Greece needs functioning institutions to check the government
By Mose Apelblat*
On October 16, the European Commission published its annual progress reports on the enlargement countries in Greece’s neighborhood – i.e. Turkey and the states in the Western Balkans which want to join the European Union. In order to quality for membership, they need to uproot corruption and carry out structural reforms of their public administrations. Public administration reform, aiming at increased transparency, accountability and effectiveness, is a key priority in the accession process. It’s also a condition for putting into place the administrative capacity to implement EU legislation.
EU member states have presumably already passed that phase. In reality we know that corruption is also a problem in member states and they too are reforming their public administrations. New ideas on public management influence them to outsource public services and to apply management methods taken from the private sector. The economic crisis has forced them to look for cost savings and to downsize the public administration. E-government has become a powerful tool not only for administrative simplifications but also for enhancing transparency and combatting petty corruption.
What about Greece? Greece became an EU member state in 1981, a few years after the fall of the military dictatorship and even earlier than Spain and Portugal, which had also got rid of their dictators in the mid-70s. The decision to accept Greece was political. The European Economic Community (EEC) – as the EU was called then – was happy to welcome Greece, Spain and Portugal, which had suffered under dictatorships, to the European family of democracies.
The Commission was of the opinion that Greece wasn´t yet ready for membership, even according to the modest accession conditions during those years. The late Tony Judt described Greece's return to democracy with the following words: “On January 1, 1981, in what many in Brussels would come to regard as a regrettable triumph of hope over wisdom, Greece became a full member of the Community.”
The current economic and financial crisis in Greece has drawn attention to the underlying problems in the Greek economy, public administration and society – structural problems which presumably weren't very well known when Greece became an EU member state or which have been aggravated since then. Back then there were no strict political, economic or legal conditions for EU membership. The current so-called Copenhagen criteria were decided at a summit in 1993.
Nor was any massive financial assistance available for preparing candidate countries for EU membership. There was no support for public administration reform and such a reform apparently never took place in Greece. Only with the emergence of the economic crisis in Greece and the need for bailouts did the public opinion in both Greece and the rest of the EU realize that something was fundamentally wrong in the Greek public administration and that economic growth wouldn’t be possible without structural reforms in its public sector.
Opinion polls show that the overwhelming majority of Greeks think their politicians are corrupt. It's no wonder that they don’t trust central or local government. Members of the Greek Parliament have immunity from prosecution, even after they have finished their mandate, unless the full House votes to lift it. That has only started to happen recently. There is no transparency or accountability in political party funding.
The public administration is reported to be corrupt on practically all levels. The bureaucracy is oversized and inefficient, a result of years of political patronage and cronyism. The economy is corporatist with whole sectors closed to competition. Taxation is a sad chapter with complex procedures and immense tax evasion. Companies negotiated with tax officials about how much tax they should pay. Some companies are even exempted from taxation by law.
There is immense pressure on Greece’s neighbors to reform their public administrations in order to be accepted into the EU. This is a process which can take years but is also necessary for domestic reasons, for the common good of their citizens. Greece finds itself now in almost the same situation and is obliged to restructure its public administration in order to qualify for loans from the Eurogroup, the European Central Bank and the International Monetary Fund. A special task force for Greece was established by the European Commission in 2011, with the support of member states, to provide technical assistance to Greece in this process.
The Task Force describes itself as a resource at the disposal of the Greek authorities as they seek “to build a modern and prosperous Greece: a Greece characterized by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos. Reforming Greek public administration will require sustained effort and a determination to change on the part of Greek government and all parts of society.” The work of the Task Force was preceded by a comprehensive analysis by the Organization for Economic Cooperation and Development of the distortions and inefficiencies in the Greek public administration.
In Greece, as in every democracy, there has to be a system of checks and balances in place. Two key institutions in such a system are the supreme audit institution (SAI) – in Greece the Court of Audit – and the Ombudsman institution. The audit office was established in 1833, when it was created along the lines of the French Cour des Comptes. In 1887, the court acquired responsibility for pre-audit or preventive audit, which has remained an important component of its work. The Ombudsman is a more recent authority and was established only in 1998.
Unfortunately both institutions need to review their mandates and procedures to comply with European standards. Again, a comparison can be made with Greece’s neighbors where corresponding institutions are in a process of improvement. This is very much in line with the Commission’s recent progress reports where the role of the Ombudsman is highlighted and the audit office is considered a key driver for public administration reform. There is absolutely no reason why Greece should lag behind its neighbors.
Overall, both institutions must be independent of government, report to the parliament and develop capacity to fulfill their important roles. Through its findings the audit office holds the government to account and through its recommendations it contributes to the improvement of the public administration. The Ombudsman contributes to the same objectives by investigating complaints from citizens and ensuring access to public information. It also contributes to public administration reform by proactive measures such as inspections to investigate systemic maladministration and legislative proposals.
To fulfill its role, the audit office must carry out all types of government auditing, such as financial, compliance and performance auditing. The latter is defined as an independent and objective examination of government budgets, systems, programs or organizations, with regard to one or more of the three aspects of economy, efficiency and effectiveness, aiming at improvements. However, the Greek audit office is almost the only one in Europe which doesn’t carry out any performance auditing.
Interestingly, the Greek member of the European Court of Auditors, Ioannis Sarmas, addressed the role of audit and accountability systems in improving fiscal performance in a speech in October 2010. He confirmed the image of the Greek Court of Audit as an institution which mainly authorizes payments and audits the accounts of public accounting officers. There are no spot checks on expenses. Neither sound financial management nor the effectiveness of the management systems are subject to audit.
A good way of building up a sustainable performance auditing function is through pilot audits and cooperative parallel audits with other state audit offices. All countries in the Western Balkans have started to develop the performance auditing function by establishing a separate performance auditing department or integrating the function into existing audit departments. They are also in the process of updating performance auditing manuals and recruiting new staff or retraining staff in performance auditing.
Performance auditing is regarded as a difficult activity which takes time to develop. A common perception has been that it only can get started once public finance reforms have been carried out, performance data have become available and a system of financial audits has been put in place. In reality the development of different types of audits isn't a straight line, with perfect financial auditing preceding performance auditing. In most countries auditing has developed gradually and some may have started early with performance auditing. The Greek audit office can benefit from the experience of other offices and jump-start to performance auditing.
The institution of the Greek Ombudsman apparently also needs to improve. A report last year by Transparency International on “Money, Politics and Power – Corruption Risks in Europe” listed a number of recommendations for the Greek Ombudsman. Some of these recommendations are similar to those which have been directed to the Ombudsman institutions in the Western Balkans where, to a large extent, they have been implemented. Many of them have been accredited as national human rights organizations and national preventive mechanisms for supervision of prisons and closed institutions.
They have also a wide remit or scope and practically the whole public administration is supervised by them. A special case is the judiciary, which often is outside the scope of control because of the independence of the judiciary. However, many Ombudsman institutions can investigate complaints against court administration (e.g. lengthy trials) and even the conduct of judges. What is important is to strike a balance between the independence of the judiciary and its accountability.
What could be more fitting than to quote the former European Ombudsman Nikiforos Diamandouros, who also was the first parliamentary ombudsman in Greece? He declared recently that there should be a range of options for citizens to exercise their rights in a democracy. The Ombudsman institution is a complement to the judiciary, enabling citizens an easy and cost-free option to express their grievances and submit complaints. In his or her work, the Ombudsperson applies law and the principles of good administration and protects human rights.
* Mose Apelblat is a former official at the European Commission