When the crisis hit Greece, local administration was the most vulnerable to it. The capacity of the local administrative mechanism to implement policies in adverse circumstances, as well as the fiscal space for maneuver, was limited because Greek municipalities heavily depend on state grants. Their taxation autonomy is limited, resulting to one of the lowest shares of local government revenues in Europe as a percentage of GDP: just 0.2%, while the European average is 6.2%. Lack of ownership over their income had breaded a culture of affluent spending and managerial irresponsibility. However, recent years have seen a change of tone: Tidy up the financial and managerial problems of local administration is something Greece cannot afford to not have. But the debate of the local elections, which will take place the same day with the elections for the Members of the European Parliament (the second turn of them), shall shift towards initiatives that create space for innovation and responsiveness at local level.
So, how have Greek local authorities coped with the crisis, and what are the uniquely positive good practices that emerged? There was no silver bullet: Greek municipalities are systems consisting of their people (both employees and citizens), regulations, procedures, budget and infrastructure. Interconnecting organically those elements is a bet to be won.
Budget squeezes result to focused service delivery
According to the state budget for 2014 the reduction in the state grants subsidized to the local governments will reach 12.5% and will amount 160 million euros. This reduction, in conjunction with a series of other cuts expected throughout 2014 will remove from local administration funds amounting to 250 million euros.So, local councils struggle with the limited resources and, as they cannot easily raise local income through taxation, they improvise trying to be focused on offering services where they are needed. Local councils cooperate with NGOs, the church and local people to identify those truly in need.
In 2010 the “Kallikrates” reform was introduced: It was a well-orchestrated effort to transfer many competences at local level and merge a great number of Greek municipalities: Greece has reduced the number of municipalities from 1,034 to 325. With Kallikratis, the Greek local government reached, in terms of population, one of the highest scores among European countries: 31.000 inhabitants per municipality while the European average is 5.600. But although the reduction of administrative overheads that such an amalgamation would bring was highly advertised, there has not yet been any evidence of it. What has been proven resourceful is the formation of inter-municipal cooperations to construct and operate infrastructure such as landfill sites with pronounced economies of scale. Special care has been also taken for the 65 island and 31 mountaineer municipalities that exist in Greece, recognizing their specificities and reaching out to EU funding opportunities for islands and remote areas.
Transparency and Shared Social Responsibility
Greece has a long standing history of openness and transparency when it comes to local affairs: As early as 1912, when Eleftherios Venizelos introduced the movement of urban modernization, council meetings have been made public. Nowadays, the “Diavgeia” project obliges all local authorities to make their decisions public on the internet, open to media zealots for scrutiny. Α consultation committee – consisting of several representatives of local stakeholders, e.g. local businesses, trade unions, chambers, NGOs – is also created in municipalities with more than 10,000 residents. This facilitates a more efficient allocation of resources according to local needs and raises social responsibility on local spending.
Straggling with personnel’s needs
Municipalities in Greece were among the first to be targeted with the personnel reduction policies imposed by the MoU between the Greek Government and the country’s lenders- TROIKA. Personnel have been reduced by 18.8% - most of them being retirements. But the real problem is not the number of employees in the municipalities but their capacity and expertise. For many years before the crisis, municipal employees working on a contract basis would strike in order to obtain life-long tenures. These clientelistic pressures did not favour quality of personnel. Just 16% have a university degree and 57.3% of the municipalities have no IT expert.
But wherever local authorities placed their trust to the employees, motivating them, the results were awesome: That’s the case of the municipality of Neo Herakleio in Athens, where the employees have built a system to automatically divert citizens demands to the responsible employee and connect-it to the budget and procurement system, so as to be able to control spending and not to over-procure goods that are devaluated as time passes by without using them. Greek local governments have to make some tough choices, but as polls show, people support those who speak the truth and act accordingly, rather than those who make empty promises. Trust is being built, slowly and painfully, but the initial results are already there and opening up to more innovative solutions seems the right path to follow.