Implementation of the reform agenda will provide the basis for a sustainable recovery, and the policies are built around four pillars:
 

  • Restoring fiscal sustainability (section 2): Greece will target a medium-term primary surplus of 3.5 percent of GDP to be achieved through a combination of upfront parametric fiscal reforms, including to its VAT, income tax and pension systems, supported by an ambitious programme to strengthen tax compliance and public financial management, and fight tax evasion, while ensuring adequate protection of vulnerable groups. To enhance the credibility of its fiscal policies, and support the achievement of targets, an ambitious package of parametric measures is adopted in combination with non-parametric measures. The authorities will create an autonomous revenue administration to secure effective collection.

  • Safeguarding financial stability (section 3): A recapitalisation process of banks was completed before the end of 2015, and needs to be followed with the implementation of concomitant measures to strengthen the governance of the Hellenic Financial Stability Fund (HFSF) and of banks. Greece will immediately take further steps to tackle Non-Performing Loans (NPLs)

  • Growth, competitiveness and investment (section 4): Greece will design and implement a wide range of reforms in labour markets and product markets (including energy) that not only ensure full compliance with EU requirements, but which also aim at achieving European best practices. There will be an ambitious privatisation programme, and a new independent Privatisation and Investment Fund shall be established supporting a more efficient use of resources benefitting from a strategic involvement of the private sector. Policies which support investment shall be framed within a comprehensive Growth Strategy.

  • A modern State and public administration (section 5) shall be a key priority of the programme. Particular attention will be paid to increasing the efficiency of the public sector in the delivery of essential public goods and services. Measures will be taken to enhance the efficiency of the judicial system and to upgrade the fight against corruption. Reforms will strengthen the institutional and operational independence and effectiveness of key Institutions and agencies such as the statistics institute (ELSTAT), the Hellenic Competition and other regulatory agencies.

Success will require the sustained implementation of agreed policies over many years – which necessitates political commitment, but also technical capacity of the Greek administration to deliver – and to this end the authorities have committed to make full use of the available technical assistance.Technical assistance on the European side is coordinated by the Structural Reform Support Service (SRSS) of the European Commission. Technical assistance is already in place for some key reform commitments, including on tax policy and Public Financial Management (PFM), the reform of the custom and tax administrations, review of regulatory barriers to competition, licensing simplification and doing business reforms, the social welfare review, fight against corruption, support to the implementation of the Greek energy policy objectives, support to the Greek health reform programme and the modernisation of the judicial system. In October 2015, the Greek authorities and the European Commission finalised a medium-term technical assistance plan in line with the Memorandum signed in August 2015. In December 2015, the Greek authorities informed the Commission that they would allocate an amount of EUR 30 million to technical assistance projects in the areas of PFM and privatization; economic development and procurement; justice and anti-corruption; public administration reform at both central and local level; labour, employment and social protection (including health and education). Transport sector and sectorial areas such as tourism, energy, waste and water are also addressed. These projects are aligned with previous TA requests (that they deepen and / or complement) and with the Memorandum, including this update, the scope being to provide TA in the areas identified in it.
 
Greece needs to build upon the agreed recovery strategy and develop a genuine growth strategy which is Greek-owned and Greek-led and fully uses available resources, including those provided by the EU. This should take into account the reforms included in this MoU, relevant European Union initiatives, the Partnership Agreement of the implementation of the National Strategic Reference Framework (NSRF) and other best practices. Greece must benefit fully from the substantial means available from the EU budget and the European Investment Bank (EIB) to support investment and reform efforts. For the period 2007-2013, Greece was eligible for EUR 38 billion in grants from EU policies, and should ensure that all projects funded under that financing envelope are completed as planned and no later than [XX 2017]. {In this latest version, the exact time has not been decided as it was in the previous one}.For the 2014-2020 period, more than EUR 35 billion is available to Greece through EU funds and Greece should continue in its effort to maximise and speed up absorption of this envelope.The European Commission’s Investment Plan for Europe will provide an additional source of investment as well as technical help for public and private investors to identify, promote and develop high-quality and feasible projects to fund, and the Greek authorities and operators should make full use of this opportunity.
 
The Greek authorities will develop the growthstrategy by June 2016, which inter alia should aim at creating a more attractive business environment, improving the education system as well as human capital formation through vocational education and training, developing R&D and innovation. It should also help design sectorial priorities in areas such as tourism, transport, pharmaceuticals and logistics, and agriculture. Progress in developing the growth strategy has been slow and the earlier goal of having this in place by March 2016 has not been met. The authorities commit to accelerate and complete the strategy and to work in collaboration with social partners, academics and international organisations, which will also provide a proper framework for legislation to spur investment. The strategy should also address the need for coordination of the ambitious reform agenda, reinforcing the role of the existing Secretariat General for Coordination and involving, as appropriate, organisations representing the private sector.

2.    Delivering sustainable public finances that support growth and jobs

The correction of extreme imbalances in public finances that culminated in 2010 with the Greece's exclusion from private capital markets has required an unprecedented adjustment and sacrifices from Greek citizens. Public deficits have fallen considerably, although Greece is still facing primary deficits of about [0.5] percent of GDP in both 2016 and 2017, absent additional measures. At the same time, Greece must prioritise the effectiveness of public spending redirecting resources to functions that can most effectively promote growth, employment and protection of the most vulnerable.