Over the past decade, Greece has taken vital steps to modernise its public financial management (PFM) system, moving beyond a narrow focus on fiscal consolidation to strengthen accountability, transparency, and the strategic use of the budget. Reforms have sought to address long-standing challenges such as limited capacity in line ministries, weak expenditure controls, and the absence of performance information. In response, Greece has introduced programme and performance budgeting, conducted regular spending reviews, and developed a green budgeting framework, marking a significant shift towards a more results-oriented budget process.
A central pillar of this reform agenda is the gradual introduction of programme and performance budgeting. The Organic Budget Law of 2014 established the legal basis for these reforms. Since then, Greece has progressively rolled out a performance budgeting framework, piloted in selected ministries in 2019, before being extended to all central administrations in 2021 for the 2022 budget. Since then, a separate Performance Budget has been published annually alongside the line-item budget, showing allocations on a programme basis, as well as performance objectives, indicators and targets for each programme. However, parliament continues to vote the budget on the basis of traditional line-item classifications. Further maturation of the performance budgeting framework will require legal amendments and investments in IT systems, which are expected to enable systematic monitoring of budget execution at programme level from 2027 onwards. At present, the integration of financial and performance information within the Performance Budget remains limited, and annual performance reporting practices are still under development. To improve the outcome orientation of the budget, the relevance of available performance information should be further strengthened. Parliamentary engagement with the Performance Budget and available performance information also remains limited, which constrains the full impact of the reform on improving parliamentary debate around the budget and supporting strategic decision making.
In parallel, Greece has advanced the integration of environmental objectives into the budget cycle and has progressively rolled out green budgeting since 2020. Following its participation in the OECD Paris Collaborative on Green Budgeting, the Ministry of Economy and Finance (previously the Ministry of Finance) introduced a green budget tagging methodology in 2022, classifying spending against six environmental objectives under the EU taxonomy. Initially piloted in selected ministries, this approach has since been expanded across all central government entities and decentralised administrations, enabling policymakers to better align budgetary decisions with national climate strategies and EU commitments. However, the green budget tagging exercise remains highly capacity intensive. Future iterations should carefully balance administrative effort with its added value for informing budgetary decision making. The absence of dedicated IT systems further constrains implementation and places additional pressure on the General Accounting Office (GAO) to process and consolidate results. In addition, the framework would benefit from stronger integration with the broader performance budgeting system.
Spending reviews have also become a core element of Greece’s PFM toolkit. Initially launched in the aftermath of the financial crisis to identify fiscal savings, their scope has broadened since 2018 under the leadership of the Directorate of Evaluation of General Government Actions (DEGGA). Today, the reviews are not only used to ensure fiscal discipline but also to enhance the quality and efficiency of public expenditure. They increasingly focus on reallocating resources towards priority areas, identifying underperforming programmes, and supporting sector-specific reforms in areas such as social welfare, health, and energy efficiency. In recent years, Greece has also used spending reviews to advance environmental objectives, for example through reviews of energy efficiency measures across the public sector. This reflects a broader effort to align spending reviews with green budgeting practices, ensuring that fiscal space created supports the green transition. However, to date, recent spending reviews have placed relatively limited emphasis on identifying concrete savings options, and their integration with the annual budget process could be further reinforced to maximise their strategic impact. In addition, the spending review reports have not been systematically made public.
Together, these reforms represent a decisive shift in Greece’s budget system, from incremental control towards a more strategic and performance-oriented approach. While much progress has been made, fully realising their potential will require sustained political commitment, continued investment in administrative capacity, and the completion of ongoing reforms in performance budgeting and financial management systems.
This report takes stock of these developments in the areas of performance budgeting, green budgeting, and spending reviews. It identifies achievements to date, highlights remaining challenges, and provides concrete recommendations to ensure that reforms are embedded, sustainable, and contribute to results-oriented and environmentally responsive budgeting.