Local Government in Greece 2011 A legal Perspective

From: Local government in the Member States of the European Union: a comparative

legal perspective, INAP, Madrid 2012.

Ángel-Manuel Moreno (editor),

Local Government in Greece

Nikolaos-Komninos Hlepas

1. Historical Background: Local Government in a unitary “napoleonic” state

Consolidation of the Modern Greek state (since1833) has been connected to the

imposition of centralism and the abandonment of an old autonomist tradition that

characterized the kind of “fragmented” society that was typical of many countries

under Ottoman rule1. . In a country used to numerous centres of power, no such centre

could accept the rule of the national government. The iron hand of the Bavarian regents

was the only one that managed to abolish thousands of historical communes

(“Koinotites”) and unify them in some 450 Demoi (municipalities). Furthermore, the

territory of the new-born state has been divided, according to the French model, in 10

prefectures (“nomoi”). The prefects were appointed by the King and were responsible

to supervise the municipalities.

Right after the victory of Constitutionalism (1844), local self-government was

established as an important arena for party competition and an indispensable source of

democratic legitimacy. Unlike the French model, however, the accumulation of

mandates has never been accepted and a clear distinction between the “national”

(MP’s, Ministers) and the “local” (Mayors, Councillors) political personnel was made.

Both categories were important for the kind of “backstage localism” that characterised

Greek politics and rounded off the majoritarian, polarised and strictly representative

political system of the country2. Especially after the introduction -for the first time in

Europe- of universal suffrage (1864), the directly elected mayors could further fortify

their influence. Using the techniques of clientelism, local politicians became so

powerful that MP’s would hardly dare to ignore mayors of their constituency.

1 Koliopoulos and Veremis, 2002. 2 Hlepas, 2003, p. 221.

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In 1912, the innovative liberal statesman Eleftherios Venizelos, trying to oppose

clientelism and corruption but also following a romantic ideology that demanded the

return "back to the roots of Hellenism", ordered the revival of the communes

(‘’koinotites”). The MP's have been, in this manner, liberated from the mayors but

local government has been fragmentised into 70 demoi (cities and towns of more than

10.000 inhabitants) and more than 5.000 communes (the smaller towns and villages)

-the latter depending on state grants. For the next decades, the municipalities have been

constantly losing competence, since most of them were much too small and depending

on state grants. On the other hand, the prefectures and several state quangos took over

the main functions of local administration. The so-called "deconcentration-system" has

been substantially strengthened. According to Greek understanding, such a system is

established when the central state creates non-central administrative units and entitles

them to decide about a considerable part of public affairs within their district. These

deconcentrated units are to be distinguished from municipalities since their heads

-opposite to the mayors- are appointed by the government. The latter was usually much

more willing to hand over competence to the politically faithful "decentralised"

prefects than to the mayors. Local government declined into a useful protest platform

for political parties in opposition and a provider of elementary services. Furthermore,

municipalities have been subjugated to numerous and intensive controls from central

and prefectural bureaucracies.

Like other southern European states, Greece experienced long periods political

instability, civil war and dictatorship. Centralism was further enhanced and went along

with hierarchical and authoritarian rule. After the establishment of stable democratic

system in the seventies, just like other south European countries, Greek efforts to

democratize the political system, pointed out the overcoming of centralism as a major

challenge and necessity on the way to Europeanization and modernization of state and

politics.

2. Never-ending reforms?

Soon after accession to the European Community (1981), Socialists came into

power and undertook several reform efforts: New forms of participation were

introduced, while local authorities were encouraged to provide social services,

establish municipal enterprises, and endorse sporting and cultural activities. New

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institutions for inter-municipal co-operation (syndicates, “programmatic” contracting

etc.) were introduced, while the discretionary power of municipalities was enlarged

through abolition of a priori state controls. Furthermore, a growing number of

municipalities ware becoming familiar with the chances offered by European

initiatives and programmes, international networking and public-private-partnership.

Nonetheless, the revenues of the municipalities remained inadequate for their tasks, so

that they strongly depended on grants from the state. Earmarked grants and national

funds for local development projects continued being essential tools of central state,

party and patron influence, traditionally used according to a “carrot and stick” method.

By the late eighties, however, state funding became more transparent and objective,

through the introduction of new general grants, the so-called “central autonomous

funds”, covering an important part of operating and capital expenditure.

Although important decentralization reforms were continually initiated since

the early eighties, it is obvious that Greek socialists were not really willing (or really

able) to withdraw the dominant, historically rooted centralist patterns of state, party

and social hierarchies. Unlike the Spanish socialists that managed to create the

“Communidades Autonomas” and transform centralist Spain into a quasi federalist

country, unlike the French Socialists who created strong regional self-government and

endorsed wide-reaching decentralisation, Greek Socialists proved to be rather cautious,

preferring incremental, step by step procedures and reform options that would not put

the primacy of central government into question. Unlike Spain and France, Greece was

a small country, missing a strong and independent state bureaucracy, while Greek

regional identities were rather weak (under the exception of Crete) and Greek political

parties were far from reaching West European standards, in terms of internal party

democracy

Efforts to “municipalize” the prefectures (“nomarchies”) and create a second

tier of local government failed twice (1986 and 1990), until finally in 1994 the 161-

years-old state institution of the nomarchia was transformed into a local government

authority. Thus, the so-called “Prefectural Self-Governments” (PSG’s) were

established. Prefectures were “municipalised’ as a whole, prefects (“nomarchs”) and

prefectural councils were directly elected in October 1994, while funds, personnel and

most of the responsibilities of the former state-prefectures were transferred in toto to

the 50 PSG’s. Soon afterwards, “deconcentrated” state administration has been re-

grouped at a higher level, where 13 Regions (“Peripheries”), as units of “peripheral”

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state administration have been organized, also undertaking an important part of

previously “prefectural” state tasks.

Up to the mid-nineties local government reforms in Greece were rather

focusing on decentralization of responsibilities, on political “healing” after a long

period of authoritarian state rule, broadening legitimacy and fostering political

stability. There were gains in consensus through participation broadening, as well as

learning processes for societal and political actors. It was obvious, however, that

efficiency would, sooner or later, become an important issue of the reform agenda. The

shift from legitimacy to efficiency during the late nineties was mainly due to

Europeanization (a great deal of European law has to be implemented by local

governments, who are also eager to take full advantage of European funding), fiscal

stress and pressures deriving from Globalization. Furthermore, a relative failure of

several participatory institutions and procedures could be stated. Malfunction of

participation was connected to main features of socio-economic and political

structures: Namely the fragmentation into sectoral interests, clientelistic relations,

weakness of civil society, political polarization, lack of transparent bargaining and

negotiation mores, an extremely individualistic political culture. More specifically,

local societies proved to be rather weak (in terms of local political identity and social

capital), trapped in traditional vertical networks of interest intermediation (connecting

local actors with central decision making).

Finally, by the late nineties, the state tried to cope with low efficiency in local

government and promoted the most remarkable reform of this period, namely the

“Capodistrias Plan” of amalgamations. In fact, the mandatory unification of

municipalities in 1998, gave a unique example of a radical reform through

amalgamations in southern Europe: The “Capodistrias-Plan” was not just a plan to

merge municipalities, but also a national and regional development and works

programme, with a time scope of five years (1997-2001). The new local authorities

would obtain the financial resources and the qualified staff they needed in order to set

up a “modern and effective” unit of local administration that would act as an

“instrument and a pole of development” (easier taking advantage of EU funds) for its

territory. In this way, the citizen would have more influence on local politics, since the

new municipalities would develop a much wider range of activities (“participatory

effect” of amalgamations). At the same time, continued representation of the old rural

municipalities would be provided through local, directly elected community councils.

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The total number of municipalities has been cut down by 80%, a

percentage that would be even higher if the metropolitan areas of Athens and

Thessaloniki, which were exempted from the amalgamations-plan and included more

than 160 municipalities (and half of the country’s total population), were not taken into

account. The average population of the municipalities climbed up from about 1.600 to

more than 11.000, while the average number of municipalities in each prefecture fell

from about 120 (116,5) to a little bit more than 20 (20,66) units.

Table 1: Number of Prefectures and Municipalities in Greek Regions (2008)

REGIONS“Peripheria”

PREFECTURES “Nomarchia”

MUNICIPALITIES“Demos” or “Koinotis”

East. Macedonia- Thrace 2 55Central Macedonia 7 134

West. Macedonia 4 61Epirus 4 76Thessaly 4 104Ionian Islands 4 39West. Greece 3 74Central Greece 5 95Attica 3 124Peloponnese 5 107North Aegean 3 36South Aegean 2 58Crete 4 71SUMS 50 1034Source: Ministry of Interior (2008)

Quite a few of the new municipalities still seemed, however, to be too small to

exercise several additional responsibilities (local police, minor harbours etc.) which

have been afterwards transferred to the first tier of local government. Metropolitan

areas that had been exempted from amalgamations were suffering from ongoing

fragmentation into a large number of municipalities (Major Athens included more than

120 municipalities). Second tier local authorities were to small and too weak to support

municipalities and overtake supra-local functions (especially concerning local

development project, whereas both tiers deprived financial resources and specialized

staff. Public criticism targeted maladministration and corruption, while traditional

system of state supervision proved to be unable to prevent wide-spread illegal practices

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of local authorities that were disappointing the citizenry. In 2007, the center-right

government initiated a reform debate, but reform dynamics collapsed pretty soon, due

to financial crises and strong resistance within the governing party.

3. After the “Kallikrates” Reform (2010-11): Basic facts and figures of local

government

After impressive victory in elections of 2009, a strong socialist government

with an ambitious reform program had to face an unprecedented financial crisis. The

new ruling majority decided to use radical local government reform as remedy against

the crisis. A new, thoroughly prepared reform plan named ‘Kallikratis’, has been

exposed to public consultation (January 2010) and a new law, radically changing

structure and operation of local governance has been adopted (May 2010). The

‘Kallikratis’ Plan promotes compulsory merging of local government units, leading to

the reduction the number of municipalities (“Demos”) from 1034 to 325, while the

second tier has been ‘moved’ up to the regional level (13 regional local authorities –

“Peripheria” instead of the former 50 PSGs). At the same time, deconcentrated state

administration has been re-structured at an even higher level, including 7 units

(“Apokentromeni Diikesi”). This new structure of state and local government, with

fewer entities, conforms more closely to the Lisbon Treaty principles.

The new reform is the first one including both tiers of local government

and deconcentrated state authorities. Furthermore, territorial consolidation is combined

to extensive decentralization of responsibilities and resources. Special emphasis is

being given to the targets of efficiency and economies of scale, modern management of

human and financial resources, improvement of service and professional quality.

Furthermore, this reform is following basic principles and objectives of new public

management, such as systematic control and overall supervision, accountability and

transparency. Simplification of structures (much less units at three levels of

governance) is expected to increase multi-level and cross-departmental cooperation

that will lead to better coordination and effective steering.

Table 2: Number of Deconcentrated Administrations, Regions and Municipalities

(2011)

DECONCENTRATED REGIONS MUNICIPALITIES

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ADMINISTRATIONS “Peripheria” “Demos”Macedonia-Thrace East.Macedonia-

Thrace22

Central Macedonia 38West. Macedonia - Epirus West. Macedonia 12

Epirus 19Thessaly- Central Greece Thessaly 25

Central Greece 25Peloponnese-West.Greece-Ionian Islands

Ionian Islands 7West. Greece 19Peloponnese 26

Attica Attica 66Aegean North Aegean 8

South Aegean 34Crete Crete 24SUMS 13 325Source: Ministry of Interior (2008)

After the “Kallikrates” reform, Greek municipalities reached, in terms of

population, one of the highest scores among European countries (mean value of 31.000

inhabitants), joining a distinguished group of states including Ireland (45.000),

Lithuania (60.500), Holland (33.500), Portugal (36.000), U.K. (135.700), Sweden

(31.000) and Denmark (19.500). It is worth mentioning that most of these countries

(under the exception of Portugal) are characterized through strong local governments

who are responsible for an important part of public responsibilities (especially

concerning social welfare) and spend an important percentage of GDP3. In view of

these facts, territorial rescaling of Greek municipalities becomes even more

impressive:

Table 3: Distribution of municipalities by orders of magnitude before (2010) and

after (2011) the implementation of the “Kallikrates” reform

Population Municipalities 2010 % Municipalities 2011 %Up to 5.000 548 53 45 14Up to 10.000 259 25 26 8Up to 50.000 186 18 192 59Up to 100000 31 3 49 15 Bigger 10 1 13 4 Totals 1034 100 325 100

3 S. Dexia, 2008.

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Source: Ministry of Interior, 2011.

4. Basic legal framework of local government

The Constitution (June 1975) of the “Third Republic” (1974-today) ensured the

twofold incorporation of local government into the democratic system: on the one

hand, democratic procedures and rules for the putting into practice the sovereignty of

people at the local level (eg. “through universal suffrage and secret vote”, Art. 102

par. 2) are introduced; on the other hand, the Constitution itself defines a significant

part of the executive function, that is, the management ('administration') of local

affairs, as the exclusive responsibility of local government authorities (Article 102 par.

1). Thus, local government could be described as a junction of local policy and local

administration (Spyropoulos 1995: 117). The Constitution clearly prescribes a

balanced relation between these two fundamental components: Decision-making

competence and available resources should, consequently, render possible the

formation of a 'local political will' and its´ transformation into management of public

local affairs4.

The notion of local affairs, in conjunction with a system of multi-level local

government is supposed to restrict the competence of stricto sensu state administration

and therefore the share of executive power, which this concentrates. In view,

moreover, of the identification of the parliamentary majority with central government,

and of the magnitude of resources and activities controlled by it, such restrictions of

central state power and governing party influence are obviously useful for a smooth

and balanced running of the democratic system. Thanks to local government, important

shares of executive power can be circulated to a wide spectrum of political forces, thus

creating new mechanisms of 'checks and balances’ within the unitary state and

ensuring local effort for the management of political power5.

The Constitution of 1975 is characterized by particularly detailed regulations

on local government (only the Republican Constitution of 1925/27 contained such

extensive provisions on this matter), which, however, leave very wide margins for the

options of the ordinary legislator. The latter is, however, restricted today by the

provisions, with force superior to that of domestic legislation (Article 28 of the

4 Hlepas, 2003: 2255 Ibid, p. 226.

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Constitution), of international and European law. The legal status of Local Government

in Greece has certainly been upgraded through the participation of local government

representatives (from both tiers) in the Committee of the Regions, partially

compensating the fact that an official “input” of local government in the position and

policies of Greece as member state before the EU is still not foreseen by law.

From the international law, particularly worth noting is the 'European Charter

of Local Self-Government' (ECLA), which was ratified by Act 1850/1989. According

to its provisions, indirect election can only be introduced for 'executive' organs (Article

3, III) of local government, while the 'right' of local authorities to 'adequate resources

of their own' of which they 'dispose freely' and which must be 'proportionate to their

competence' (Article 9, I and II) is reinforced. The Greek state has not, nevertheless,

ratified the ECLA for second tier local government, while reservations have been

made, concerning Art. 5 (protection of territorial structure), Art 7 par. 2 (sufficient

allowances), Art. 8 par. 2 (supervision) and Art. 10 par. 2 (local government

associations).

Further on it is obvious, that detailed constitutional regulations on local

government in Greece do not necessarily put traditional centralist patterns into

question, since state competence for important subjects of public policy (education and

health system, environmental protection, physical planning, economic development

etc.) is explicitly consolidated by the Constitution (e.g. in Art. 21, 16, 24, 106), while

local government deprives of taxation and regulatory autonomy. More precisely,

Article 78 of the Constitution, safeguards the so called “taxation monopoly” of the

parliament (whose plenary law defines subject, percentages and exemptions of

taxation), whereas Article 102 par. 4 imposes correspondingly on the State the duty of

“concerning itself” to ensure the necessary resources for local authorities. Furthermore,

delegation of legislative power from the parliament to local government authorities is

subject to the same rigid substantial and procedural rules that were drawn by the

Constitution (Art. 43) for any “organ of the executive function” (e.g. ministers, boards

etc.). That means that delegation of legislation power is allowed only if it happens by

parliamentary act and only if it refers to “special matters” or “subjects of detailed or

technical character or of local interest” (Art. 43 par. 2).

Accordingly, case-law of the Greek Conseil d’ Etat (“Symvoulio Epikratias”,

the supreme administrative court) underlined that local government competence for

“local affairs” (Art. 102 par. 1, s. above) refers only to single administrative acts and

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not to normative acts (local norms of general character), which are subject to the

restrictions of Art. 43 par. 2, just as they apply to any other organ of the executive

function. Furthermore, the Council of the State rejected the delegation of new

responsibilities from the state to local government, whenever these responsibilities

refer to “important sectors of public policy”, which are assigned, by the constitution

itself, exclusively to the state (e.g. physical planning, environmental protection, or the

status of teachers in public schools).

After the last amendment (2001), the new version of Article 102 of the

Constitution tried to facilitate delegation of state responsibilities to local authorities

and stated that the “exercise” of certain state powers and responsibilities may be

delegated to local authorities by law, provided that the corresponding resources are

also transferred (par. 1). There is no doubt, that the influence of local government is

strengthened through the exercise of state responsibilities. State administrative duties,

such as civil registry, issuing of certificates, and holding of elections have been carried

out by local government agencies since the beginning of the 19th century, right after the

establishment of a Modern Greek state. According to legal doctrine, local government

authorities act then as “deconcentrated” organs of state administration (“functional

duplication”). Some new attempts to delegate state competence on physical planning

to local authorities, however, faced once more the negative approach of the Council of

the State which stated that “important” state duties (such as the protection of sensitive

environmental or cultural goods) cannot be transferred to local government. The

background of such court decisions seems to be a fundamental mistrust towards the

willingness of local authorities to protect the environment and/or restrain from partisan

practices in other public policies of national interest (e.g. education).

Furthermore, the aforementioned case law, underlined the need to safeguard the

distinctive role of deconcentrated state authorities in implementing state policies at a

sub-national scale: While in some countries it is considered that it is not necessary for

the government to set up field offices of its own, the prevailing view in Greece argues

that the implementation of major government policies and their adaptation to local

circumstances should be entrusted to deconcentrated state administration, thus

safeguarding an unbroken line of unitary political responsibility and control through

the central government that is trusted by the national parliament. This is the reason,

that the Constitution itself (Art. 101) establishes a state administration system that is

based “on deconcentration” and provides the existence, all over the country, of

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deconcentrated units, in favour of which a presumption of competence for “peripheral”

(sub-national but not local) state affairs is being introduced (Art. 101 par. 3). The

administration has to take into account the special circumstances in the islands. Non-

central (« peripheral”) state organs have general decisive authority on “peripheral”

matters affecting their own geographical juridiction, while central organs exercise

general guidance, co-ordination and legal supervision over peripheral organs (Art. 101

par.3). Geo-economic, social and transport conditions are the criteria for the

administrative-territorial division of the country (Art. 101 par. 2). Concrete territorial

structure and organisation form of “peripheral” administration is not defined by the

Constitution and left to the discretion of ordinary legislation.

The same implies for local government territorial structure and organisation

forms: While the 1975 version of the Constitution provided two types of first tier local

government (“demos” for the cities and “koinotes” for the villages), the amendment of

2001 abolished constitutional guarantee of these types and simply stated that two tiers

of local government exist, without further specialising who these tiers are.

Furthermore, according to prevailing legal view in science and jurisprudence, the law

can change borders and types of local government authorities for reasons of public

interest, following objective criteria. Discretion of ordinary law over territorial

structure and organization form of local government is quite wide, especially when

efficiency of existing structures is considered poor. For this reason, amalgamation

reforms of 1998 and 2010 (s. above, part. 2 and 3) did not face any serious legal

difficulties.

In case of efficiency deficits, the 2001 version of the Constitution included an

alternative to obligatory amalgamations and explicitly allowed the establishment by

law of obligatory municipal syndicates (associations) that could overtake a series of

local government duties (and not simply the provision of services or the construction of

public works, as provided by the 1975 version of the Constitution). Furthermore, the

boards of these syndicates should consist of “elected persons” (Art. 102 par. 3) as

members, while the old version provided the representation of all member

municipalities at the syndicate’s board. It is obvious that this amendment has been

made in order to facilitate the creation of “strong” municipal syndicates, able to face

complex issues and take difficult decisions (e.g. concerning waste management plants),

especially in the metropolitan areas of the country.

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Furthermore, it should be pointed out, that the amended Constitution has

foreseen (Art. 102 par. 5), that local authorities would be, henceforth, able to impose

“local revenues”, while the state will have to transfer the necessary funds whenever

local authorities are obliged by law to overtake a new responsibility. An additional

emphasis on local “fiscal autonomy” has been made (par. 5), while the principle of

transparency has explicitly been introduced for local fiscal management. According to

some scholars, the new notion of “local revenues” could put an end to the taxation

monopoly of the state, since local governments would be, hereafter, able to impose

“local revenues” (e.g. on real estate and businesses taking advantage from local

services and infrastructure or on activities affecting the environment) without needing

state law regulations that would precise subject and percentages of this “revenues”. Up

to now, however, no such “revenues” have been introduced.

State supervision over local authorities is explicitly restricted “exclusively to

legality control”, moreover it “should not impede initiative and freedom of action”

(Art. 102 par. 4). State supervision is traditionally deemed necessary, not only in order

to endorse state unity and harmony of law implementation, but, furthermore, in order

to protect civil rights from local arbitrariness and prevent litigation. The Constitution

includes provisions for disciplinary measures against holders of political posts in local

government (e.g. mayors, councillors etc.), that can be suspended or even “deposed”

(fired), provided that a disciplinary body, whose majority of members are ordinary

judges will prepare a corresponding binding opinion (Art. 102 par. 4). Supervision

over local authorities also includes a system of fiscal controls. More precisely, the

Court of Audit is entitled, by the Constitution (Art. 98 par. 1), to control expenditure

as well as contracting (in cases where these contracts refer to “high financial cost”). In

several cases, this financial auditing is overstepping a simple legality check and

moving towards an advisability control. It is argued, that advisability control of local

government expenditure is not prohibited by the Constitution, since local government

revenue is, to a great extend (s. below), stemming from central state money.

Local autonomy is further restricted through constitutional provisions regarding

human resources management (Art. 103). Personnel with the status of civil servants (so

called “permanent personnel”) can only be hired if a corresponding post is provided in

the organization chart (“organigram”) of the local authority (Art. 103 par. 2). Long-

term “private law employees” can only be hired as “special scientific” or “technical” or

“assistant” personnel. Short-term employment according to private law is only allowed

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in view of “unexpected” or “urgent” needs. Since the amendment of 2001, control of

an independent regulatory authority (the so-called “ASEP” authority) over hiring and

contracting of all kinds of personnel in the whole public sector is being constitutionally

guaranteed. Although this means that respective hiring and contracting procedures can

require a very long time, this centralized system has been deemed necessary in order to

terminate traditional clientelistic practices that frustrated meritocracy and overloaded

public administration with big numbers of personnel that despaired necessary skills,

while it undermined professionalism and ethics of public servants. Furthermore, the

Constitution explicitly prohibited the adoption of laws that would turn temporary

employment into any kind of permanent employment, since several laws, in the past,

used to “legalize” ex post a plethora of clientelistic practices that circumvented

constitutional provisions on hiring and employment status in the public sector (s.

below, part 7).

Main statutory laws in Greece concerning local government are the Municipal

Code (Act 3463/2006) and the so called “Kallikrates” law (Act 3852/2010) that refers

to the recent reform. A new Local Government Code that refers both to first and

second tier local authorities is currently being drafted. Furthermore, the Code of

Municipal Employees (Act 3584/2007), the laws on hiring employees (Act 2190/1994

and 3812/2009), the ministerial statute on procurement (56294/2009), the law on

municipal police (Act 3731/2008), as well as the recent law on transparency (Act

3861/2010) should be mentioned.

Concerning protection of local government, it should be pointed out that

Greece despairs a constitutional court and a special remedy for local authorities is not

foreseen by law. However, the question of constitutionality can be addressed by any

court and local authorities can, of course, invoke their constitutional and further legal

status, whenever they appeal against state decisions (e.g. decision of state supervision

authorities, the audit court, or if they appeal against court decisions at a higher court).

As public law entities, local governments have all the substantial and procedural rights

which apply to such entities, while they furthermore can refer to fundamental rights

applicable to private entities, whenever their private property rights are concerned.

5. Competences, powers and services of local authorities

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Despite the numerous efforts of decentralization reforms, centralist tradition

still seems to prevail in Greece. Not only major, but also sometimes even minor

decisions tend to be taken at the highest administrative or political level. Some of the

most important public service delivery systems, such as public education, public health

services and social protection are still subject to direct and comprehensive control by

the central government. In addition, legislation and regulation often go into great

detail. Standards laid down a long time ago remain in force, being partially amended

several times because circumstances have made them obsolete, thus increasing the

complexity of legislation and creating heavy procedures. This situation hinders the

application of formal regulations and dealings, especially by lower levels and smaller

entities and authorities, which tend to use several tools of improvisation and develop

informal practices and networks of coordination in order to fulfill their duties.

The Kallikratis reform is an ambitious and comprehensive project, including

both tiers of local government and the regions. Simplification of these structures (fewer

units at these territorial levels) is expected to increase multi-level cooperation that can

facilitate coordination across and within the new administrative units. Furthermore,

territorial consolidation is combined with extensive decentralisation of responsibilities

and resources. In fact, municipalities are receiving a lot of tasks (especially concerning

permitting of enterprises and economic activities) previously assigned to the –

nowadays abolished- prefectures. Second tier local governments (the new Regions)

overtake important responsibilities concerning economic and regional development. In

respect to deconcentrated state administration, the Kallikratis plan provides for a re-

structuring at a supra-regional level, including seven units (so-called ‘Deconcentrated

Administrations’), headed by a secretary general, appointed by the government. These

seven ‘deconcentrated state administrations’ are mainly responsible for environmental

protection (forest administration, regional planning, water management etc.). Main

responsibilities of local government are being presented in the following table:

Table 4: Main tasks of local government in Greece (2011)

Municipalities (“demos”) Regions (“peripheria”) A. Housing, infrastructure and community amenities

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construction, maintenance and management of municipal roads, parks and public spaces

initiating urban planning, housing, building licensing and control

traffic regulation and planning public parking licensing and control of vehicles

construction, maintenance and management of provincial roads

implementation of public works programs

planning, licensing and control of transportation (buses, tracks)

B. Environmental protection waste management, water supply,

irrigation and sewage systems protected areas environmental controls and fines renewable energy

environmental impact assessment waste management planning environmental controls and fines

C. Education construction of school buildings maintenance and management of

school buildings and facilities transportation of public school

pupils adult education vocational training

vocational training adult education and life-long

learning

D. recreation/ culture municipal cultural

centres/museums cultural and sporting facilities

cultural centres and institutions sporting facilities

E. Social protection nurseries and kindergartens, centres for elderly and disabled

people social inclusion programmes licensing and control of private

welfare institutions and private care units.

social welfare subsidies (for instance for disabled, the poor and minors)

application of social programmes, establishment of centres for social services

Licensing and control of social workers

F. Health local medical centres public health protection and

controls permits and control of

health/medical institutions

permits and control of health/medical institutions, laboratories and professions

G. Economic affairs/development

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licensing and control of local shops and small enterprises (tertiary sector)

municipal enterprises and development agencies

licensing and control of local economic activities and professions,

Regional development planning and policies

implementation of development programmes,

regional enterprises and development agencies

Evaluation and subvention of private investment projects

Support and monitoring of economic activities in the primary, secondary and tertiary sector.

H. Public order and safety municipal police emergency planning and

coordinationI. general public services

registration, certification of civil status

organisation of elections one-stop shops for public

services

registration, certification of civil status

organisation of elections

According to the “Kallikrates” law (Act 3852/2010), additional responsibilities

are going to be overtaken by island municipalities (especially concerning fishing,

transport and small enterprises) and regions with metropolitan areas (especially

concerning transport and environment, in Athens and Thessaloniki). Furthermore,

“administrative assistance” of bigger municipalities to smaller municipalities is

provided during a two-year transition period, until all new municipalities will have the

necessary human resources in order to be able to fulfil their new additional tasks (e.g.

building permits and controls).

Concerning powers given by law to local authorities, it should be pointed out,

that local government is considered to be an integral part of executive function and

public administration. Local authorities are therefore, subject to the same legal

restrictions and entitled to use the same legal instruments. Law 2690/1999 on

“administrative procedure” is also implemented by local authorities. Their actions

include local rulemaking, provided that a parliamentary law following the restrictions

of Art. 43 of the Constitution (s. above, part 3) entitles them to do so, since local

authorities despair normative autonomy. Municipalities and regions are entitled to

expropriate private property for reasons of public interest and impose fines or other

sanctions (e.g. for illegal parking), following the same, more or less, rules that imply

16

by corresponding actions of state administration. Their acts are subject to state

supervision and judicial control by administrative courts.

6. Basic organisation

Basic organization of municipalities in Greece clearly reflects the so-called

Franco type of local government6 or the ‘strong mayor form’7 or the ‘political mayor’

type8, with a dominant role of the mayor within the municipality. The Municipal Code

(Act 3463/2006 - MC) includes certain basic regulations, which apply to all

municipalities, though there are some differentiations according to their size. Many of

these regulations have been changed and completed through the so-called “Kallikrates”

reform law (KL). More accountability, transparency and greater participation by the

citizens in local issues are expected to upgrade local government performance. To this

end, Kallikrates stipulates that local authorities are obliged to make public all their

decisions on the internet. The establishment of a local ombudsman (Sibarastatis) in

every municipality to support citizens is an attempt to reduce mismanagement and

eliminate sources of corruption as this institution will examine relevant allegations. Α

consultation committee – consisting of several representatives of local stakeholders,

e.g. local businesses, trade unions, chambers, NGOs – will be also created in

municipalities with more than 10,000 residents and this should facilitate a more

efficient allocation of municipal resources according to local needs. Among the new

institutions that the Kallikratis law created is the executive board (a kind of city

cabinet) that monitors and coordinates the implementation of municipal policies, the

finance committee, which will be responsible for financial planning and control as well

as for public procurement and, finally, the “quality of life committee” (in

municipalities with more than 10.000 residents) which is responsible for

environmental, city planning and certain permitting matters.

In the law, the municipal council, the financial committee, the quality of life

committee, the executive board and the mayor are cited as 'municipal authorities' (Art.

7 KL). Municipalities which have a population greater than 2.000 have, in addition,

one to ten deputy mayors (Art. 59 KL), that means majority councilors which are

appointed as deputy mayors by mayoral decision and are responsible for a certain 6 Hesse and Sharpe 1991.7 Mouritzen and Svara 2002. 8 Heinelt and Hlepas 2006.

17

section of municipal activities and a certain sub-division of the municipality (an ex-

municipality that has been amalgamated or a (sub-) municipal commune in big cities).

These deputy mayors, the mayor and the Chief Executive Officer of the municipality

are the members of the executive board, which is the “governmental” organ of the

municipality.

The municipal council has general competence and decides upon all matters

apart from those, which belong by an express provision of law within the (special)

competence of the mayor, of the executive board, of the financial committee or of the

quality of life committee (Art. 85 KL). However, by a decision of the absolute majority

of all the members of the municipal council, certain of its responsibilities can be

transferred to the quality of life committee, if these responsibilities are related to the

subject of this committee (e.g. environmental affairs). Furthermore, the setting up of

special committees (on which even private individuals can serve) in order to deliberate

and make proposals on specific issues that are to be discussed at the municipal council

is also possible. The municipal council has a three-member praesidium (president,

vice-president, and secretary), which it elects from among its members for a two-year

term. While the president is a member of the majority, the vice-president is coming

from major opposition and the secretary from minor opposition. The municipal

councils consist, depending upon the size of the population, of 13 - 49 members, to

which, however, in the case of the ' municipalities which are the result of

amalgamations, the chairpersons of sub-municipal councils are added.

Table 5: Numbers and size of municipal councils and committees

Municipal

Population

Members of

the Council

Members of the

Financial/

Quality of Life

CommitteeUp to 2.000 13 7/7Up to 5.000 17 7/7Up to 10.000 21 7/7Up to 30.000 27 7/7Up to 60.000 33 9/9Up to 100.000 41 9/9Up to 150.000 45 9/9More 49 11/11

18

The sessions of the municipal councils are public, held at least once a month and

when this is sought by the mayor, the financial committee, the quality of life

committee, or one-third of the total number of its members, are public. It is worth

drawing attention here to the phenomenon of the conformism of the municipal councils

which manifests itself chiefly in large municipalities, where these organs with their

many members are forced - in view of the extent of their competence - to decide on a

large number of issues without effective discussion of them being possible. All the

decisions of the municipal councils are enforceable as soon as they are issued (signed),

they are published on the internet and they are sent to the state supervision authority,

which also carries out, at the first stage, the relevant review of legality (see below, part

10).

The mayor represents the municipality, executes the decisions of its collegial

organs, and is head of the staff and services of the municipality, which he directs (Art.

58 KL). Of particular importance, moreover, are the duties exercised by the mayor,

following a 'functional duplication', as an organ of the state, such as, for example, in

matters of conscription ('register of males'), elections, registration, etc. It is worth

noting that the mayor is not a member of the municipal council, but he is invited to its

meetings and takes part in debates, while he may require the inclusion of specific

matters on the agenda. In nearly all municipalities, the mayor is 'assisted' by deputy

mayors. The deputy mayors deal with a particular area of the municipality's activities

and exercise the duties of the mayor, which he has delegated, to them.

The mayor and the members of the municipal council are elected directly by the

registered residents (and by citizens of the European Union or third-country aliens who

reside permanently in the municipality) for a five-year term. Every candidate for the

post of mayor leads a list of candidates for all the seats on the municipal council. The

law explicitly prohibits candidates who are not on such a list from standing, as well as

the use of party, religious, or ethnic symbols in the emblems of the municipal lists.

Nevertheless, the political parties officially announce the names of the candidates who

have their support.

The chief objective of the electoral system is to ensure the governmental

stability within the municipalities. The 'successful list' occupies three-fifths of the seats

on the municipal councils, while the 'runners-up' are restricted to a slender two-fifths

minority. Only the list obtaining absolute majority of all the valid ballot-papers

19

achieves victory in the elections, even at a second 'run-off' between the two lists that

received the most votes the first time. In this way lists that are supported by the most

parties are encouraged to stand in municipal elections; however, last-minute deals, that

is, between the first and second round, are not uncommon. It is, however, worth noting

that this electoral system, taken in conjunction with the fact that the mayor, elected for

a five-year term, does not need the 'declared' confidence of the majority of the

municipal council, gives rise to the conditions for a 'monocracy' of the mayor in the

municipality, particularly in cases where he/she has a strong personality.

Municipalities, which have more than 100.000 residents, as well as municipalities

including former municipalities that have been amalgamated (and have more than 2.000

residents), are sub-divided, into municipal communes, where councils of municipal

communes are being elected (seats are occupied according to the result of the elections

within the whole municipality). By and among its members, this council elects its president,

who is entitled to take part (including voting rights) in municipal council sessions,

whenever a matter directly affecting his/her own municipal commune is being debated and

decided. Councils of municipal communes include 5-15 members (depending on local

population) and have several local responsibilities (including decisions on local open-air

markets, some small local enterprises etc.), while the municipal budget is obliged to include

special parts, explicitly referring to each one of the municipal communes.

Former municipalities that have been amalgamated and have less than 2.000

residents, are sub-divided, into local communes, where 3 members’-councils of local

communes are being elected (if they have more than 300 inhabitants, in smaller villages, a

single local representative is being elected. The main difference of these local communes,

compared to the aforementioned municipal communes, is the fact that their councils or local

representatives are being elected according to the result of the elections within the local

commune, according the proportionality system.

Within the Regions (“Peripheries”) that were newly established, as second tier

local governments, horizontal power relations seem to follow traditional patterns,

overtaken from first tier local governments (municipalities). Main regional organs are

the head of the region (Peripheriarch), the deputy peripheriarchs, the regional council

(41-101 members, depending on population size), the executive board and the

financial committee (Art 113 KL). The head of the region (Peripheriarch), the deputy

peripheriarchs in former prefectures and the regional council are directly elected, for a

five-years term. The electoral arrangements are reflecting the aforementioned system

20

implemented in municipalities (s. above), which means that an absolute majority is

required for victory, even at a second run-off, between the two foremost candidates.

Roles and competence of the peripheriarch, the regional council, the executive board

and the financial committee are clearly aforementioned patterns in municipalities (s.

above). Regional ombudsmen and regional consultation committees overtake

respective roles and responsibilities, at the regional level, just as their municipal

counterparts (s. above). A distinction has to be made concerning directly elected

deputy peripheriarchs, since they are responsible, by law, for regional services and

policies affecting former prefectures. The peripheriarch can, furthermore, appoints

three (3) additional deputy peripheriarch, the means majority councilors which are

appointed as deputy peripheriarchs by his/her own decision. All deputy peripheriarchs

are responsible for a certain section of regional activities, with powers delegated to

them by special decision of the peripheriarch. It is also worth mentioning that the

regional council can constitute up to two (2) committees and delegate to them

respective responsibilities of his own, including decision-making.

Cooperation across levels of local government (municipal and regional), as well

as intermunicipal cooperation are being regulated and encouraged by law. Cooperation

including both tiers of local government is nowadays explicitly foreseen by law, that

provides the (voluntary) establishment of cross-level “syndicates” (“diavathmidiki

sindesmi”, Art. 105 KL), which can deal with public works, service provision,

fulfillment of concrete tasks or implementation of development programs and projects.

Especially within the Attica Region, an obligatory special cross-level “syndicate” is

foreseen, for waste management, while in the rest of the country, obligatory special

inter-municipal syndicates (on in each region) will deal with waste management.

Intermunicipal syndicates (“diadimotiki sindesmi”) can also be created on a voluntary

basis, dealing with public works, service provision, fulfillment of concrete tasks or

implementation of development programs and projects. The law if offering,

furthermore, a wide range of contracting and networking possibilities both to

municipalities and regions. Municipalities or/and regions can become parts of

“contracts of intermunicipal or cross-level cooperation”, where one part can offer

support to the other part or/and fulfill some of his tasks (Art. 99 KL). Quite common

are the so-called “programmatic contracts” (Art. 100, “programmatikes simvasis”),

concerning concrete projects (e.g. development projects, constructions etc.), where not

only local authorities, but also other public authorities (also Universities) and public

21

sector entities (public enterprises etc.) can become parts of. Finally, municipalities and

regions can also be members of looser cooperation schemes, such as “networks” (Art.

101 KL, “diktia”) following targets of public interest (including networks with foreign

local governments)

7. Human Resources

The public service system in Greece is a career system: officers are recruited at the

base of a pyramid and advance progressively to higher posts. The current constitutional

status for civil servants is also applied for employees of local self-government

authorities (Art. 103 par. 6 of the constitution). Civil servants have tenure and they

have an obligation of political neutrality. The whole formal status of local authorities’

staff, although governed by a special code, is assimilated in its major aspects to that of

the staff of the state public service, although the administration units of local

government authorities have many peculiarities and, usually, a smaller size.

Civil servants are recruited at the lower echelons and advance through

promotions at the higher levels of bureaucracy. Public sector personnel, including

those in central government and its deconcentrated units, and in self-government

corporations, are classified into categories and grades. Categories are determined

according to level of education and professional and specialised skills may require

specific qualifications. Grades and posts are not automatically linked; such that, for

example, grade A (a high grade) employees do not necessarily hold the post of a unit

head. Apart from seniority, education level and performance appraisal are important

criteria for career advancement.

In addition to the established civil servants, public services employ people on a

contract basis, i.e. private law contracts of indeterminate or fixed duration, or private

law contracts for specific works that have to be accomplished (so-called ‘works’-

contracts). Officers with private law contracts of indeterminate duration occupy special

posts allowed for in the service organisation chart (scientific staff, for example) and

enjoy, actually, the same benefits as the public servants do. Employees with private

law contracts of fixed duration should be recruited in order to meet temporary,

unforeseen or urgent service requirements.

For budgetary reasons, restrictive measures on hiring of public sector personnel

have been introduced by the beginning of the eighties, while nowadays, due to

22

financial crisis and IMF controls, they have been further tightened. Up to the beginning

of this century, local governments, however, have been able to hire personnel through

their municipal enterprises or, to a certain extent, on a private contract basis that had

been approved. For some years, municipal employees (especially the ones working for

the services of garbage collection) working on a temporary contract basis would strike,

in order to obtain, by special law, the status of employees with private law contracts of

indeterminate duration (which can hardly be fired). Through such methods, personnel

of municipalities climbed from 25.000 persons in the beginning of the eighties up to

50.000 by the late nineties and reached, nowadays, the astonishing number of 100.000

employees (including municipal enterprises). It should be pointed out that clientelistic

methods did not favour quality of personnel, for this reason many municipalities

employed a lot of people but despaired qualified employees, such as engineers,

economists and accountants, public health inspectors and computer specialists. On the

other hand, second tier local governments employed a much smaller number of

employees (less than 20.000), since they deprived possibilities of contracting for

elementary services (such as waste management, kindergartens and homes for the

elderly etc.).

In view of such problems, the amended Constitution explicitly prohibits giving

tenure by law, or changing the temporary status of contracts with employees of the

public sector. On the other hand, the selection procedures for the staff (the 'human

resources') of local government had been made subject (since 1994) to an independent

body, the High Council for the Selection of Personnel (well-known under the acronym

'ASEP'). This independent authority oversees the selection process and ensures the

respect of the principles of merit, impartiality and transparency. Nowadays, selection

takes place by competitive examination or a form of point-system, depending on the

specialties and qualifications required. Successive laws have tightened up recruitment

procedures and the system of contract appointments, in order to prevent over-staffing

and guarantee impartiality and merit. The High Council for the Selection of Personnel

closely monitors recruitment and selection.

The recruitment procedures, however, need a lot of time in order to be

accomplished. Since many additional duties have been transferred, during the last

decade, to the local government, it was necessary to accelerate the procedures, in order

to face the never-ending, paralyzing under-staffing of local government authorities. For

this reason, recently, recruitment procedures have been “deconcentrated”, while the

23

High Council for the Selection of Personnel simply supervised, ex post, the legality of

these procedures.

Apart from rigid legal restrictions concerning recruitment, local government

has practically no possibility to develop a human resources management system of its

own. Negotiations between employees and employers are organized nationally, given

that salary increases and other claims are settled at the level of central government. In

the case of local government, although the employer is the authority concerned,

bargaining is conduced with the central government (especially the Ministry of Interior

and the Ministry of Finance). Managerial autonomy on pay is limited to appointments

to posts of heads of units, which carry a special salary allowance, or to granting certain

additional benefits. Compared to Ministers or Secretary Generals of Deconcentrated

Administrations, mayors and peripheriarchs seem to have more possibilities to

mobilize their personnel through some kind of financial benefits.

It should be, furthermore, pointed out that especially the mayors managed to

by-pass legal restrictions and the competence of ASEP regarding hiring of personnel,

mainly through their clientelistic contracting practices (s. above). In fact, a presidential

decree adopted by the center-right government in 2004 allowed giving tenure to long-

time employees on a contract basis (especially when the beginning of such contracts

was earlier than the constitutional amendment of 2001 which prohibited such tenures).

In this way, ca. 40.000 employees on a contract basis received tenure, while just a few

hundreds of municipal public servants had been hired, during the previous decade,

according to legal provisions and procedures controlled by the High Council for the

Selection of Personnel (ASEP). The outcome was not only the practical

marginalization of ASEP, but also, as already pointed out, the overloading of local

government with thousands of low-skilled personnel.

In view of the running “Kallikrates” reform and the decentralization of

numerous tasks, it is obvious that municipalities and regions need additional, high

and/or specially skilled personnel. Mobility across levels of government has been

encouraged or even imposed by the “Kallikrates” law. However, just a few hundreds of

employees have been willing or forced to move to the new municipalities and regions.

In view of the acute economic crisis, the great majority of civil and public servants is

nowadays deeply frustrated and discouraged: Financial cutbacks were mainly focused

on the salaries of public sector employees, given the large number in public

employment and its impact on the public deficit. Public sector syndicalism has, quite

24

often, proved to be successful in blocking or undermining reform procedures, while

recently trade unions have vehemently protested against austerity policies through

numerous general strikes. Any sound implementation of the reform and especially any

internal re-structuring, decentralisation of tasks and resources and new modes of

administrative operation require great flexibility (new tasks and mobility across levels),

consensus and active cooperation of administrative personnel. This includes not only

learning capability, but also a readiness to move from current place of residence. Once

more, leadership is required, in all levels of government, in order to offer a new vision

that would offer future perspectives and would manage to mobilize administrative

personnel.

8. Financial resources, property and assets of local government

Local Government revenues and expenditures are very low in Greece, as a

percentage of GDP. The taxation autonomy of both tiers remains limited. Their total

share of public expenditure is one of the lowest in Europe9. More specifically, the two

tiers of local government expenditure amounted to 3.1% of GDP in 2005 and 6.6% of

total public expenditure. Local government revenue (5.6 billion Euros) reached 3.1%

of GDP and 7.5% of total public sector revenue in 200510

As already mentioned, local government does not enjoy self-sufficiency in

terms of taxation (Art. 78 of the Constitution), and thus the Constitution (Article 102

V)) imposes on the State the duty of 'concerning itself' to ensure the necessary

resources. The law, however, also provides for independent revenues, over which local

authorities 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. The local government

corporations, as public law legal persons, possess private and public property, compile

a budget and balance sheet, are subject to special restrictions as to their expenditure,

are subject to special provisions as to their accounting system, and are monitored in

terms of public finance by the Court of Audit (Article 98 of the Constitution), while

most of them form their own service unit for their funds. Through the “Kallikratis”

law, the role of the Court of Audit has been upgraded. Apart from controlling local

9 Heinelt and Hlepas 200610DEXIA 2008: 352.

25

spending, the Court of Audit will, from now one, control contracting over 100.000

Euros and monitor proper collecting of municipal and regional revenue. Finally, as

special “stability and financial control program” has been initiated by the “Kallikratis”

law, concerning the (few) municipalities that reached a high level of municipal debt.

Municipalities have important assets (town halls, streets, parks and physical

infrastructure). Streets, parks and squares are offered to “public use”, while municipal

“commonwealth” buildings (town halls, kindergartens, schools etc.) are regarded as

municipal “public property”, having a special legal status. Many municipalities possess

important private property (especially real estate, but also stock shares etc.) which has

to be managed in a proper way. Respective actions (selling, buying, renting etc.) have

to be approved by the municipal council and are subject to further substantial and

procedural restrictions (tendering etc.). Second tier local governments do not have

similar assets (apart from provincial roads), while their property (especially real estate

property) is barely worth mentioning.

With regard to spending, it should be mentioned that investment expenditure

does not totally feature in local government budgets. Local investment expenditure is,

to a great part, funded by the state, and from the EU structural funds, but the

corresponding resources do not always appear in local budgets. So, it is very difficult

to have an accurate image of the financial situation of local government in Greece.

According to the law, the revenues of local government can be divided into

ordinary and extra-ordinary ones:

Those which are ordinary, are derived from:

(a) taxes, duties (ordinary and user charges), royalties and contributions;

(b) income coming from municipal/communal/ prefectural property

(c) statutory resources and regular subsidies from the state budget,

Those which are extra-ordinary, are derived from:

(a) loans (just 2% of total revenues), gifts, bequests and inheritances;

(B) selling (or “privatising’ property);

(c) extra-ordinary subsidies from public agencies;

(d) funding from the European Union or other international organisations;

(e) any other source.

The revenues of local government could also be categorized into independent

revenues and transfers. For the municipalities, the most important sources of revenue

are waste management and cleaning duties, the road and street-lighting duties, the beer

26

tax, the property tax and several fees for services, such as market charges, charges for

cemeteries, charges for the use of slaughter-houses etc.. In several coastal areas the

tourist tax is an important source of revenues. 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). The national

electricity company collects these two taxes (as well as waste management and

cleaning duties) for local authorities, 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. It

should be noted that official data on total independent revenues of the local

government corporations have not been published during the last years, so that a rather

confusing image exists.

Second level local governments depend even more on state grants. They 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 because they are still not organised

enough to collect taxes, charges and duties, or because the politicians are afraid that the

citizenry would protest against “over-taxation”. Independent revenues would, however,

give the second tier more freedom of action. Compensatory fees, charges and rates can

be levied by second tier 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. This option seems to be little used, although it would make

it possible to raise independent revenue to fund specific projects.

Taxes, fees, charges and rates set by law are a negligible part of second tier

revenues. Ordinary resources essentially come from the special grants and the so-

called central autonomous funds (s. below). “Extraordinary” revenue, such as Fees for

the use of works financed by loans (used to repay those loans) or loans are little used,

while second tier local governments also used to receive little in the way of national or

EU grants.

27

For the great majority of Local Government Authorities revenues that cover

ordinary expenditure came mainly from the Central Autonomous Funds (CAF) , that is,

the share of local government in revenues of the state budget (collected by state

services). The Central Autonomous funds were, more specifically, derived from:

(A) in the case of municipalities and communes:

- the income tax of natural and legal persons (20%), 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.

(B) in the case of the second tier:

- 15% of revenue from the annual vehicle road tax;

- 10% property sales tax on buildings, building sites and agricultural land

- 2% Added Value Tax (VAT)

- 4,5%, classification duty on passenger vehicles, trucks and buses circulating

for the first time

- duties for carrying out technical checks on vehicles.

The CAF grants are first assigned to major spending areas and then distributed to

individual local governments on the basis of population size, road network and level of

social services. There seem, however, to be some major distortions in use of the

population criterion: The official population is some major cities is sometimes 20-40%

lower than the real one. This kind of discrepancy interferes seriously with the

equalisation, which centralised funding of local authorities aims at. CAF grants are

divided into the ‘Regular Grant’ (RG) for operating expenditure and the ‘Public

Investment Specific Programme Grant’ (PISPG) which finances specific projects

(DEXIA 2008: 357). Apart from the CAF, Greek local governments also receive

compensation grants, global investment grants and earmarked grants. The latter cover

expenditure in specific areas, such as transportation costs for pupils and illness and

welfare support grants.

28

Table 6: Revenue and expenditure of local government in Greece

(in million Euros, 2004)

municipalities Second tier (prefectures) Revenuestate grants own taxes fees,

charges, loans

total state grants own taxes, fees,

charges, loans

total

3,957

(68%)

1,862

(32%)

5,819 1,242

(97%)

43

(3%)

1,285

Expenditurecapital current total capital current total887

(17%)

4,298

(83%)

5,185 474

(37%)

797

(63%)

1,271

Source: National Statistics Service 2005

It is a fact that second tier depended almost completely on state grants (95% of

total revenue). This constrained the discretion of elected officials over budget

distribution, since about one third of CAF and an important proportion of other state

grants are reserved for investment expenditure. Municipalities had far more discretion,

since 32% of municipal revenue (compared to only 3% of second tier revenue) stems

from own fees, taxes and charges.

The unprecedented financial crisis and the austerity policies imposed by the

new stability programme, enforced rigid budgetary cuts throughout the public sector.

The Kallikratis plan is expected to reduce the total spending of local government by a

cut of nearly 20%, mainly through reduced personnel costs. At the same time, the

Kallikratis law changes the composition of state transfers to local government. More

precisely, according to this law and the 2011 budget, first tier local governments are

going to receive 12% of VAT, 20% of income tax, 50% of real estate tax, while second

tier local governments are going to receive 4% of VAT and 2,4% of income tax. If all

further revenues are taken into account, local government revenue is going to reach in

2011 a total sum of 9,8 billion Euros, while local government expenditure is expected

to fall down to 9,3 billion Euros (according to the 2011 state budget).

9. Control, supervision and oversight of local authorities activity

The systems of monitoring public administration also, as a rule, cover local

government. Thus, both the judicial and the public finance control of the

29

administration and the various newer institutions (auditors of public administration,

General inspector of public administration, the national 'Ombudsman' and the newly

established municipal and regional Ombudsmen etc.) function in the case of the Local

Government. This complex of controls is completed by state supervision, which is

provided in the Constitution itself (Art. 102 par. 4, s. above section 3V). Given the fact

that the traditional scheme of state supervision through Secretary Generals appointed

by the central government had proved to be party-politicized and inefficient, the

“Kallikratis” law established a “special supervision service” (SSS), in each one of the

seven “deconcentrated administrations”. Each one of the seven SSS’s is headed by the

“Auditor of Legality” (AL), a person of high skills and authority, selected after a

competitive tender. Furthermore, the SSS’s are hiring high-skilled personnel

(especially lawyers, economists and engineers) in order to ensure high-level legality

control.

Several acts (especially concerning tendering, local rules, loans, expropriation,

imposing of taxes and fees, local government property etc.) of the collective organs of

the local government corporations (councils, committees, etc.), the public law legal

persons and enterprises established by local government corporations are forwarded to

the AL, who checks them and cancels illegal acts and decisions (225 KL). The AL can

also cancel any other illegal act of any local government organ or entity (including

enterprises). Moreover, any person having a legal interest may appeal to the AL against

any act of a collegial or single-member organ of a local government entity (under the

exception of enterprises). In this case, following a corresponding application, the AL

can suspend the execution and enforcement of respective acts and decision, provided

that he/she will accept that this appeal has “solid reasons” and this person will suffer

from a serious non reversible damage if the act would be executed and enforced. It is

worth mentioning, that this kind of appeal is a formal precondition, in order to use a

remedy (in case this appeal will be rejected) in the courts (Art 228 KL). In this way,

overload of administrative courts with remedies against local government decisions is

expected to be held down.

State supervision is, of course, exercised over the persons who make up the

organs of the local government corporations (so called “disciplinary” supervision).

Thus, the AL, by a reasoned decision on his part and with the consent of a five-

member special council, imposes certain penalties on them. These are, more

specifically, the penalty of suspension for up to six months for a serious dereliction of

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their duties or the exceeding of their competence by deliberate action or heavy

negligence, and the penalty of forfeiture (or downfall: “ekptosi”)of office in certain

more particular cases which are stipulated by law (e.g., arbitrary absence or abstention

from their duties,). The legislation also continues to provide for the penalty of

dismissal "for grave reasons of public interest"; this is imposed, with the consent of a

special council, by a decision of the minister (Art. 237 KL).

It should be noted that all these special disciplinary councils meet in public,

and consist in the majority (three of the five members) of regular judges, while a

representative of the Association of Local Government Corporations serves as a

member. The relevant procedure involves a defense, representation by a lawyer, and

the examination of witnesses. Recourse against a disciplinary decision is only possible

to the Council of State (which also judges the case as to its substance).

10. Sources of information: to know more

10.1. Landmark case law

Important case law concerning local government is the case law of the Conseil d’ Etat

(“Simvoulio Epikratias” – StE):

StE 3194/1990: Territorial structure of local government is subject to the discretion of

ordinary law that can merge municipalities for reasons of public interest.

StE 108/1991: Municipal enterprises of water supply and sewage may be organized

according to private law, but when they impose fees and duties, they function as public

law legal persons. For this reason, such acts are subject to judicial review by the

administrative courts.

StE 1484/1997: Municipal police tasks, such as imposing fines for illegal parking

cannot be contracted out to private enterprises, since police tasks belong to the core of

public power.

StE 3444/1998: The constitution provides the existence of deconcentrated field offices

of state administration. “Peripheral” state administration cannot be totally abolished or

substantially downgraded by law. Major public policies entrusted by the constitution to

the state cannot be delegated to local governments.

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StE 3661/2005: The notion of “local affairs” (Art. 102 par. 1 of the Constitution) refers

only to single administrative acts. Regulatory powers can only be delegated to local

government if the conditions of Art. 43 of the Constitution are being respected, just as

it applies for any other part of the executive function. Local authorities despair

normative autonomy. Physical planning is entrusted by the Constitution to the state and

cannot be delegated to local authorities.

10.2. Selected bibliography

Bessila-Vika, Evridiki, Local Government, Athens, Sakkoulas 2010 (in Greek).

Hlepas, N.-K., 2003, Local Government Reform in Greece, in: Kersting, N., Vetter, A.,

(eds.), Reforming Local Government in Europe. Closing the Gap between Democracy

and Efficiency, (Opladen: Leske+Budrich), pp. 221-239.

Hlepas, N.-K., 2005, The Mayor. Vol. 1: The Mayor as an elected leader, (Athens:

Papazisis) (in Greek).

Hlepas, N-K., Getimis, P., 2010, Greece: A case of fragmented centralism and ‘behind

the scenes’ localism, in: Loughlin, J., Hendriks. F., and Lidström, A., (eds.), The

Oxford Handbook of Local and Regional Democracy in Europe, (Oxford: Oxford

University Press), pp. 414-432

Sigouris, Panos, The “Kallikratis” programme, Vol. 1 and 2, Athens 2011 (in Greek)..

10.3. Internet resources

WWW.EETAA.GR (Municipal Agency for Local Development)

WWW.ENAE.GR (National Association of second tier)

WWW.KEDKE.GR (National Association of Municipalities)

WWW.HELLENICPARLIAMENT.GR

WWW.PETA.GR (a “mixed” municipal enterprise with research activities)

WWW.PRIMEMINISTER.GR

WWW.STE.GR (the supreme administrative court)

WWW.UEHR.GR (A Research Institute of the University of Panteion, Athens)

WWW.YPES.GR (Ministry of Interior)

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Literature:

Dexia, 2008, Sub-national Governments in the European Union, (Paris: Dexia

Editions).

Getimis, P., Hlepas, N.-K., 2007, From Fragmentation and Sectoralisation to

Integration Through Metropolitan Governance? The Athens Olympics As a Catalytic

Mega-Event, in: Klausen, J. E. Swianiewicz (ed.), Cities in City Regions. Governing

the Diversity, (Warsaw: University of Warsaw), pp. 157-173.

Getimis, P., Hlepas, N.-K., 2010, Efficiency Imperatives in a fragmented Polity: How

Greece re-invented its Local Government System, in: Baldersheim, H., Rose, L. (eds.),

Territorial Choice: The Politics of Boundaries and Borders, Palgrave Macmillan,

Houndmills, Basingstoke, (forthcoming).

Heinelt, H., Hlepas, N.-K., 2006, Typologies of Local Government Systems, in: Back,

H., Heinelt, H., Magnier, A., (eds.), The European Mayor, Verlag für

Sozialwissenschaften, Wiesbaden 2006, pp. 21-42.

Hlepas, N.-K., 2003, Local Government Reform in Greece, in: Kersting, N., Vetter, A.,

(eds.), Reforming Local Government in Europe. Closing the Gap between Democracy

and Efficiency, (Opladen: Leske+Budrich), pp. 221-239.

Hlepas, N-K., Getimis, P., 2010, Greece: A case of fragmented centralism and ‘behind

the scenes’ localism, in: Loughlin, J., Hendriks. F., and Lidström, A., (eds.), The

Oxford Handbook of Local and Regional Democracy in Europe, (Oxford: Oxford

University Press), pp. 414-432

Ministry of Interior, 2007, Bulletin of Statistical Data, (Athens: National Printing

Office), (in Greek)

Ministry of Interior, 2010, The Kallikratis Reform Program, (Athens: National Printing

Office), (in Greek)

Mouritzen, P.E., Svara, J., 2002: Leadership at the Apex: Politicians and

Administrators in Western Local Governments, (Pittsburgh: University of Pittsburgh

Press).

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Sotiropoulos, D., 2007, State and Reform in contemporary Southern Europe: Greece-

Spain-Italy-Portugal, (Athens: Potamos), (in Greek).

Spanou, C., 1998, European Integration in Administrative Terms. A Framework for

Analysis and the Greek Case, Journal of European Public Policy, Vol. 3, 1998, pp.

467-484.

Spanou, C., 2000, L’institution préfectorale en Grèce : De la Déconcentration à la

Décentralisation, Revue française d’administration publique, no 96, octobre- décembre

2000, pp. 597-608.

Spourdalakis, M., Tassis, C., 2006, Party Change in Greece and the Vanguard role of

PASOK, South European Society and Politics, 11/3-4, September-December, pp. 497-

512.

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