Implementing budgetary reforms in Greece

Executive summary

Over the past decade, Greece has made substantial progress in modernising its public financial management (PFM) system. Building on reforms introduced following the fiscal crisis, Greece has moved beyond a predominantly incremental, line-item focused approach and has progressively strengthened transparency, accountability and the strategic orientation of the budget. The introduction of programme and performance budgeting, the development of a green budgeting framework, and the conduct of spending reviews mark a significant shift towards a more results-oriented budgeting system.

Today, the key elements of a modern PFM framework are in place. A programme structure aligned with the Classification of the functions of government (COFOG) supports performance budgeting, and a Performance Budget has been published annually since 2022. Performance information has been developed for all programmes, and there is a strong focus on improving its relevance for budgetary decision making. Since 2020, green budget tagging, aligned with the EU Taxonomy, has been progressively expanded across central government entities. Spending reviews are conducted regularly under structured governance arrangements and embedded in the budget preparation process.

However, challenges remain. Parliament continues to vote on the line-item budget; the Performance Budget is presented for information only. Financial and performance information are not yet fully integrated into the Performance Budget. Planned legal amendments and the upgrade of IT systems, expected to support programme-based budget execution from 2027 onward, will strengthen the link between resources and results.

The use of green budget tagging remains limited. Tagging results are not systematically used to inform prioritisation or reallocation decisions, and linkages with performance information remain weak. Within the spending review framework, recommendations are sometimes finalised too late to meaningfully influence budget negotiations. Monitoring processes remain largely manual, and spending review reports are not systematically published. In recent years, reviews have focused primarily on energy efficiency measures, with limited emphasis on broader fiscal savings or reallocations.

Overall, Greece has established the core building blocks of a modern budgeting framework. The next phase of reform should focus on integration and effective use in practice. The key priorities include strengthening the linkages between financial data, performance information and environmental tagging; aligning spending review timelines with the budget cycle; enhancing transparency and parliamentary engagement; and completing IT upgrades. With sustained political commitment and continued investment in administrative capacity, Greece is well positioned to consolidate these reforms and further strengthen the effectiveness, sustainability and strategic orientation of its budget system.

Key OECD recommendations

Performance budgeting

• Once the upgraded IT systems are fully operational, a transition to programme-based appropriations with Parliament voting on the budget by programme, should be examined. This will embed performance information more directly into the decision-making process and strengthen accountability in resource allocation.

• Improve the quality of performance information by aligning performance objectives more closely with government priorities and ensure that indicators clearly measure progress towards these objectives. Where feasible, incorporate a medium-term perspective into target-setting to better capture policy impact over time.

• Enhance the presentation of performance data in budget documents by integrating financial and performance information at the programme level, and by using visuals (e.g. charts, tables) to improve clarity and usability.

• Establish regular performance reporting that combines financial and performance information, published in a timely manner (e.g. in spring alongside financial reporting). Once IT systems are in place, improve the accessibility of performance information through web-based dashboards to better inform both decision makers and the public.

• Define clear budget execution rules for transfers between and within programmes to improve transparency, consistency, and accountability.

• Increase political engagement with performance information by developing concise one-page summaries for each programme that highlight key results and financial information. This should be presented systematically to ministers and Cabinet to inform budget discussions.

• Strengthen parliamentary oversight by providing timely and accessible performance information in user-friendly formats, offering capacity-building workshops and practical guides for MPs, and enhancing the role of the Parliamentary Budget Office and sectoral committees in budget analysis and scrutiny.

Green budgeting

• Strengthen the link between tagging results and budget decision making by incorporating a dedicated green budget statement into the introductory section of the annual budget. This statement should summarise key findings from the tagging exercise and outline their implications for resource allocation and policy prioritisation.

• Leverage tagging results to inform future spending reviews, with particular focus on programmes that show both high fiscal savings potential and significant environmental impact. This would enable more targeted and strategic reallocation of resources in support of sustainability objectives.

• Integrate green budgeting more systematically into the performance budgeting framework by requiring line ministries to include at least one environmental objective and indicator in the Annual Programme Plans for programmes identified as environmentally relevant through the tagging exercise.

• Use business intelligence (BI) tools to visualise tagging results, enabling stakeholders to interact with the data and access detailed information on the rationale behind tagging classifications.

• Broaden the scope of green budgeting to the revenue side by designing and piloting a methodology to classify environmentally relevant revenues and tax expenditures, including environmentally harmful subsidies and green taxes.

Spending reviews

• Include a numeric indicative savings target in the Terms of Reference to ensure a clear focus on fiscal efficiency.

• Expand the use of cross-cutting reviews to assess the efficiency of horizontal policies that span multiple ministries.

• Safeguard the political neutrality of working groups by clearly separating political and public service roles in the spending review process. Political leaders should be involved at the outset to define scope and objectives, and at the end to formally approve recommendations, but should not be formally involved in conducting the reviews.

• Strengthen linkages with the budget process by aligning the spending review timeline with the budget cycle, ensuring that results are available before budget negotiations begin in April.

• Enhance transparency by publishing final spending review reports on a dedicated section of the Ministry of Economy and Finance website.