. This latter risk is part and parcel of holding elections at different levels, and the experience of other countries (e.g. English parish councils, French communes associées, Bulgarian infra-communal corporations) suggests that the local councils may well prove durable, even if they play a merely secondary role.

One important aspect of the Kapodistria Programme was the strengthening of municipal authorities. This covered the recruitment of new staff and a training programme. Thus 2 500 specialised staff (economists, sociologists, civil engineers, etc.) have been recruited by the new first-level local authorities. The training programme launched in 1997 continues, and is essentially determined by the powers transferred to the new authorities.

The merging of most of the smallest municipalities (only 91 with fewer than 1 000 inhabitants are left, and 566 with fewer than 5 000) has not rendered inter-municipal co-operation useless. The usual form of co-operation is the syndicate, set up by two or more municipal councils to supervise public works of common interest, purchase materials jointly or draw up development programmes. Development associations are established by the Minister of the Interior, having first been discussed by the provincial council: they cover geographical areas defined with reference to socio-economic conditions and existing communications. There is also contract-based co-operation, covering the exercise of certain municipal powers; only urban - not rural - municipalities may act for other authorities on this basis, and the contract is regarded as a mandate. Contracts delegating powers may also be concluded between first or second-level local authorities. Some fiscal powers may be delegated in this way, but, as we shall see, these are limited. Contracts may also be concluded with statutory public bodies for the implementation of action plans (e.g. water supplies, sewerage). These various forms of cooperation pre-dated the 1997 reform, and have been reviewed in the light of the new conditions. An Act of September 2001 on inter-municipal co-operation allows municipalities to pool their resources in exercising certain powers. However, the various forms of co-operation were not specifically studied during the fact-finding missions. It seems possible that improved inter-municipal co-operation may drive a deeper wedge between the first-level local authorities and the provinces, which the former will need less than ever.

Powers

Article 24 of the Municipal Code gives first-level local authorities general responsibility for all local matters, and for meeting the needs of local residents. As generally defined in Greece, “local matters” do not extend beyond the municipality. In the past, rural municipalities had very limited powers – in effect restricted to cemeteries and refuse collection. The new, larger municipalities have new powers, particularly regarding local matters.

In addition to registering births, marriages and deaths, first-level local authorities are usually responsible for: fire-fighting, school maintenance, hospitals (normally in urban municipalities), day nurseries, day-care centres and retirement homes, certain aspects of town planning and housing, sewerage, refuse collection, sports and cultural facilities, public transport, gas and water supplies, and certain powers concerning agriculture, fishing and the licences needed to practise certain professions. Acts passed in 1999 and 2000 transfer to the urban municipalities powers concerning the establishment and operation of ports, which had not been transferred to the provinces.

Legislation on the powers and responsibilities of municipalities is being prepared. This would transfer new powers and responsibilities to them, and, in some cases, legalise changes already under way. Specifically, they would:

- be able to set up and recruit a municipal police force;

- be able to levy taxes (in accordance with the Constitution);

- have town planning powers, if they so wished;

- be responsible for sports facilities;

- be responsible for health inspection of the region’s enterprises;

- be responsible for public transport.

The transfer of other powers is being discussed by the Ministry of the Interior, KEDKE and ENAE. The transfer of responsibility for day-care centres, day nurseries and some sports facilities began in 2001. To start with, first-level local authorities were authorised to set up day-care centres, day nurseries and recreational education centres themselves, and 250 have been established. The “Greece 2004” sports programme also seeks to develop the country’s sports infrastructure. In both cases, national funding is provided for a network of these facilities; any facilities not covered by the network must be funded by local authorities themselves.

The increasing power of the municipalities should not be exaggerated, however. The trend is a real one, and is certain continue - but is still limited. Unfortunately, we have no data on municipal spending trends since 1998. Municipal spending has certainly increased since 1995, when it accounted for only 5.6% of total public expenditure. KEDKE reports that it quadrupled between 1998 and 2001, which would be one positive result of the reform; but we have to remember that it was very low before that, so the change is less dramatic than it sounds. Nevertheless, municipal finances have moved in the right direction since 1994, even if the municipalities still have little financial autonomy.

Finances

Local budgets (i.e. those of the municipalities) are derived from independent revenue, over which they have some control, and transfers from government, which allocates a proportion of certain national taxes, and also makes grants, to them. Transfers are usually more important, but the reverse may apply in towns. In 1995, according to Dexia, independent revenue accounted for 35% of the total, transfers for 63%, and loans for 2%10. With regard to spending, it should be remembered that investment expenditure is mainly funded directly under government programmes, and that loans are not included in the budget.

1. Independent revenue

Independent revenue breaks down as follows:

road and street-lighting tax;

property tax;

advertising tax;

various low-yield taxes on foodstuffs (beer, oil, etc.);

a tourist tax in coastal areas;

fees for certain services: market charges, charges for drinking water from local springs, cemeteries, use of slaughter-houses, etc.);

fees for issuing certain documents;

income from property, rents and investments.

The most important sources of revenue are the road and street-lighting tax, property tax and fees.

The road and street-lighting tax is assessed on the area occupied or used (for business premises), multiplied by a set factor (which is different for residential and business premises). Property tax is assessed on floor area and takes account of the location (value of the area) and state of the building (rental value calculated by the national tax department). These two taxes are collected for local authorities by the national electricity company, when electricity bills are paid - which ensures a very high level of collection. Other taxes and fees are levied directly by local authorities, with the exception of the beer tax, which is levied by the state and repaid to local authorities. Since 1994, local authorities have been able to adjust the factors applied to property to determine the sum due, and this gives them some power in tax matters. However, an Act of 2000 again reduced this room for manoeuvre considerably, since the factors applied may not increase tax above the inflation rate.

For 15 years, the independent revenue of Heraklion, a town near Athens with an official population of 43 000, has accounted for between 60 and 70% of total resources (but only 45% in 2000, according to the annual accounts). Taxes and charges account for some 50% of independent revenue, and some 50% of those taxes and charges come from the road and street-lighting tax (i.e. 25% of total independent revenue). The property tax yields far less, only 10% of the revenue from the road and street-lighting tax.

2. Transfers

Transfers to cover ordinary expenditure come mainly from the central autonomous funds. These funds are derived from a proportion of the revenue from certain national taxes:

20% of revenue from income tax paid by individuals and legal persons, subject to deduction of a third of that 20%, which is used to cover investment expenditure;

50% of revenue from the annual vehicle road tax;

3% of property sales tax;

20% of revenue from the tax on bank interest.

Central autonomous funds are allocated to municipalities by the Minister of the Interior and the Minister of Finance (collective “local” decision – CLAD), and assigned first to major spending areas, and then to local authorities, on the basis of criteria decided by the Board of the Central Union of Urban and Rural Municipalities (KEDKE). Central autonomous funds were introduced by Act 1828/1989, but their amount was doubled between 1998 and 2002 under the Kapodistria Programme. In addition to these funds, various ministries make grants to cover spending in areas for which they are responsible: the Ministry of Education (spending on education), the Ministry of Health and Social Security, the Ministry of Public Order, and the Ministry of Culture (operating costs for the last three ministries).

Distribution among the municipalities is based on the following criteria: population, local authority area, number of wards, geographical situation (mainly whether they are mountainous or islands). There seem, however, to be some major distortions in use of the population criterion: Heraklion’s grant from the central autonomous funds is based on its official population of 43 000, although the town itself puts the real figure at close on 60 000. This kind of discrepancy interferes seriously with the equalisation which centralised funding of local authorities aims at.

The following table details the composition of the central autonomous funds and their distribution to spending areas (source: Ministry of the Interior, Public Administration and Decentralisation, 2001).

Distribution of central autonomous funds for operating costs in 2000 and resources for 2001

I. For operating costs

1999

2000

2001

Levy of 2/3 of 20% on income tax paid by individuals and legal persons

263 406

265 874

295 085

Levy on vehicle road tax (50 %)

41 250

42 000

52 000

3% of property transfer tax

3 450

3 700

6 050

20% levy on bank interest tax

25 000

29 000

23 000

TOTAL central autonomous funds

333 106

340 574

376 135

Balances from previous years (⅔)

 

46 000

67 333

TOTAL operating costs

 

386 574

443 468

II. For investment expenditure

     

Levy of 1/3 of 20% on income tax paid by individuals and legal persons (CLAD)

131 703

130 000

150 000

Balances from previous years (⅓ CLAD)

 

25 000

33 667

TOTAL CLAD revenue

 

155 000

183 667

Mins. of Ed. and Cult. (public capital spending)

   

11 000

Min. of Health and Soc. Sec. (ordinary budget)

   

22 000

Min. of Public Order resources (ordinary budget)

   

10 000

Ministry of Culture (ordinary budget)

   

10 000

TOTAL new powers resources

   

53 000

TOTAL public water and sewerage companies

11 700

11 700

11 800

TOTAL Merged local admins. resources - Acts 1416, 1622, etc.

2 300

2 430

4 000

TOTAL beer tax

2 787

3 447

10 000

TOTAL GENERAL LOC. ADMIN RESOURCES

481 596

559 151

705 935

1st part

     

1. Centres for the elderly in localities <=5000

1 400

1 700

 

2. Special programmes for the elderly

662

700

 

3. Day nurseries, kindergartens, creative centres for children (Hellenic Local Devt. and Admin. Soc. – day nurseries, kindergartens)

70

70

 

4. Schools (12% * 20% * ⅔ income tax)

31 609

33 000

 

5. Desalination plants

900

900

 

6. Hellenic Local Devt. and Admin. (5 0/00 * ⅓ C.A.F.)

772

830

 

7. Incentive measure Art. 3, §4 Act 2240/94

4 725

4 725

 

8. Central and Local Union of U. and R. Ms. (Act 2503/98 - 2% C.A.F.)

6 162

6 231

 

9. Regular subsidy

236 857

248 700

 

10. Municipal benefit for paraplegics

80

80

 

11. Mayors/chairpersons representation expenses (Art. 4, §12 Municipal Code)

80

80

 

12. Municipalities with Gypsy encampments

800

1 500

 

13. Special local admin. prog. (8% C.A.R. & 80% tax on interest)

46 189

54 000

 

14. Civil servants’ overtime during 1998 elections

2 500

0

 

15. Development collectives

300

500

 

16. Citizen services centres (Hellenic Local Devt. and Admin. Soc.)

 

480

 

17. Guarding school buildings

 

1 000

 

18. Civil servants regional classification (old municipalities)

 

2 770

 

19. Salaries of young graduates

 

4 400

 

20. Local administrations outside the Kapodistria Programme

 

5 800

 

21. Settlement of debts (<= 150 millions)

 

4 000

 

2nd part

     

1. Provision

 

15 108

 

TOTAL (1st et 2nd parts)

333 106

386 574

 

N.B. Amounts in millions of drachma

     

Gabriel Kougianos - U.C.M.C.G.

     

The following table details the proposed distribution of central autonomous funds for 2001 (operating costs only). The right-hand column gives the type of distribution applied to each type of allocation. (See key at end of table.)

Proposed criteria and procedure for distribution of central autonomous funds for operating costs and CLAD, 2001.

A Operating costs

     

1. Ordinary subsidy

248 700

272 000

MOE

2. Schools (12% * 20% * ⅔ income tax)

33 000

38 000

SS

3. Day nurseries - kindergartens – creative centres for children (Hellenic Local Devt. and Admin. Soc.- day nurseries, kindergartens)

70

196

SS

4. Hellenic Local Devt. and Admin.(5 0/00 * ⅓ C.A.F.)

830

874

SS

5. National and local Unions (Act 2503/98 – 2% C.A.F.)

6 231

7 000

SS

6. Desalination plants

900

1 000

SS

7. Single island admin. – Incentive measure, Art. 3, §5, Act 2240/94

4 725

5 000

SS

8. Municipal benefit for paraplegics

80

100

SS

9. Local administrations outside the Kapodistria Programme

5 800

6 000

S

10. Settlement of debts

4 000

3 900

S

11. Cooperation between municipalities or islands – metropolitan areas

 

7 000

SS

12. Guarding school buildings

1 000

500

ILP

13. Child reception programmes (Mins. Interior + Foreign Affairs)

 

700

ILP

14. Municipalities with Gypsy encampments

1 500

1 500

ILP

15. Special programmes for centres for the elderly

700

700

ILP

16. Centres for the elderly in localities <=5000

1 700

   

17. Mayors/chairpersons representation expenses (Art. 4, §12 Municipal Code)

80

   

18. Development collectives

500

   

19. Citizen services centres (Hellenic Local Devt. and Admin. Soc.)

480

   

20. Civil servants regional classification (old municipalities)

2 770

   

21. Salaries for young graduates

4 400

   

22. Provision

15 108

   

TOTAL A

332 574

344 470

 
       

B New powers

     

1. Day nurseries, kindergartens – sports centres – municipal police

 

55 000

ILP - NP

TOTAL B

 

55 000

 

C CLAD (collective local administration decision)

     

1. CLAD (local administrations of the whole country)

99 045

120 000

 

2. Special criteria – dual CLAD

 

9 000

 

3. School maintenance (CLAD 2001)

 

9 000

NP

4. Civil defence

 

10 000

NP

TOTAL C

 

148 000

 

D School maintenance

     

1. School maintenance (from Ministry of Education capital inv. budget)

 

11 000

NP

TOTAL D

 

11 000

 

E Special local administration programme

     

1. From central autonomous funds

54 000

78 000

 

2.CLAD

26 000

42 000

 

3. Beer tax, etc.

 

10 000

 

TOTAL E

 

130 000

 

F Special categories of local administration, and public water and sewerage companies

     

1. Public water and sewerage companies

 

11 800

SS

2. Merged local administrations - Acts 1416, 1622, etc

 

4 000

SS

TOTAL F

 

15 800

 

TOTAL

 

704 270

 

G Provision

     

1. Provision

 

1 730

 

GRAND TOTAL

 

706 000

 
       

N.B. Amounts in millions of drachma

     

MOE = Minimum operating expenses

     

SS = special subsidy

     

ILP = integrated local policy

     

NP = new power

     

Gabriel Kougianos - U.C.M.C.G.

     

We do not, however, have the information we need to make a satisfactory assessment of the value of the Greek local finance system. We can simply note that there is little financial autonomy: the room for manoeuvre provided by the 1994 Act was almost completely neutralised in 2000; the proportion of revenue derived from local taxes is fairly high (about 25%) - but in relation to spending which is still quite low. Furthermore, we have no data enabling us to assess local public spending trends since 1998, or changes in the structure of resources. Nor do we have any data on which to base an assessment of the equalisation effected with the help of the central autonomous funds.

The Greek system of local government has changed profoundly since 1994. It will probably have to change further in the next few years, in order to harmonise the different types of administration which characterise it at present. Change at the intermediate levels will probably be conditioned by changes at municipal level. The powers and resources of the municipalities will probably be strengthened, and this will help to foster local democracy. The changes so far have been accompanied by modernisation and a substantial increase in transfers from central government to local authorities. This should in future be followed by a strengthening of the local authorities’ tax-raising powers.

The increased powers of first-level authorities and the introduction of a strong administrative level above the provinces will certainly make the latter a far less important part of the Greek system than at earlier stages in the country’s recent history. This does not mean that they will disappear. Many things could be done to up-grade them: they could be strengthened by reducing their number, by giving them new powers, or by reducing the regions’ administrative powers - the opposite of what has been happening in the last few years. They would also be strengthened if a decentralised state authority were restored at the same level as the extended province. Another option would be to press ahead with regionalisation by establishing an elected regional authority – with which the decentralised state authority would certainly coexist, since it is anchored in the Constitution. In the long run, this option would probably lead to the disappearance of the current provinces. A third option would be to give the country’s largest conurbation a special type of organisation and combine this solution with one of the two others mentioned above. But such reforms are by no means essential. It is clear that the provinces have indeed lost a great deal of power as a result of the reforms carried out in the second half of the 1990s - but their present situation could endure. Finally, there are probably still other possible scenarios which no outsider can discern.

In any case, there is no evidence that any aspect of the recent changes in the Greek system of local government is contrary to the Charter of Local Self-Government. At the same time, the Greek authorities might look to the Charter for inspiration in deciding how to clarify the roles of the various administrative levels, and the functions of local and state authorities.

 

1 C. Bacoyanis, “De la déconcentration à la décentralisation” in A. Delcamp (ed.), Les collectivités décentralisées de l’Union européenne, Paris, La Documentation Française, 1994, pp. 173-174.

2 Note from the Ministry of the Interior transmitted to the CLRAE in April 2001.

3 For the provinces: 15% of road taxes; 10% of sales tax on buildings, land and farms; 4.5% of vehicle registration tax, 2% of VAT; 100% of the fees for technical control of vehicles (Council of Europe, Structure and functioning of local and regional democracy in Greece, 2000, p. 25).

4 Dexia, Local finance in the fifteen countries of the European Union, 1997, p. 181.

5 Taken from the name of the first President after Greek independence (kyvernitis), who laid the foundations of the country’s administrative organisation. He was elected by the Troezene Assembly in 1827, which had just adopted a new Constitution (cf. Clegg, op .cit., pp. 43ff).

6 The years 1910-1912 were decisive for the organisation of modern Greece. The constitutional amendments adopted by the 1910 Constitutional Assembly, dominated by the liberal Venizelos Party, rationalised the nascent parliamentarianism, and laid the foundations of a career civil service and a universal public education system. After the 1912 general election, Venizelos kept a large majority and introduced various reforms, including reform of the municipalities. (For this period, see, for example, Richard Clegg, A Concise History of Greece, Cambridge University Press (UK), 1992, pp. 77ff.

7 Georges Stephanides (2001), “La réforme des collectivités locales en Grèce Capodistria “, pp. 199-204 in J.Cl. Némery (ed.), Quelle administration territoriale pour le 21ème siècle en France et dans l’Union européenne, Paris, L’Harmattan.

8 G. Stephanides, op. cit. p. 202.

9 Data taken from the table published by G. Stephanides, op. cit., pp. 203-204.

10 Op. cit. p.182.



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