Implementing budgetary reforms in Greece

4. Spending reviews in Greece

4.1. Introducing spending reviews in Greece

Over the past decade, Greece has progressively developed its spending review process as a core element of public financial management (PFM) reform. First introduced in the aftermath of the 2008 financial crisis, spending reviews initially focused on identifying savings to support fiscal consolidation.

Following a pilot exercise in 2012, the role of spending reviews was gradually strengthened within the budget process. A key milestone came in 2017 with the establishment of a permanent institutional structure to organise, implement, and monitor the reviews. The Directorate of Evaluation of General Government Actions (DEGGA) was created within the GAO to lead the process, embedding spending reviews into the annual budget preparation cycle. Greece also adopted a defined process for conducting spending reviews, which set out the key principles, methodology, and governance arrangements for the exercise. The process emphasises a collaborative approach, with line ministries actively engaged under GAO’s leadership.

More recently, the objectives of spending reviews have expanded beyond fiscal savings to encompass broader goals, including improving the quality of public expenditure, strengthening cost-effectiveness, and ensuring that resources are directed toward high-priority policy areas. Reviews are increasingly used to identify underperforming programmes, eliminate inefficiencies, and create fiscal space for new initiatives without increasing the overall expenditure envelope. Their scope now covers both cross-cutting areas, such as energy efficiency measures across the public sector, and sector-specific interventions, including targeted reviews of welfare benefits and healthcare spending.

4.2. Past spending reviews in Greece

Greece has been actively conducting spending reviews since 2012, as summarised in Table 5.The 2016-2017 spending review focused on generating efficiency gains and cost savings with a dual objective: creating fiscal space for socially impactful spending and reducing the tax burden without jeopardising fiscal targets. The exercise identified approximately EUR 250 million in savings, which were incorporated into the 2018 budget.

In 2018 and early 2019, the approach shifted towards selective, sector-specific reviews in areas of high political priority. Working groups composed of representatives from the GAO and line ministries were established to carry out these assessments, resulting in identified savings of EUR 184 million.

Since late 2019, Greece has undertaken a green spending review aimed at reducing energy consumption and improving energy efficiency across the public sector. The review placed particular emphasis on interventions in public buildings and facilities. Government entities were asked to complete templates detailing current energy use and potential reduction measures, many of which required upfront investment to generate long-term savings. Recommendations ranged from digitalising government documents to improving water-use efficiency. Initially, the spending reviews were designed as comprehensive, top-down exercises led by the Ministry of Economy and Finance (previously the Ministry of Finance), with the primary objective of identifying savings to strengthen fiscal balances.

The first comprehensive spending review was undertaken in 2012 by the Centre for Planning and Economic Research (KEPE) in co-operation with the GAO and several line ministries. This exercise generated savings proposals totalling EUR 6.7 billion on a gross basis and EUR 5.2 billion on a net basis for the period 2013-2016, covering expenditure categories such as pensions, the wage bill, health expenditures, and other operational costs.

A sectoral spending review was carried out in 2014, led by GAO, targeting six line ministries with a particular focus on their supervised legal entities. This review generating savings proposals worth EUR 50 million, helping Greece to approach the fiscal targets set in the 2015-2018 Medium-Term Fiscal Strategy (MTFS).

The 2016-2017 spending review focused on generating efficiency gains and cost savings with a dual objective: creating fiscal space for socially impactful spending and reducing the tax burden without jeopardising fiscal targets. The exercise identified approximately EUR 250 million in savings, which were incorporated into the 2018 budget.

In 2018 and early 2019, the approach shifted towards selective, sector-specific reviews in areas of high political priority. Working groups composed of representatives from the GAO and line ministries were established to carry out these assessments, resulting in identified savings of EUR 184 million.

Since late 2019, Greece has undertaken a green spending review aimed at reducing energy consumption and improving energy efficiency across the public sector. The review placed particular emphasis on interventions in public buildings and facilities. Government entities were asked to complete templates detailing current energy use and potential reduction measures, many of which required upfront investment to generate long-term savings. Recommendations ranged from digitalising government documents to improving water-use efficiency.

The 2026 budget introductory report states that the aim of the ongoing spending review of the expenditure and revenue of the General Government entities is to create fiscal space through actions to limit expenditure, increase revenue or utilise the assets of the entities.

Table 5. Spending reviews conducted in Greece

Year	Type of spending review	Key objective	Implementing institutions	Savings generated
2012	Comprehensive	To review all expenditure to support fiscal consolidation	The Centre for Planning and Economic Research (KEPE) in co-operation with GAO and line ministries	EUR 6.7 billion on a gross basis and EUR 5.2 billion on a net basis, covering areas such as pensions, the wage bill, health expenditures, and other operational costs.
2014	Sectoral	To review six line ministries, focusing on supervised legal entities, to meet 2015-2018 MTFS targets	Led by GAO	EUR 50 million
2016-2017	Sectoral	To create fiscal space for socially impactful spending and reduce tax burden	Led by GAO	EUR 250 million
2018-2019	Sectoral	To create fiscal space within policy areas of high political priority	Collaborative approach with working groups involving representatives from GAO and line ministries	EUR 184 million
2019	Comprehensive	To reduce energy consumption and improve energy efficiency	Collaborative approach with working groups involving representatives from GAO and line ministries	N/A

4.3. The spending review framework in Greece

Greece’s spending review framework is organised as a three-phase exercise that combines technical analysis with high-level political decision-making. It is supported by clear governance arrangements, as shown in Box 4. The three-phases are:

• The exploration phase runs from January to July and aims to identify, discuss, and document potential options for savings and reallocations across ministries. This phase also involves political-level discussions, during which decisions are taken on which spending reviews will be launched. These options for savings and reallocations across ministries are then reflected in the Annual Programme Plans, which are submitted by 1 September. Additional actions proposed by line ministries may also be included.

• The decision phase follows the submissions of the Annual Programme Plans to DEGGA when a portfolio of measures that will be implemented in the upcoming budget are decided by the Cabinet.

• The monitoring and implementation phase runs from the approval onwards and considers that the results of spending reviews are effectively implemented, which is done jointly by line ministries and GAO. During this stage, line ministries and the general government bodies under their supervision are required to submit a report on their spending review actions every four months.

Box 4. Governance arrangements of spending reviews in Greece

The Directorate of Evaluation of General Government Actions (DEGGA) within the General Accounting Office (GAO) plays a central role in the spending review process. It is responsible for defining the overarching framework and setting the main objectives.

Political leadership is actively involved both at the outset and during the decision-making stages of each review, in line with international good practice.

In Greece, spending reviews are administered by DEGGA and discussed in a working group comprising technical staff from line ministries and DEGGA. This group is responsible for data collection, analysis, and drafting the review report. Throughout the process, DEGGA maintains close and continuous dialogue with line ministries to ensure the feasibility and credibility of proposed measures. Strategic decisions for each review are taken by a steering committee made up of senior leaders from DEGGA and GAO. The use of external consultants is uncommon, with the process relying primarily on in-house expertise.

Line ministries are responsible for implementing the measures adopted through the spending review process. DEGGA monitors this implementation to verify that the intended savings and reallocations are achieved in practice. It also provides training and methodological guidance to line ministries, ensuring a consistent and standardised approach to spending reviews across government.

4.3.1. Exploration phase

In 2025, ministries and supervised general government bodies were requested to map spending review actions on both the expenditure and revenue sides. This mapping included the quantification of expected financial returns and had to be completed by 1 September 2025. This exercise was carried out using a standard template provided in the budget circular. Completed templates were submitted by the Heads of the Directorates-General for Finance to DEGGA by email. Conducted jointly by GAO and line ministries at the technical level, it fosters close collaboration and knowledge exchange.

During this phase, review teams systematically collect and analyse relevant policy and operational documentation, with a particular focus on non-financial data. The analysis examines programme costs and benefits, identifies performance trends, benchmarks outcomes against international peers, and assesses alignment with national policy priorities. This phase also involves political-level discussions, during which decisions are taken on which spending reviews will be launched. Each measure is documented in the spending review report, specifying its scope, projected multi-year fiscal yield, implementation timeline, required legal or organisational changes, and potential risks and impacts.

4.3.2. Decision phase

The decision phase includes the political leadership selecting the measures to be incorporated into the upcoming budget. Decisions are guided by both desirability and feasibility, with proposed measures assessed for their expected effectiveness. Only those judged to have a high likelihood of full and timely implementation are included, thereby safeguarding the credibility of the budget.

4.3.3. Monitoring and implementation phase

The implementation phase begins once political decisions have been made on which measures to adopt. Line ministries are responsible for carrying out the agreed measures, while the GAO monitors progress to ensure that the expected savings and reallocations are realised in practice. Line ministries should complete relevant monitoring templates and send them to DEGGA every four months.

Spending reviews are reported in the Performance Budget under the relevant programmes, with a dedicated section where line ministries outline the reviews undertaken in their area and. Monitoring is currently based on regular reporting for GAO to assess progress, identify deviations, and draw lessons for strengthening future reviews. Although Greece does not yet produce a formal monitoring report, planned IT system upgrades are expected to allow for more systematic, efficient, and accurate tracking of results.

4.4. Strengthening the spending review framework in Greece

Greece’s spending review framework aligns well with the OECD Best Practices for Spending Reviews (Tryggvadottir, 2022[6]), as shown in Table 6. It is supported by well-defined governance arrangements, clear stakeholder roles, and incentive mechanisms, which have underpinned its institutionalisation over the past decade. To enhance the framework’s impact, further steps are needed: setting clear fiscal objectives, ensuring results are available in time to inform budget negotiations, reinforcing follow-up and monitoring, and improving transparency through the systematic publication of reports. Addressing these areas would maximise the contribution of spending reviews as a strategic tool for improving the efficiency, effectiveness, and long-term sustainability of public expenditure.

Table 6. Alignment of the Greek spending review framework with the OECD Best Practices

OECD Best Practices for Spending Reviews	Alignment with the OECD Best Practices	The Greek Spending Review Framework
Formulate clear objectives and specify the scope of spending reviews	Partial	Spending reviews are conducted annually with objectives including aligning expenditure to government priorities and improving programme effectiveness. Limited focus on generating savings. Comprehensive reviews covered 70-100% of central government spending; earlier reviews covered narrow areas (up to 5%).
Identify distinct political and public service roles in the review process	Partial	The Cabinet determines objectives, approves Terms of Reference, and decides which measures to adopt. Reviews are mainly conducted by public servants from the Ministry of Economy and Finance and line ministries. Representatives from the political leadership often participate in spending review process, sometimes as members of the working group. Their role is to timely approve (or not) certain actions. External consultants are rarely used.
Set up clear governance arrangements throughout the review process	Partial	A steering committee and a working group are established at the beginning of the review. A steering committee consists of leadership from the Directorate for the Evaluation of General Government Actions and GAO. The Director of the Office of the General Secretary for Fiscal Policy participates in the steering Committee. The steering committee co-ordinates the reviews. A working group consists of technical staff from line ministries, GAO and representatives from the political leadership that are expected to monitor and support the development of relevant spending review actions and take timely decisions.
Ensure alignment with the budget process	Partial	Reviews are conducted regularly, and the specific dates are set in the Budget Preparation Circular, but recommendations are often finalised too late to inform budget negotiations. There is no explicit link to multi-year planning. Findings are included in budget documentation submitted to Parliament, notably, in the Performance Budget.
Implement recommendations in an accountable and transparent manner	Partial	Line ministries are responsible for implementing adopted measures. GAO monitors implementation on an ad-hoc basis.
Ensure full transparency of spending review reports and the review framework	Partial	High-level objectives and expenditure areas under review are presented in the budget documentation. Spending review reports are not systematically published. Guidance materials are made public.
Update the spending review framework periodically	Full	The framework is currently being assessed against OECD Best Practices to identify gaps and necessary improvements.

4.4.1. Key strengths of the Greek spending review framework

Regular and versatile use of spending reviews

Spending reviews are carried out on a regular basis and are firmly embedded in the budget preparation process, with results often feeding directly into budget negotiations. This regularity has helped institutionalise the practice across line ministries and other public entities. Greece’s experience with different types of reviews - horizontal, sectoral, and cross-cutting - also enables the framework to be adapted to different policy contexts, including the integration of environmental considerations where relevant.

Clear roles and responsibilities

Leadership from GAO provides continuity, methodological consistency, and a clear point of accountability. Importantly, the political leadership is actively involved in determining the objectives and scope of each spending review, giving the process political legitimacy and alignment with government priorities. However, the formal inclusion of political leadership in working groups can create tensions and undermine the political neutrality of the group.

Clear incentive mechanisms in place

Early incentive mechanisms allowed line ministries to retain part of the identified savings. Today, line ministries are allowed to keep all fiscal space created for new budget initiatives, reinforcing ownership and motivation.

4.4.2. Areas for improvement

Limited focus on savings

In recent years, the role of spending reviews in generating fiscal savings has been relatively weak. No clear numerical savings targets are set at the outset of the process, and reviews have largely concentrated on energy savings. In some cases, these reviews have required upfront spending to achieve the intended efficiency gains. While such measures remain relevant, their overall impact has been constrained by the energy crisis. Moreover, there is currently limited political appetite for undertaking reviews aimed at delivering substantial savings in the current fiscal context.

Limited integration with the budget process

The Budget Preparation Circular sets the dates for the spending review process. In practice, recommendations from spending reviews are often finalised too late to meaningfully influence budget negotiations or be incorporated into the upcoming budget and multi-year fiscal plan. To maximise their impact as a decision-making tool, reviews need to begin early enough to ensure that findings are available in time for political discussion and integration into both the annual budget and the multi-year fiscal plan.

Spending review reports are not publicly available

Although some spending review reports were published in the past, recent reviews have not been made public on a systematic basis. Publishing spending review reports would increase accountability, allow for broader stakeholder engagement, and strengthen public trust in the process.

4.4.3. OECD recommendations to strengthen spending reviews in Greece

• 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.