## 1. The Greek

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**Canonical URL:** [1. The Greek](https://www.imf.org/-/media/files/publications/cr/2017/cr1741.pdf)

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---

### Background: crisis impact and objective
- GDP contracted by 25 percent.
- Unemployment rose sharply to a peak of close to 28 percent in 2013.
- Corporate turnover has collapsed by a third.
- Property prices have halved.
- Disposable income has shrunk significantly.
- Uncollected tax and social security claims are at 70 percent of GDP.
- Non-performing loan ratio (NPLs) has reached the second highest level in the Eurozone.
- Private debt relative to GDP is low compared to other European countries, but debt-servicing capacity of businesses is severely constrained due to the collapse in turnover, resulting in liquidity constraints and insolvency.
- Objective: analyze evolution, current status, and remaining challenges in the regulation of insolvency and enforcement in Greece and identify actions to achieve a functioning insolvency and debt enforcement system that can contribute to economic recovery.

### Succession of reforms and thematic overview
- Reforms reviewed across:
  - Business insolvency framework.
  - Personal insolvency law and its reforms.
  - Individual enforcement regime.
  - Complementary measures: out-of-court debt restructuring framework and framework for sale of non-performing loans.
- Reforms were often piecemeal, uncoordinated, and implemented without comprehensive stakeholder consultation or impact analysis; frequent and uncoordinated reforms undermined legal predictability and certainty.
- Success of reforms depends on development and implementation of insolvency professionals’ regime and complementary regulatory instruments.

### Business insolvency reforms (timeline and features)
- Law No. 3588/2007: introduced a modern business insolvency framework with two basic procedures (bankruptcy along German Konkurs lines; restructuring modelled on French conciliation).
- 2010 — Law 3858/2010:
  - Incorporated the UNCITRAL Model law on cross-border insolvency.
- 2011 — Law No. 4013/2011:
  - Introduced the rehabilitation procedure as a preventive, debtor-initiated restructuring mechanism.
  - Included a special liquidation pre-insolvency procedure for large enterprises (barely used in practice).
- 2012 — Laws No. 4055/2012 and No. 4072/2012:
  - Eliminated the conciliation procedure.
  - Introduced a new rehabilitation procedure with expedited confirmation and a new special liquidation procedure.
- 2015 — Law No. 4336/2015 (commercial insolvency reforms):
  - Reduced deadlines for submission, verification, and objection of claims.
  - Opened reorganization procedures to debtors likely to become insolvent.
  - Limited scope and effects of automatic stay of creditor actions.
  - Introduced participation of qualified insolvency professionals (regime pending secondary legislation).
  - Prohibited automatic termination clauses in contractual relationships upon debtor insolvency.
  - Emphasized best interest of creditors’ test in plan approval.
  - Enhanced protection of new financing.
  - Reform of the Code of Civil Procedure impacted ranking of claims applicable to insolvency.
- December 2016 — Law 4446/2016 and Presidential Decree:
  - Reform priorities included: revision of preventive restructuring, amendments to reorganization plan (eliminate initial examination stage), revision of bankruptcy procedure timeframes and functions, coordination with insolvency administrators’ regime, alignment with discharge provisions for natural persons (no later than three years), and addressing shareholder obstruction to restructuring.

### Personal insolvency regime — history and changes
- Law No. 3689/2010 (“Katseli Law”):
  - Introduced personal insolvency procedure providing blanket protection to borrowers and a compulsory initial extrajudicial phase.
- 2013 reforms:
  - Eliminated the compulsory extrajudicial phase.
  - Introduced the “Facilitation Program” (forbearance scheme): extension of maturities for mortgages with minimum payments for four years for debtors meeting low income thresholds or with income reductions of more than 20 percent since January 2010; the scheme expired and was not used extensively.
- 2015 amendments:
  - Expanded scope of discharge to include tax and social security debts.
  - Introduced filters for strategic defaulters by dismissing incomplete filings if not remedied within a deadline.
  - Provided short deadlines for procedural steps (e.g., hearings).
  - Limited period of the stay of creditor actions.
  - Required minimum reasonable payments during the stay consistent with proposed payment plans.
  - Introduced streamlined process for debtors with limited indebtedness and without mortgage debt.
  - Introduced stricter criteria for protection of primary residences and transitional provisions to migrate old cases.
- Transitional surge:
  - Late 2015 changes generated a wave of personal insolvency filings in the transitional period, creating an additional backlog of about 200,000 cases and prompting special measures (e.g., increase of judges handling personal insolvency).

### Enforcement regime reforms and consequences
- Prior deficiencies:
  - Enforcement regime characterized by complication and lengthy delays.
  - Repeated blanket moratoria on foreclosures during crisis (2008 moratorium; extended in 2011 and 2012).
  - 2013 targeted moratorium (effective January 1, 2014) applied to primary residences with taxable value below EUR 200,000, annual net income below EUR 35,000, total household assets below EUR 270,000, and financial assets below EUR 15,000.
  - Cumulative effect of moratoria increased strategic defaults and undermined payment culture.
- Code of Civil Procedure reform — Law No. 4335/2015 (entered into force January 1, 2016):
  - Streamlined and made debt enforcement procedures more efficient by eliminating possibilities for appeals and delays.
  - Transformed civil procedure from oral to written; enabled use of e-justice.
  - Set deadlines from the beginning to improve predictability; interim measures can be automatically lifted after 60 days if main lawsuit not filed.
  - Restricted debtor defenses to two points in the process (reduced from challenges at every point).
  - Streamlined auction process for foreclosed real estate; enabled e-auctions; reserve price tied to market price and reduced if successive auctions fail.
  - Reduced appeals against court decisions and made appealed decisions enforceable.
  - New ranking of claims in insolvency enforcement proceedings: secured creditors allocated priority for 65 percent of proceeds, general priorities 25 percent, unsecured creditors 10 percent — noted as not fully in line with cross-country experience.
- Implementation delays and obstacles:
  - New CCP in force since January 1, 2016, but applied only as of September 2016 due to lawyers’ protest.
  - Courts require training, adaptation to new procedures, and adequate infrastructure.

### Out-of-court framework (OCW / “Dendias Law”) — features and shortcomings
- Adopted December 2014; became effective early 2015.
- Three mechanisms for debt restructuring/enforcement with varying court intervention:
  - First mechanism (small businesses and professionals): purely extrajudicial, voluntary, debtor-initiated and bank-led process for viable debtors meeting eligibility criteria (request filed by March 31, 2016; should not have been filed or withdrawn under Katseli Law; should not have ceased activities or been convicted of certain financial crimes).
    - Debtor must be in arrears for more than 90 days on bank debt and must be current under a payment plan with tax or social security administration.
    - Banks provided tax incentives to restructure with deep write-offs: at least 50 percent write-off of debts up to EUR 500,000; if less than 50 percent write-off, remaining debt should not exceed 75 percent of debtor’s ‘net asset position’.
    - Restructuring of private debt triggers inclusion of debtor in an installment scheme for tax and social security debt: up to 100 installments.
    - Additional write-off of 20 percent of surcharges, interest and late fees available for debtors participating in the installment scheme through this process.
  - Second mechanism (extraordinary procedure for settlement of merchants' debts): hybrid out-of-court restructuring agreement subject to court confirmation; upon court confirmation, cram down of all (including dissenting) creditors (description truncated in source excerpt).
- Dendias Law shortcomings:
  - Required prior use of tax installment schemes, limiting unified restructuring of financial and public claims.
  - Offered no sufficient incentives for private creditors; tax incentives were insufficient.
  - Implementing regulations were insufficiently adopted; no standard forms or engagement protocols.
  - Came into force amid high political instability, undermining incentives to use OCW.

### Expedited debtor-initiated restructuring procedure (50.1 percent creditor threshold)
- A creditor majority threshold of 50.1 percent of the debtor’s creditors as well as secured creditors creates an expedited, debtor-initiated restructuring procedure.
- Procedure requirements and effects:
  - Accompanied by an evaluation of viability by its creditors and a chartered auditor's certificate that the required creditor majority has been met.
  - A provisional stay may be granted for a maximum period of six months.
  - As a prerequisite to debt restructuring by banks, any arrears to tax and social security creditors should be under an installment scheme on which the debtor must be current.
  - Once a plan is approved, creditors may not take any collective enforcement action, including the declaration of insolvency under the Corporate Insolvency Law for 12 months.
  - Financing provided for 12 months after court confirmation of the plan has priority in repayment, even if the plan fails.
  - The best interest test is used to determine whether creditors who are crammed down are entitled to compensation (but such claims do not affect the plan).
  - Labor dues are required to be settled in full but can be split into 12 installments, without interest.
  - Upon plan approval, the debtor is entitled to an additional 20 percent relief on interest, penalties and surcharges on tax and social security debt.
  - If the debtor's public debt is over EUR 1 million, upon plan approval, the debtor may apply for a write off of 40 percent of surcharges, interest and penalties and pay the balance in 100 equal installments.
  - The tax/social security authorities may decline the debtor's request but must do so within two months and based on a reasoned opinion.

### Extraordinary procedure of special administration (creditor-initiated)
- Designed to take control of the debtor's business and liquidate it through a special administrator; requires court approval.
- Key features:
  - Once confirmed by the court, the special administrator can take control of and liquidate the debtor's assets over a 12-month period.
  - Assets may be liquidated piecemeal or the business (or parts of it) may be sold as a going concern.
  - During this period, individual enforcement actions by creditors are suspended.
  - If 90 percent of the assets remain unsold after 12 months, the debtor will be liquidated; if 90 percent of the assets have been sold, the special administrator may continue to dispose of assets.
  - Distributions to creditors would be made in accordance with the provisions of the Civil Procedure Code.
  - The special administrator is only liable for intentional wrongdoing and gross negligence.

### Code of Conduct and market for non-performing loans (NPLs)
- Code of Conduct (Bank of Greece, 2013; reformed in 2016):
  - Aimed at assisting negotiated solutions to the treatment of non-performing loans.
  - Establishes an arrears-resolution procedure covering: (1) debtor communication, (2) financial information gathering, (3) financial data assessment, (4) proposing solutions, and (5) appeals review process.
- NPL market reform:
  - Market liberalized to attract foreign capital and NPL management expertise; law adopted in December 2015 and subsequently revisited.
  - Law scope: extends coverage to all loans, performing and non-performing, except for mortgage loans over primary residences under the value of EUR 140,000, which are subject to a moratorium under the law until 2018.
  - Administrative regulations have only been recently put in place; the market has not developed yet and practical implications of the sale regime have not been tested.
  - Underlying legal framework problems negatively affect prices of distressed assets, as NPLs will have to be restructured or enforced by acquiring entities.

### Current challenges — findings and statistics
- Reforms have not yielded desired results due to political and economic instability, recentness of amendments, and time needed for testing.
- Late or non-payment is pervasive; Greece tops cross-country lists in average payment term and percent of companies with late payments.
- Business insolvency regime underutilized:
  - About 96.7 percent of businesses in Greece are micro SMEs, which face the largest servicing problems.
  - Official insolvency statistics do not reflect widespread distress; bankruptcy procedures have declined relative to pre-crisis levels.
  - Example: in the first three months of 2016, the Athens district court registered only 16 bankruptcy applications.
  - Liquidation process can take up to 10 years.
  - Result: many insolvent commercial debtors remain outside the formal insolvency system.
- Personal insolvency framework over- and misused:
  - More than 200,000 applications for personal insolvency filed in six years (about 2 percent of Greece’s population).
  - Backlog has led to a paralysis of the system, with debtors receiving a payment moratorium expected to last up to 15 years.
  - System design problems and insufficient judicial guidance have promoted abuse; strategic defaulters estimated as much as 30 percent of applicants.
- Enforcement system ineffective:
  - Repeated moratoria have undermined payment culture.
  - Long and costly collateral enforcement due to mortgages not being properly registered in the land register/cadaster.
  - Lack of a land register or cadaster spanning whole territory of Greece.
  - Foreclosures rare, lengthy, and costly, with little payout to secured creditors due to priority of public creditors.
  - The commonly used pre-notation requires a payment order (PO) from the court of first instance to foreclose; this PO requires payment of a judicial fee of 1.4 percent and may take up to one year to obtain in Athens.
- Implementation and institutional capacity issues:
  - Lack of adequate implementation due to missing secondary legislation (e.g., OCW law, electronic auctions under the CCP) and enforcement of strict legal deadlines.
  - Courts require training and infrastructure; data systems are court-specific and do not span the entire court system.
  - Government council for private debt (established 2014) met rarely and provided infrequent input.
  - Judicial system capacity constrained: endemic delays, lack of adequate technology and data systems, inefficient bureaucracy.
  - High appeal rate: reportedly, more than 50 percent of judicial decisions are appealed.
  - Insolvency profession not regulated beyond lawyers; the 2015 reforms introduced a regime for regulation of insolvency administrators that is yet to be developed by secondary legislation and put into practice.

### Box 1 — The Greek Court System for Enforcement and Insolvency: structure and staffing
- Courts handling insolvency and enforcement:
  - First instance: magistrate courts (formerly peace courts are 154 in the country) and courts of first instance (about 63 courts).
  - Second: civil court of appeals (about 19 Courts of Appeal courts (including 4 newly established courts)).
  - Third: one Cassation Court (Supreme Court of Areios Pagos).
- Allocation of matters:
  - Enforcement and corporate insolvency matters are dealt with by the first instance courts, while cases under the Katseli law are dealt with by the magistrate courts.
- Judicial capacity and staffing (exact counts):
  - There are currently about 880 judges in magistrate courts; this number has been increased by 194 (judges for household insolvency cases) in 2016.
  - The number of first instance judges is 807.
  - The number of court of appeals judges is 459.
  - The number of cassation court judges is 61.
- Institutional characteristics:
  - Judiciary is self-administered but not centrally managed; appointments independent from the Executive (except for the most senior positions).
  - Supreme Judicial Council decides organizational matters; magistrate judges cannot be promoted to more senior positions at higher courts.
  - Judges typically do not specialize and rotate every two years, hindering specialization and case continuity.
  - Courts operate as individual units leading to fragmentation and limited flexibility in assigning resources.
  - Data systems, if existent, are court-specific and do not span the entire court system, leading to absence of an oversight function and ineffective case management.

### Box 1 — Key policy recommendations (paragraphs 22–25)
- Implement the Code of Civil Procedure:
  - Authorities should adopt all remaining secondary legislation necessary for full implementation of the Code of Civil Procedure.
  - Completion of rules on the electronic registry of cases and use of market valuation standards for collateral are needed.
  - Regulation of electronic auctions is a priority; a system allowing flexibility in bids, open competition, and equal access to information would represent a significant improvement.
- Coordination among stakeholders:
  - Re-establish and resource a coordination mechanism including all stakeholders to design a comprehensive, properly sequenced plan for implementation.
- Simplify and streamline liquidation:
  - Take into account that 99 percent of business are MSMEs; current liquidation is too complex, costly and protracted leaving little to no pay out to creditors.
- Reinforce judiciary, auxiliary staff, and infrastructure:
  - The procedural regime of the Code is largely adequate but will need to be tested; deadlines will require additional judicial and administration efforts.
  - Consider new judicial organization in the medium term: further specialization for judges, concentration of subject matters, flexibility in assigning resources, professional management tools, and data systems (e.g., a full e-justice system).
- Regulate and supervise the insolvency profession:
  - Implement regulations covering qualifications, examinations, supervision, training, a code of conduct, liability and insurance, and a sanctioning regime.
  - Provide legal protection for public officials and bank staff engaged in insolvency and debt restructuring activities.
  - Allow further specialization of the judiciary in commercial and insolvency law.
- Promote out-of-court debt restructuring:
  - Design simple, SME-tailored OCW processes with public creditors participating on an equal footing to restore viability.
  - Ensure expertise in viability assessments and adequate financial and economic information about the debtor.
  - Support with proper tax treatment of debt restructuring and protection rules for decision-makers in public administration and financial institutions.
- Revisit ranking of claims:
  - The position of secured creditors (both in individual enforcement and insolvency) creates disadvantages for financial institutions and will limit access to credit; revise ranking of claims alongside other reforms.

### Ranking of claims — Box 2 highlights and Greece specifics
- International comparisons (selected):
  - Germany: No priority for public claims; Full priority (for secured claims).
  - Spain: Priority limited to 50 percent of tax claims. Interest and penalties are subordinated; Full priority (for secured claims).
  - Italy: Unlimited Priority (in time and amount); Full priority (for secured claims).
  - France: Limited priority (taxes accrued over a certain period); Priority, only subject to potential impact of a limited 60-day wages super-priority.
  - Greece: 25 percent of proceeds in sale of secured collateral (priority of tax claims); 65 percent of proceeds in sale of collateral (priority of secured claims).
- Specifics of Greece’s ranking of claims:
  - Ranking operates within the Code of Civil Procedure and applies separately to proceeds of different assets.
  - Regarding collateral, secured creditors are entitled to receive 65 percent of the proceeds of the sale of the encumbered asset.
  - 25 percent of the proceeds are distributed among general preferential creditors, which include:
    - the workers’ remuneration for two years before insolvency, and termination compensation;
    - lawyers’ fees for six months;
    - social security contributions until the declaration of bankruptcy for two years;
    - claims of the state arising from VAT and its surcharges.
  - After all these, all other claims of the state (including taxes and social security contributions) also have priority.
  - Unsecured creditors receive the remaining ten percent of the proceeds.
- Note: In all other European countries contrasted, unsecured creditors would only receive proceeds from the sale of collateral after full satisfaction of the secured claim.

### Tax and social security contribution (SSC) debt — drivers and key statistics
- Drivers:
  - Surge in SSC debts largely due to a weak payment culture and the deep recession, coupled with weak collection enforcement capacity.
  - System of SSC assessment based on notional income may have worsened the problem, as contributors who earn an actual income below the notional income may not have the financial capacity to stay current on their SSC obligations.
- Key statistics on tax and SSC debt stock and collections:
  - About half of the stock of large tax debts—which is more than 60 percent of the total tax debt—is largely owed by debtors in bankruptcy or special liquidation and by inactive companies.
  - More than 55 percent of tax debt is older than 3 years, for which the collection rate is below 2 percent.
  - 40 percent of tax debt is due to penalties and fines, for which collection rates are around 1 percent.
  - A large share of SSC debt could also be considered uncollectible: more than 80 percent of SSC debt is older than three years, with a collection rate of about 2 percent.
  - The share of tax debt that is written-off in Greece is around 10 percent, lower than many peer countries and the Euro Area average of 15 percent.
  - Assessed fines and penalties have more than tripled since 2010.
  - In 2016, the amount of assessed fines and penalties exceeded the amount of assessed current taxes.
  - About two thirds of 2016 penalties assessed through October are due to reassessments of penalties already in arrears.
  - Stock of tax debt in installment schemes at end-September 2016 was about €5 billion, or less than 6 percent of total tax debt.
  - Total number of debtors in tax installment schemes is about 1.3 million (relative to a total number of tax debtors of about 4.4 million). Note: tax debtors may participate in several schemes simultaneously, so the 1.3 million figure likely overestimates the number of individuals taking advantage of such schemes.
  - Drop-out rate for the most recent scheme (legislated in March 2015) reached 13 percent at end-October 2016.
  - Social security contribution schemes have drop-out rates reaching about 50 percent within a year.
  - About 20 percent of tax debt is older than 10 years, for which the collection rate is 0.1 percent.
  - About 30 percent of tax debt is between 5 and 10 years old, for which the collection rate is about 0.5 percent.

### Tax administration issues that exacerbate debt accumulation
- Reforms attempted (overhaul of tax procedure code, redesign of installment schemes, revision of fines and surcharges, institutional reforms toward an autonomous revenue agency, creation of units for large taxpayers/high-wealth individuals/large debtors, creation of a dispute resolution unit) did not deliver expected outcomes due to:
  - Ineffective design (e.g., installment schemes not targeted; autonomy compromised by political interference).
  - Incomplete implementation (e.g., risk-based audits and prioritization of debt collection hampered by legal obligations and practices).
  - Limited capacity constraining reform implementation.
- Fines and penalties:
  - Although simplified by the Tax Procedure Code in 2014, the majority of fines continue to be based on the previous complex system.
  - Tax officials are obliged to impose fines whenever objective criteria are met, regardless of circumstances, contributing to debt accumulation rather than deterring evasion.
- Legal framework for uncollectible debt and write-offs:
  - Procedures for classifying debt as uncollectible are cumbersome and time consuming (require completion of multiple investigations and conditions).
  - Write-offs or cancellations are permitted only if a number of specific conditions are met, and decisions are hampered by extensive legal requirements and fear of personal liability.
  - Greece lags peers in debt write-offs (around 10 percent written off versus a Euro Area average of 15 percent).
- Collection prioritization and enforcement weaknesses:
  - Prioritization of cases has not been fully implemented due to capacity constraints, frequent management changes, an overwhelming number of prosecutor-recommended cases that must be processed with priority, and fear of personal liability.
  - The statute of limitations has been extended every year for the last five years.
  - Enforcement actions available include: (i) garnishments (third-party payments such as e-garnishment), (ii) seizures (freezing bank accounts), (iii) auctions (sale of property proceeds), and (iv) mortgages in favor of the tax administration. Progress in initiating and completing enforcement actions has been uneven; only about a half of tax debtors are under enforcement action.
  - Use of garnishments expanded in the last two years, while other seizure orders have plummeted.
  - Auctioning process for seized real estate is inefficient due to an excessively high required minimum bidding price, depriving the administration of an important tool.
  - Capacity to initiate bankruptcy and liquidation proceedings is very limited; legal framework weakens ability to initiate prosecution for tax evasion (e.g., settlement of tax debt and administrative fines precludes prosecution).
- Installment schemes and amnesties:
  - More than 50 tax and SSC installment schemes have been legislated since 2001; schemes have become more generous (longer installments, lower interest rates, fewer eligibility requirements), raising taxpayer expectations and undermining payment culture.
  - Installment schemes have high drop-out rates and are perceived by taxpayers as de facto amnesty schemes or avenues to obtain tax clearance certificates.
  - Authorities have occasionally relied on tax amnesties (e.g., 2010-11) and more recently legislated a Voluntary Disclosure Initiative with reduced fines and interest and generous eligibility, which may be perceived as amnesty and can jeopardize compliance in the absence of effective enforcement.

### Policy recommendations on tax and SSC debt
- Urgent need for durable solutions to prevent new tax and SSC debt accumulation and reduce existing stock.
- First: measure full scale by assessing tax debtors’ financial situation.
  - Develop a common methodology to classify debtors according to financial viability, using information on public and private debts, assets, projected cash flow, compliance record, and reasons for arrears.
  - Use objective criteria and focus on balance sheets and cash flow projections (e.g., income to debt ratios, EBITDA) to distinguish solvency versus liquidity problems.
  - A formal framework could help protect officials from fear of personal liability when categorizing debts as uncollectable or eligible for write-off.
- Second: use all available tools to restructure existing tax debts in a targeted manner to preserve taxpayers’ viability; avoid across-the-board installment schemes.
  - Enforcement actions: intensify enforcement for strategic defaulters and unviable debtors. Identify taxpayers able to pay but failing to do so and apply enforcement measures (wage, income or asset seizure including e-garnishment; liens; mortgages in favor of tax administration; auctions). Subject non-viable enterprises to fast-track liquidation procedures. Strengthen tax administration capacity to initiate bankruptcy and liquidation (increase staff with legal expertise; provide decision-making authority and incentives such as measurable targets).
  - Debt restructuring: make restructuring available for viable and potentially viable debtors based on capacity to pay, while minimizing moral hazard. Complete efforts to develop and implement a voluntary out-of-court debt restructuring framework that applies to both bank debt and public claims so public claims are addressed together with bank and other debts to restore viability. Even where debtors have only public claims, seek debt restructuring under the out-of-court framework to ensure equal treatment and optimize collection from tax and SSC debts. This will likely entail selective write-offs of public claims (particularly fines and penalties which are largely uncollectible). Put in place safeguards to prevent moral hazard: information requirements on financial situation, clear eligibility criteria, and strict consequences for breaching restructuring agreements.
- Third: align tax administration practices with modern approaches used in advanced economies.
  - Modernize the legal framework for determining (un-)collectability and cancellation of tax and SSC debt based on peer good practices. Delegate decision-making on debt collectability and cancellation by debt size to lower level managers while balancing operational efficiency and safeguards against mismanagement. Implement ex-post audits by internal or external public entities to monitor implementation of debt restructuring and cancellations. Provide legal protection for officials who follow established guidelines to categorize debts as uncollectable or eligible for write-off.
  - Modernize collection and audit practices to improve collection prospects and reduce administrative burden. Apply the new legal framework on fines (Tax Procedure Code) to pre-2014 cases and review the legal framework for charging excessive fines on already indebted inactive companies so fines act as a deterrent rather than contributing to debt accumulation. Fully implement risk-based audits and debt collection prioritization by focusing on new and large rather than old and small tax debts. Revise legal framework to ease burden of prosecutor-recommended cases (e.g., allow prosecutors to send some non-priority or low-collection cases to the tax administration as information only and without a binding audit requirement).

*Source: cr1741 - 1. The Greek (IMF staff report, January 23, 2017).*

### 1. The Greek

### The Greek Court System for Enforcement and Insolvency

### Background: Crisis impact and purpose of the paper
- GDP contracted by 25 percent.
- Unemployment rose sharply to a peak of close to 28 percent in 2013.
- Corporate turnover has collapsed by a third.
- Property prices have halved.
- Disposable income has shrunk significantly.
- Uncollected tax and social security claims are at 70 percent of GDP.
- Non-performing loan ratio (NPLs) has reached the second highest level in the Eurozone.
- Private debt relative to GDP is low compared to other European countries, but debt-servicing capacity of businesses is severely constrained due to the collapse in turnover, resulting in liquidity constraints and insolvency.
- Objective: analyze evolution, current status, and remaining challenges in the regulation of insolvency and enforcement in Greece and identify actions to achieve a functioning insolvency and debt enforcement system that can contribute to economic recovery.

### Succession of reforms and their thematic overview
- Reforms reviewed across:
  - Business insolvency framework.
  - Personal insolvency law and its reforms.
  - Individual enforcement regime.
  - Complementary measures: out-of-court debt restructuring framework and framework for sale of non-performing loans.

### Business insolvency reforms (timeline and features)
- Law No. 3588/2007: introduced a modern business insolvency framework with two basic procedures (bankruptcy along German Konkurs lines; restructuring modelled on French conciliation).
- 2010 — Law 3858/2010:
  - Incorporated the UNCITRAL Model law on cross-border insolvency.
- 2011 — Law No. 4013/2011:
  - Introduced the rehabilitation procedure as a preventive, debtor-initiated restructuring mechanism.
  - Included a special liquidation pre-insolvency procedure for large enterprises (barely used in practice).
- 2012 — Laws No. 4055/2012 and No. 4072/2012:
  - Eliminated the conciliation procedure.
  - Introduced a new rehabilitation procedure with expedited confirmation and a new special liquidation procedure.
- 2015 — Law No. 4336/2015 (commercial insolvency reforms):
  - Reduced deadlines for submission, verification, and objection of claims.
  - Opened reorganization procedures to debtors likely to become insolvent.
  - Limited scope and effects of automatic stay of creditor actions.
  - Introduced participation of qualified insolvency professionals (regime pending secondary legislation).
  - Prohibited automatic termination clauses in contractual relationships upon debtor insolvency.
  - Emphasized best interest of creditors’ test in plan approval.
  - Enhanced protection of new financing.
  - Reform of the Code of Civil Procedure impacted ranking of claims applicable to insolvency.
- December 2016 — Law 4446/2016 and Presidential Decree:
  - Reform priorities included: revision of preventive restructuring, amendments to reorganization plan (eliminate initial examination stage), revision of bankruptcy procedure timeframes and functions, coordination with insolvency administrators’ regime, alignment with discharge provisions for natural persons (no later than three years), and addressing shareholder obstruction to restructuring.

### Personal insolvency regime (history and changes)
- Law No. 3689/2010 (“Katseli Law”):
  - Introduced personal insolvency procedure providing blanket protection to borrowers and a compulsory initial extrajudicial phase.
- 2013 reforms:
  - Eliminated the compulsory extrajudicial phase.
  - Introduced the “Facilitation Program” (forbearance scheme): extension of maturities for mortgages with minimum payments for four years for debtors meeting low income thresholds or with income reductions of more than 20 percent since January 2010; the scheme expired and was not used extensively.
- 2015 amendments:
  - Expanded scope of discharge to include tax and social security debts.
  - Introduced filters for strategic defaulters by dismissing incomplete filings if not remedied within a deadline.
  - Provided short deadlines for procedural steps (e.g., hearings).
  - Limited period of the stay of creditor actions.
  - Required minimum reasonable payments during the stay consistent with proposed payment plans.
  - Introduced streamlined process for debtors with limited indebtedness and without mortgage debt.
  - Introduced stricter criteria for protection of primary residences and transitional provisions to migrate old cases.
- Transitional surge:
  - Late 2015 changes generated a wave of personal insolvency filings in the transitional period, creating an additional backlog of about 200,000 cases and prompting special measures (e.g., increase of judges handling personal insolvency).

### Enforcement regime reforms and consequences
- Prior deficiencies:
  - Enforcement regime characterized by complication and lengthy delays.
  - Repeated blanket moratoria on foreclosures during crisis (2008 moratorium; extended in 2011 and 2012).
  - 2013 targeted moratorium (effective January 1, 2014) applied to primary residences with taxable value below EUR 200,000, annual net income below EUR 35,000, total household assets below EUR 270,000, and financial assets below EUR 15,000.
  - Cumulative effect of moratoria increased strategic defaults and undermined payment culture.
- Code of Civil Procedure reform — Law No. 4335/2015 (entered into force January 1, 2016):
  - Streamlined and made debt enforcement procedures more efficient by eliminating possibilities for appeals and delays.
  - Transformed civil procedure from oral to written; enabled use of e-justice.
  - Set deadlines from the beginning to improve predictability; interim measures can be automatically lifted after 60 days if main lawsuit not filed.
  - Restricted debtor defenses to two points in the process (reduced from challenges at every point).
  - Streamlined auction process for foreclosed real estate; enabled e-auctions; reserve price tied to market price and reduced if successive auctions fail.
  - Reduced appeals against court decisions and made appealed decisions enforceable.
  - New ranking of claims in insolvency enforcement proceedings: secured creditors allocated priority for 65 percent of proceeds, general priorities 25 percent, unsecured creditors 10 percent — noted as not fully in line with cross-country experience.

### Out-of-court framework (OCW / “Dendias Law”) — features
- Adopted December 2014; became effective early 2015.
- Included three mechanisms for debt restructuring/enforcement with varying court intervention:
  - First mechanism (small businesses and professionals): purely extrajudicial, voluntary, debtor-initiated and bank-led process for viable debtors meeting eligibility criteria (request filed by March 31, 2016; should not have been filed or withdrawn under Katseli Law; should not have ceased activities or been convicted of certain financial crimes).
    - Debtor must be in arrears for more than 90 days on bank debt and must be current under a payment plan with tax or social security administration.
    - Banks provided tax incentives to restructure with deep write-offs: at least 50 percent write-off of debts up to EUR 500,000; if less than 50 percent write-off, remaining debt should not exceed 75 percent of debtor’s ‘net asset position’.
    - Restructuring of private debt triggers inclusion of debtor in an installment scheme for tax and social security debt: up to 100 installments.
    - Additional write-off of 20 percent of surcharges, interest and late fees available for debtors participating in the installment scheme through this process.
  - Second mechanism (extraordinary procedure for settlement of merchants' debts): hybrid out-of-court restructuring agreement subject to court confirmation; upon court confirmation, cram down of all (including dissenting) creditors (description truncated in source excerpt).

### Key institutional and implementation issues identified
- Reforms were often piecemeal, uncoordinated, and implemented without comprehensive stakeholder consultation or impact analysis.
- Frequent and uncoordinated reforms undermined legal predictability and certainty.
- Insolvency and enforcement framework remains underutilized, fragmented, and distortive, and is not supported by an adequate institutional setting.
- Success of reforms depends on development and implementation of insolvency professionals’ regime and complementary regulatory instruments.
- Distress, if unaddressed, prevents recovery of investment, credit, and consumption, threatens financial stability, and has consequences for public finances.

*Source: cr1741 - 1. The Greek (IMF staff report, January 23, 2017).*

### 50.1 percent of the debtor’s creditors as well as secured creditors) creates an expedited, debtor-

### cr1741 - 50.1 percent of the debtor’s creditors as well as secured creditors) creates an expedited, debtor-

### Expedited debtor-initiated restructuring procedure
- A creditor majority threshold of 50.1 percent of the debtor’s creditors as well as secured creditors creates an expedited, debtor-initiated restructuring procedure.
- Procedure requirements and effects:
  - Accompanied by an evaluation of viability by its creditors and a chartered auditor's certificate that the required creditor majority has been met.
  - A provisional stay may be granted for a maximum period of six months.
  - As a prerequisite to debt restructuring by banks, any arrears to tax and social security creditors should be under an installment scheme on which the debtor must be current.
  - Once a plan is approved, creditors may not take any collective enforcement action, including the declaration of insolvency under the Corporate Insolvency Law for 12 months.
  - Financing provided for 12 months after court confirmation of the plan has priority in repayment, even if the plan fails.
  - The best interest test is used to determine whether creditors who are crammed down are entitled to compensation (but such claims do not affect the plan).
  - Labor dues are required to be settled in full but can be split into 12 installments, without interest.
  - Upon plan approval, the debtor is entitled to an additional 20 percent relief on interest, penalties and surcharges on tax and social security debt.
  - If the debtor's public debt is over EUR 1 million, upon plan approval, the debtor may apply for a write off of 40 percent of surcharges, interest and penalties and pay the balance in 100 equal installments.
  - The tax/social security authorities may decline the debtor's request but must do so within two months and based on a reasoned opinion.

### Extraordinary procedure of special administration (creditor-initiated)
- Designed to take control of the debtor's business and liquidate it through a special administrator; requires court approval.
- Key features:
  - Once confirmed by the court, the special administrator can take control of and liquidate the debtor's assets over a 12-month period.
  - Assets may be liquidated piecemeal or the business (or parts of it) may be sold as a going concern.
  - During this period, individual enforcement actions by creditors are suspended.
  - If 90 percent of the assets remain unsold after 12 months, the debtor will be liquidated; if 90 percent of the assets have been sold, the special administrator may continue to dispose of assets.
  - Distributions to creditors would be made in accordance with the provisions of the Civil Procedure Code.
  - The special administrator is only liable for intentional wrongdoing and gross negligence.

### Code of Conduct and market for non-performing loans (NPLs)
- Code of Conduct (Bank of Greece, 2013; reformed in 2016):
  - Aimed at assisting negotiated solutions to the treatment of non-performing loans.
  - Establishes an arrears-resolution procedure covering: (1) debtor communication, (2) financial information gathering, (3) financial data assessment, (4) proposing solutions, and (5) appeals review process.
- NPL market reform:
  - Market liberalized to attract foreign capital and NPL management expertise; law adopted in December 2015 and subsequently revisited.
  - Law scope: extends coverage to all loans, performing and non-performing, except for mortgage loans over primary residences under the value of EUR 140,000, which are subject to a moratorium under the law until 2018.
  - Administrative regulations have only been recently put in place; the market has not developed yet and practical implications of the sale regime have not been tested.
  - Underlying legal framework problems negatively affect prices of distressed assets, as NPLs will have to be restructured or enforced by acquiring entities.

### Current challenges in the insolvency and enforcement system — findings
- Reforms have not yielded desired results due to political and economic instability, recentness of amendments, and time needed for testing.
- Late or non-payment is pervasive; Greece tops cross-country lists in average payment term and percent of companies with late payments.
- Business insolvency regime underutilized:
  - About 96.7 percent of businesses in Greece are micro SMEs, which face the largest servicing problems.
  - Official insolvency statistics do not reflect widespread distress; bankruptcy procedures have declined relative to pre-crisis levels.
  - Example: in the first three months of 2016, the Athens district court registered only 16 bankruptcy applications.
  - Liquidation process can take up to 10 years.
  - Result: many insolvent commercial debtors remain outside the formal insolvency system.
- Personal insolvency framework over- and misused:
  - More than 200,000 applications for personal insolvency filed in six years (about 2 percent of Greece’s population).
  - Backlog has led to a paralysis of the system, with debtors receiving a payment moratorium expected to last up to 15 years.
  - System design problems and insufficient judicial guidance have promoted abuse; strategic defaulters estimated as much as 30 percent of applicants.
- Enforcement system ineffective:
  - Repeated moratoria have undermined payment culture.
  - Long and costly collateral enforcement due to mortgages not being properly registered in the land register/cadaster.
  - Lack of a land register or cadaster spanning whole territory of Greece.
  - Foreclosures rare, lengthy, and costly, with little payout to secured creditors due to priority of public creditors.
  - The commonly used pre-notation requires a payment order (PO) from the court of first instance to foreclose; this PO requires payment of a judicial fee of 1.4 percent and may take up to one year to obtain in Athens.

### Out-of-court approaches and legal obstacles
- Dendias Law (OCW law) shortcomings:
  - Did not achieve objectives; required prior use of tax installment schemes, limiting unified restructuring of financial and public claims.
  - Offered no sufficient incentives for private creditors; tax incentives were insufficient.
  - Implementing regulations were insufficiently adopted; no standard forms or engagement protocols.
  - Came into force amid high political instability, undermining incentives to use OCW.
- Other legal obstacles:
  - Secured creditors are less protected relative to public creditors (tax and social security), negatively affecting lending and recovery prospects.
  - Tax and social security authorities lack capacity and are reluctant to engage in meaningful restructuring due to concerns about criminal liability (dishonest administration).
  - Bank officials face similar liability concerns where banks have been recapitalized with public funds.
  - Obstructive shareholders can prevent effective restructuring because shareholders retain control even where equity value is zero; amendments to disenfranchise shareholders in insolvency have been introduced.

### Implementation and institutional capacity issues
- Lack of adequate implementation due to missing secondary legislation (e.g., OCW law, electronic auctions under the CCP) and enforcement of strict legal deadlines.
  - Example: new CCP in force since January 1st, 2016, but applied only as of September 2016 due to lawyers’ protest.
- Courts require training, adaptation to new procedures, and adequate infrastructure.
- Lack of coordination and expertise:
  - Government council for private debt (established 2014) met rarely and provided infrequent input.
  - Weak reform ownership and frequent government changes contributed to poor implementation.
- Weak supporting infrastructure for debt restructuring: debt counseling services not yet operational, inadequate social safety nets, incomplete supportive data infrastructure (e.g., public registers, the credit register).
- Institutional weaknesses:
  - Judicial system capacity constrained: endemic delays, lack of adequate technology and data systems, inefficient bureaucracy.
  - High appeal rate: reportedly, more than 50 percent of judicial decisions are appealed.
  - Fragmented court system, lack of central management, judges lack specialization (rotation every two years), and lack of training.
  - Insolvency profession not regulated beyond lawyers; the 2015 reforms introduced a regime for regulation of insolvency administrators that is yet to be developed by secondary legislation and put into practice.

*Source: GREECE — INTERNATIONAL MONETARY FUND (excerpt).*

### Box 1. The Greek Court System for Enforcement and Insolvency

### Box 1. The Greek Court System for Enforcement and Insolvency

### Structure and scope of courts
- Insolvency and enforcement matters are dealt with by the civil courts (dealing with all types of matters of civil and commercial issues from family matters to commercial disputes and IP disputes) that consist of three levels of courts:
  - first, the magistrate courts (formerly peace courts are 154 in the country) and courts of first instance (about 63 courts);
  - second, the civil court of appeals (about 19 Courts of Appeal courts (including 4 newly established courts));
  - third, one Cassation Court (Supreme Court of Areios Pagos).
- Enforcement and corporate insolvency matters are dealt with by the first instance courts, while cases under the Katseli law are dealt with by the magistrate courts.

### Judicial capacity and staffing (exact counts)
- There are currently about 880 judges in magistrate courts; this number has been increased by 194 (judges for household insolvency cases) in 2016.
- The number of first instance judges is 807.
- The number of court of appeals judges is 459.
- The number of cassation court judges is 61.

### Institutional and operational characteristics
- The judiciary is self-administered but not centrally managed. Judicial appointments are made independently from the Executive (except for the most senior positions).
- All organizational matters (including promotions and assignments) are decided by the Supreme Judicial Council (consisting of the Supreme Court presidents and elected common judges).
  - For instance, magistrate judges cannot be promoted to more senior positions at higher courts.
- Judges typically do not specialize on certain matters but get assigned a whole range of types of cases at the same time.
- Generally judges need to rotate every two years from their positions, which does not enable specialization and seeing a case from start to finish since the typical cases lasts more than two years.
- Courts are operated as individual units rather than a coherent judicial system leading to fragmentation and little flexibility in assigning resources.
- There is no centralized management nor adequate management at the court level.
- Data systems, if existent, are court-specific and do not span the entire court system, leading to the absence of an oversight function and the impossibility to have an effective case management.

### Key policy recommendations (paragraphs 22–25)
- The implementation of the Code of Civil Procedure should be a priority.
  - Authorities should adopt all remaining secondary legislation necessary for the full implementation of the Code of Civil Procedure.
  - Completion of the rules on the electronic registry of cases and the use of market valuation standards for collateral are needed.
  - One of the most important changes remaining is the regulation of electronic auctions.
  - A system allowing flexibility in the formulation of bids, open competition, and equal access to information would represent a significant improvement over the existing framework.
- Coordination among stakeholders is key.
  - The authorities should set up again and make full use of a coordination mechanism that includes all stakeholders and meets regularly.
  - This mechanism would need to be adequately resourced to design a comprehensive and properly sequenced plan that would then need to be implemented.
- Liquidation should be simplified and streamlined.
  - This should take into account that 99 percent of business are MSMEs.
  - The current liquidation process is too complex, costly and protracted leaving little to no pay out to creditors.
- Reinforcement of the judiciary, auxiliary staff, and infrastructure to deal with civil action is also key.
  - The procedural regime designed by the Code of Civil Procedure is largely adequate but will need to be tested in the courts.
  - The demanding deadlines set out by the Code will likely require additional efforts on the part of the judiciary and Justice administration.
  - In the medium term, authorities should consider a new judicial organization (focusing on further specialization for judges, concentration of subject matters and flexibility in assigning resources), with professional management tools and data systems that permit a continuous assessment and improvement (e.g., a full e-justice system).
- Effective implementation and regulation of the insolvency profession should be prioritized (December 2016 amendments noted as positive).
  - Some changes tackle obstructionist tactics of controlling shareholders.
  - Other aspects need improvement, such as legal protection of public officials and bank staff in charge of insolvency and debt restructuring activities.
  - Modern insolvency procedures require assignment of functions to qualified professionals with specialized knowledge.
  - The regime of insolvency professionals requires regulations covering qualifications, examinations, supervision, training, a code of conduct, liability and insurance, and a sanctioning regime.
  - Supervision of the insolvency profession requires additional administrative resources and a proper structure to guarantee the quality and effectiveness of functions performed by insolvency professionals.
  - Allowing further specialization of the judiciary in commercial law, generally, and in insolvency law, specifically, would be helpful.
  - Institutional changes will deliver benefits over the long term.
- Promote out-of-court debt restructuring to address immediate consequences of the crisis.
  - Out-of-court restructuring can deal with a high number of debtors at a much lower cost than judicial procedures, and agreements can be more beneficial for creditors and debtors.
  - To be effective, the out-of-court process should be simple, tailored to the large number of SMEs, and based on cooperation of debtors and creditors.
  - Public creditors will need to participate together with private creditors in debt restructuring solutions on an equal footing due to the special characteristics of the ranking of claims in Greece (see Box 2).
    - This implies that public creditors must be prepared to face losses, and those losses should be generally distributed in accordance with the applicable ranking of claims.
  - The system will require expertise in developing viability assessments, necessitating adequate financial and economic information about the debtor.
  - The system must be supported by a proper tax treatment of debt restructuring activities and by rules providing adequate protection for those who take debt restructuring decisions in the public administration or in financial institutions.
- Revisit the ranking of claims in Greek law to establish a solid foundation for access to credit in the future.
  - The position of secured creditors under Greek law (both in individual enforcement and in insolvency) creates comparative disadvantages for financial institutions operating in Greece, and will limit access to credit for households and enterprises.
  - A revision of the ranking of claims, hand in hand with the implementation of other reforms, will be needed in the future to avoid these negative effects.

### Box 2 highlights — Ranking of claims (selected jurisdictions and Greece specifics)
- Insolvency systems implement different approaches to the ranking of claims; common features exist (priority of secured credit, priority of workers’ claims) but many differences across countries.
- Country summaries as presented:
  - Germany: No priority for public claims; Full priority (for secured claims).
  - Spain: Priority limited to 50 percent of tax claims. Interest and penalties are subordinated; Full priority (for secured claims).
  - Italy: Unlimited Priority (in time and amount); Full priority (for secured claims).
  - France: Limited priority (taxes accrued over a certain period); Priority, only subject to potential impact of a limited 60-day wages super-priority.
  - Greece: 25 percent of proceeds in sale of secured collateral (priority of tax claims); 65 percent of proceeds in sale of collateral (priority of secured claims).
- Specifics of Greece’s ranking of claims:
  - The ranking operates within the Code of Civil Procedure, and applies separately to the proceeds of different assets, as opposed to insolvency rankings, which consider the position of creditors over the whole of the insolvency estate.
  - Regarding collateral, secured creditors are entitled to receive 65 percent of the proceeds of the sale of the encumbered asset.
  - 25 percent of the proceeds are distributed among general preferential creditors, which include:
    - the workers’ remuneration for two years before insolvency, and termination compensation;
    - lawyers’ fees for six months;
    - social security contributions until the declaration of bankruptcy for two years;
    - claims of the state arising from VAT and its surcharges.
  - After all these, all other claims of the state (including taxes and social security contributions) also have priority.
  - Unsecured creditors receive the remaining ten percent of the proceeds.
- Note: In all other European countries (as contrasted), unsecured creditors would only receive proceeds from the sale of collateral after full satisfaction of the secured claim.

*Source: Box 1. The Greek Court System for Enforcement and Insolvency.*

### 2015. Similar to tax debt, the surge in SSC debts is

### cr1741 - 2015. Similar to tax debt, the surge in SSC debts is

### Tax and SSC debt drivers
- The surge in SSC debts is largely due to a weak payment culture and the deep recession, coupled with weak collection enforcement capacity.
- The system of SSC assessment based on notional income may have worsened the problem, as contributors who earn an actual income below the notional income may not have the financial capacity to stay current on their SSC obligations.

### Key statistics on tax and SSC debt stock and collections
- About half of the stock of large tax debts—which is more than 60 percent of the total tax debt—is largely owed by debtors in bankruptcy or special liquidation and by inactive companies.
- More than 55 percent of tax debt is older than 3 years, for which the collection rate is below 2 percent.
- 40 percent of tax debt is due to penalties and fines, for which collection rates are around 1 percent.
- A large share of SSC debt could also be considered uncollectible: more than 80 percent of SSC debt is older than three years, with a collection rate of about 2 percent.
- The share of tax debt that is written-off in Greece is around 10 percent, lower than many peer countries and the Euro Area average of 15 percent.
- Assessed fines and penalties have more than tripled since 2010.
- In 2016, the amount of assessed fines and penalties exceeded the amount of assessed current taxes.
- About two thirds of 2016 penalties assessed through October are due to reassessments of penalties already in arrears.
- Stock of tax debt in installment schemes at end-September 2016 was about €5 billion, or less than 6 percent of total tax debt.
- Total number of debtors in tax installment schemes is about 1.3 million (relative to a total number of tax debtors of about 4.4 million). Note: tax debtors may participate in several schemes simultaneously, so the 1.3 million figure likely overestimates the number of individuals taking advantage of such schemes.
- Drop-out rate for the most recent scheme (legislated in March 2015) reached 13 percent at end-October 2016.
- Social security contribution schemes have drop-out rates reaching about 50 percent within a year.
- About 20 percent of tax debt is older than 10 years, for which the collection rate is 0.1 percent.
- About 30 percent of tax debt is between 5 and 10 years old, for which the collection rate is about 0.5 percent.

### Tax administration issues and practices that exacerbate debt accumulation
- Reforms attempted (overhaul of tax procedure code, redesign of installment schemes, revision of fines and surcharges, institutional reforms toward an autonomous revenue agency, creation of units for large taxpayers/high-wealth individuals/large debtors, creation of a dispute resolution unit) did not deliver expected outcomes due to:
  - Ineffective design (e.g., installment schemes not targeted; autonomy compromised by political interference).
  - Incomplete implementation (e.g., risk-based audits and prioritization of debt collection hampered by legal obligations and practices).
  - Limited capacity constraining reform implementation.
- The system of fines and penalties:
  - Although simplified by the Tax Procedure Code in 2014, the majority of fines continue to be based on the previous complex system.
  - Tax officials are obliged to impose fines whenever objective criteria are met, regardless of circumstances, contributing to debt accumulation rather than deterring evasion.
- Legal framework on uncollectible debt and write-offs:
  - Procedures for classifying debt as uncollectible are cumbersome and time consuming (require completion of multiple investigations and conditions).
  - Write-offs or cancellations are permitted only if a number of specific conditions are met, and decisions are hampered by extensive legal requirements and fear of personal liability.
  - Greece lags peers in debt write-offs (around 10 percent written off versus a Euro Area average of 15 percent).
- Collection prioritization and enforcement weaknesses:
  - Prioritization of cases has not been fully implemented due to capacity constraints, frequent management changes, an overwhelming number of prosecutor-recommended cases that must be processed with priority, and fear of personal liability.
  - The statute of limitations has been extended every year for the last five years.
  - Enforcement actions available include: (i) garnishments (third-party payments such as e-garnishment), (ii) seizures (freezing bank accounts), (iii) auctions (sale of property proceeds), and (iv) mortgages in favor of the tax administration. Progress in initiating and completing enforcement actions has been uneven; only about a half of tax debtors are under enforcement action.
  - Use of garnishments expanded in the last two years, while other seizure orders have plummeted.
  - Auctioning process for seized real estate is inefficient due to an excessively high required minimum bidding price, depriving the administration of an important tool.
  - Capacity to initiate bankruptcy and liquidation proceedings is very limited; legal framework weakens ability to initiate prosecution for tax evasion (e.g., settlement of tax debt and administrative fines precludes prosecution).
- Installment schemes and amnesties:
  - More than 50 tax and SSC installment schemes have been legislated since 2001; schemes have become more generous (longer installments, lower interest rates, fewer eligibility requirements), raising taxpayer expectations and undermining payment culture.
  - Installment schemes have high drop-out rates and are perceived by taxpayers as de facto amnesty schemes or avenues to obtain tax clearance certificates.
  - Authorities have occasionally relied on tax amnesties (e.g., 2010-11) and more recently legislated a Voluntary Disclosure Initiative with reduced fines and interest and generous eligibility, which may be perceived as amnesty and can jeopardize compliance in the absence of effective enforcement.

### Policy recommendations
- Urgent need for durable solutions to prevent new tax and SSC debt accumulation and reduce existing stock; large debt overhang drags on economic activity, impedes taxpayers’ capacity to pay current obligations, and strains tax administration capacity.
- First: measure the full scale of the problem by assessing tax debtors’ financial situation.
  - Develop a common methodology to classify debtors according to financial viability, using information on public and private debts, assets, projected cash flow, compliance record, and reasons for arrears.
  - Use objective criteria and focus on balance sheets and cash flow projections (e.g., income to debt ratios, EBITDA) to distinguish solvency versus liquidity problems.
  - A formal framework could help protect officials from fear of personal liability when categorizing debts as uncollectable or eligible for write-off.
- Second: use all available tools to restructure existing tax debts in a targeted manner to preserve taxpayers’ viability; avoid across-the-board installment schemes.
  - Enforcement actions: intensify enforcement for strategic defaulters and unviable debtors. Identify taxpayers able to pay but failing to do so and apply enforcement measures (wage, income or asset seizure including e-garnishment; liens; mortgages in favor of tax administration; auctions). Subject non-viable enterprises to fast-track liquidation procedures. Strengthen tax administration capacity to initiate bankruptcy and liquidation (increase staff with legal expertise; provide decision-making authority and incentives such as measurable targets).
  - Debt restructuring: make restructuring available for viable and potentially viable debtors based on capacity to pay, while minimizing moral hazard. Complete efforts to develop and implement a voluntary out-of-court debt restructuring framework that applies to both bank debt and public claims so public claims are addressed together with bank and other debts to restore viability. Even where debtors have only public claims, seek debt restructuring under the out-of-court framework to ensure equal treatment and optimize collection from tax and SSC debts. This will likely entail selective write-offs of public claims (particularly fines and penalties which are largely uncollectible). Put in place safeguards to prevent moral hazard: information requirements on financial situation, clear eligibility criteria, and strict consequences for breaching restructuring agreements.
- Third: align tax administration practices with modern approaches used in advanced economies.
  - Modernize the legal framework for determining (un-)collectability and cancellation of tax and SSC debt based on peer good practices. Delegate decision-making on debt collectability and cancellation by debt size to lower level managers while balancing operational efficiency and safeguards against mismanagement. Implement ex-post audits by internal or external public entities (e.g., internal audit department of the Ministry of Finance, external Court of Audits) to monitor implementation of debt restructuring and cancellations. Provide legal protection for officials who follow established guidelines to categorize debts as uncollectable or eligible for write-off.
  - Modernize collection and audit practices to improve collection prospects and reduce administrative burden. Apply the new legal framework on fines (Tax Procedure Code) to pre-2014 cases and review the legal framework for charging excessive fines on already indebted inactive companies so fines act as a deterrent rather than contributing to debt accumulation. Fully implement risk-based audits and debt collection prioritization by focusing on new and large rather than old and small tax debts. Revise legal framework to ease burden of prosecutor-recommended cases (e.g., allow prosecutors to send some non-priority or low-collection cases to the tax administration as information only and without a binding audit requirement).

*International Monetary Fund, GREECE (selected chapter).*

### References

### References

### Cited Works
- Artavanis, N., Morse, A., Tsoutsoura M., 2016, “Measuring Income Tax Evasion Using Bank Credit: Evidence from Greece”, The Quarterly Journal of Economics (2016) 131 (2): 739-798.
- Brondolo, J., 2009, “Collecting Taxes During an Economic Crisis: Challenges and Policy Options” IMF Staff Position Note, International Monetary Fund, Washington D.C.
- European Commission, 2016, Study and Reports on the VAT Gap in the EU-28 Member States: 2016 Final Report. European Commission, Brussels.
- IOTA, 2013, “Treatment of Revenue Losses: Write-offs, Remissions, and Debt Reliefs,” Meeting of IOTA Area Group on Debt Management, Intra-European Organisation of Tax Administrations.
- OECD, 2015, Tax Administration 2015: Comparative Information on OECD and Other Advanced and Emerging Economies, OECD Publishing, Paris.
- Sancak, C., Vellosso, R., and Xing, J., 2010, “Tax Revenue Response to the Business Cycle,” Working Paper 10/71, International Monetary Fund, Washington D.C.

### Summary — Reforming the Greek Pension System (excerpt)
- Context and overall assessment
  - The Greek pension system was characterized as costly, complex, and unfair, contributing to Greece’s fiscal problems and discouraging labor force participation.
  - The most recent reform introduced in 2015-16 moves in the right direction by removing some distortions and reducing costs, but “falls short of making the system affordable and creating strong incentives to work and contribute,” and is subject to large implementation risks.
  - Recommendation: Authorities should fully implement the recent reform and complement it with additional reforms to address remaining deficiencies.

- Background: early reforms and outcomes
  - During 2000-10, pension spending increased from close to 11 percent of GDP to almost 15 percent of GDP (the second highest in the euro area, after Italy).
  - The system’s deficit reached an estimated 7.3 percent of GDP by 2010; overall general government deficit was close to 11 percent.
  - OECD described the pension system as “a fiscal time bomb,” with pension spending expected to double by 2050 driven by rapid population aging and a doubling of the old-age dependency rate (OECD, 2007; EC 2009).
  - The 2010 reform:
    - Set early and statutory retirement age at 60/65 for all insured and increased required years of contribution from 35 to 40.
    - Introduced a penalty for early retirement and streamlined hazardous professions list.
    - Overhauled benefit formula: introduced a basic pension component of €360 per month plus an earnings-related pension with accrual rates ranging from 0.8 to 1.5 percent of earnings (compared to 2-3 percent before the reform).
    - Linked pensionable earnings to lifetime earnings rather than best five of last ten years, but introduction of the non-contributory basic pension flattened the benefit schedule and weakened contribution-benefit links.
    - The unified benefit rule was never applied; extensive grandfathering of previous early retirement options led to a massive wave of early retirements.

  - Reforms in 2011-12:
    - Introduced a zero-balance rule for auxiliary pension funds, increased early and statutory retirement ages by two years (to 62 and 67), and froze indexation of pensions until 2016.
    - Reduced benefits of current retirees, including eliminating the 13th and 14th pension payments and introducing progressive cuts expected to yield 2¼ percent of GDP in gross fiscal savings.
    - Setbacks: zero-balance rule not implemented; increase in retirement age undermined by grandfathering; cuts were ruled unconstitutional by the Council of State (CoS) in 2015.

- Evolution of pension spending 2010-15
  - Pension spending increased from 14.8 to 17.7 percent of GDP during 2010-2015.
  - The average pension (ratio of nominal pension spending to number of retirees) declined by about 8 percent during this period, but GDP declined by around 25 percent, leading to an increase in pension spending relative to output.
  - Accounting for cyclical effects (dividing 2015 pension spending by potential output), the increase since 2010 is smaller, at 1.1 percent of GDP.
  - Despite some cyclical component, Greece’s pension spending remained among the highest in the euro-zone (second only to Italy).
  - Pension spending rose while investment and discretionary spending were compressed relative to GDP to help reduce the fiscal deficit.

- Contributions, revenues, and state transfers
  - Contribution rates for employers and employees, including main and supplementary pensions, stood at 26 percent at end-2015, above the euro-area average of 25 percent.
  - Pension contribution revenues were relatively low: 6½ percent of GDP in 2015 compared to a euro area average of about 8 percent.
  - Contributing factors: high rates on narrow bases, low payment and collection efficiency, declining workforce (by 22 percent since 2009), high unemployment rate (25 percent at end-2015), and large wage reductions (more than 20 percent during 2010-15).
  - Tax wedge context: average tax wedge in Greece in 2015 for a one-earner married couple with two children and average earnings was 38 percent (compared to 26.7 percent in OECD and 31.4 percent in the euro area). A single person receiving 67 percent above average earnings faced a 55 percent marginal tax wedge (compared to 47 percent in OECD and 53 percent in the euro area).
  - Informality and collection challenges:
    - Greece has one of the highest shares of informal economy, incidence of tax evasion, and hours per week spent on undeclared work in the OECD.
    - Artemis reports (2014): about 9 percent of audited employees and 18 percent of audited companies were not formally declared and thus were not insured in late 2014.
    - Collection rates: about 30-50 percent in the farmers’ fund, 55 percent in the fund for self-employed, and about 80 percent in the fund for doctors, lawyers and engineers. Arrears among the self-employed are 4.5 times the annual revenue collected.
  - State transfers to the pension system rose from 7.3 percent of GDP (excluding lump-sum funds) in 2010 to almost 11 percent of GDP by end-2015.
  - All main funds experienced large deficits; contributions often cover less than half of benefit spending in many funds. The state has been mandated to cover these deficits and subsidize the farmers’ fund (OGA), where insured pay only the employees’ contribution of 7 percent (less than 10 percent of benefits).

- System structure and fragmentation prior to 2015-16 reforms
  - By end-2014, the mandatory main pension system was differentiated into seven occupational funds; the unified benefit rule from 2010 was never applied, so funds retained their own rules.
  - Supplementary or auxiliary pension funds were merged under a single umbrella fund after the 2012 reform but retained different degrees of autonomy and benefit formulas.
  - Several lump-sum and dividend funds provided additional benefits mostly for civil servants and some professional groups.
  - Pension receipt distribution: close to half of pensioners received one pension, 35 percent received two, and 15 percent received three or more pensions.
  - Multiple benefit layers existed (basic, contributory, minimum pensions), topped up by auxiliary, lump-sum, dividend and/or targeted pensions (e.g., the EKAS benefit).
  - The introduction of basic pensions, various minimum and targeted pensions, and past progressive cuts had flattened the pension system and weakened contribution-benefit links.

*Italic: International Monetary Fund — Excerpt from “REFORMING THE GREEK PENSION SYSTEM” (References and accompanying text).*

### Box 1. The Greek Pension System Prior to 2015-16 Reforms

### Box 1. The Greek Pension System Prior to 2015-16 Reforms

### System structure and financing (prior to 2016 reform)
- Fragmented across occupations, types of pensions, and benefit rules; provided main, auxiliary, lump-sum, dividend, targeted, and social pensions plus other contributory welfare benefits financed through a pay-as-you-go principle.
- Financed by state transfers and, in some cases, third-party charges benefitting special groups (e.g. journalists).
- Main pension providers comprised eight funds: IKA (salaried workers, including also Banks, TAP-DEH that is Public electricity company, and others), PS (civil servants), OAEE (self-employed), OGA (agricultural sector), ETAA (lawyers, doctors, and engineers), ETAP-MME (journalists), NAT (seamen), and a fund for Bank of Greece employees.
- Auxiliary (supplementary) pension funds: merged into a single entity (ETEA) in 2012 and transformed into a Notional Defined Contribution (NDC) system in 2014, pro-rated over defined benefit (DB) rules for pre-2014 contribution periods. The NDC included a sustainability factor that under a full pay-as-you-go principle required maintaining a zero deficit every year; however, the zero-deficit rule was not implemented.

### Benefit components (as described)
- Basic pension: introduced with the 2010 law as part of the main pension formula at a fixed level of €360 per month available to all who were eligible to a pension.
- Contributory pension: earnings-related component of main pensions calculated through a defined benefit (DB) formula. Accrual rates varied widely across funds:
  - prior to the 2010 reforms: between 2 and 3 percent.
  - after the reform: between 0.8 and 1.5 percent, depending on years of insurance.
- Guaranteed contributory pension (minimum pension): floor applied to main (sum of basic and contributory) pensions. In IKA this floor was €487-€600 depending on family size. Supplementary pensions, lump-sum pensions and a solidarity grant were provided in addition.
- Auxiliary/supplementary pensions: followed separate DB rules often with separate minimum pension limits and eligibility linked to the main pension.
- Lump-sum and dividend pensions: additional layers mostly to civil servants and selected professionals/self-employed.
- EKAS pension: means-tested solidarity grant for those who already qualified for an insurance pension up to a ceiling of €850 per month and pension income of €767 per month, in monthly payments ranging from €30 to €230. The guaranteed contributory pension topped up with EKAS thus exceeded the minimum wage of €684.
- Social pension: means-tested welfare benefit of €360 per month for elderly at 67 years who had not fulfilled eligibility conditions for social insurance pension.
- Other benefits: summer camps, temporary accommodations to seamen, etc.

### Generosity and international comparisons
- Nominal pensions remained relatively generous by international standards despite lower productivity.
- Average old-age pension at end-2015 (ratio of total monthly pension spending to total number of retirees) was estimated at €97810, similar to the euro-area average once adjusted for PPP.
- Comparisons with Germany (selected figures shown as monthly amounts in Euros):
  - Standard Pension ("Eckpension") in 2014: Germany 1,287; Greece 1,152.
  - Average pension (comparable data) in 2014: Germany 1,224; Greece 954.
  - Average pension (comparable in PPS terms) in 2014: Germany 1,208; Greece 1,168.
  - GDP per capita (2015): Germany 3,092; Greece 1,350.
  - Average wage (2015): Germany 3,134; Greece 1,470.
  - Ratio of standard pension to average wage: Germany 41%; Greece 78%.
  - Ratio of average pension to average wage: Germany 39%; Greece 65%.
  - Effective retirement age (new old age pension): Germany 64; Greece 59.
  - Average contributory period (new pensions, 2010): Germany 36.3; Greece 29.3.
- Gross replacement rate (average pension of new retirees to average wage at retirement) about 81 percent at end-2013 — highest in the euro-area and almost 30 percentage points higher than the euro-area average.
- Economic benefit rate (pension spending per individual aged 65+ relative to GDP per working aged population) was 54 percent for Greece compared to a euro area average of 43 percent.
- Despite reductions from reforms, pensions were granted at younger ages and based on shorter contribution periods; Greek workers retired on average 5 years earlier and made lifetime contributions that were only ⅓ of their lifetime benefits—less than half of contributions made by German workers.

### Distributional outcomes and poverty indicators
- Poverty rate for retirees declined by 8 percentage points since 2010 to 10.8 percent at end-2015 (euro area average 12.1 percent; Germany 17 percent).
- High home ownership of elderly (84 percent in Greece vs 53 percent in Germany) would further reduce measured poverty of pensioners.
- Poverty rate for working-age population increased to 23. percent at end-2015 (euro-area average 18.2 percent).
- Greece had among the highest minimum pensions in the euro area:
  - Minimum pension amounted to €5844-€8400 annually, exceeding the standard poverty threshold of €4,512 (EU-SILC, 2015).
  - EKAS eligibility threshold for means-tested top-up was income below €9,200 per annum (almost twice the poverty threshold and above the minimum wage €7,963).
- Coverage: Greece stood out as the country with the highest ratio of the elderly receiving minimum pensions.

### Labor market incentives, contribution links, and self-employed issues
- Despite statutory increases in retirement ages (early and standard to 62 and 67), average retirement age of old-age retirees fell to 59 years.
- Distribution of retirement applications at end-2015 skewed toward few years of formal work: spike at 15 years (14 percent of total applications); about half of applications by 26 years of contributions; only about ¼ after 35 years of contributions.
- Self-employed contributions applied on assessed (notional) earnings instead of actual earnings even after 2010-12 reforms:
  - Main fund for self-employed (OAEE) has 14 notional income classes; ¼ of insured qualify for lowest notional income class (€763 per month) and ⅔ for the four lower income classes (up to €1,213 per month).
  - Minimum notional income scales in other funds for self-employed range from €487 to €693 per month.
- Low revenue productivity of self-employed: share of social contributions paid by self-employed (16 percent) is less than half of their share in employment (35 percent), resulting in one of the lowest “revenue productivities” of self-employed in the euro zone.
- Contribution arrears of self-employed (OAEE, ETAA, and OGA) reached 5.3 percent of GDP in 2015.

### The 2015-16 reforms — objectives and main changes
- Reform objectives included: (i) tightening early retirement rules; (ii) harmonizing main pension benefit rules, including addressing the CoS ruling; (iii) phasing out EKAS; (iv) putting auxiliary, dividend, and lump-sum funds on more sustainable footing; (v) harmonizing contribution rules; and (vi) consolidating main pension funds. Targeted fiscal savings of about 1½ percent of GDP by 2018.
- Early retirement overhaul:
  - Gradual convergence by 2022 of grandfathered retirement ages toward 67 years (or 62 years with 40 years of contributions).
  - Increased benefit discount for early retirement from 6 to 16 percent for those affected by the reform.
  - Grandfathering protections remained for those who by 2015 had reached required retirement age and years of insurance; large exemptions (up to ¾) for civil servants with short service remained.
- Harmonized main pension benefit rule:
  - Single uniform benefit rule with a basic and contributory component.
  - Basic pension increased from €360 to €384 per month at 20 years of insurance (corresponding to the 2014 poverty level).
  - New contributory marginal accrual rates in range 0.77 to 2 percent, depending on years of insurance.
  - For new retirees the new rule applies without pro-rating. For existing retirees, main pensions frozen at end-2014 level (pre-dating the 2015 CoS ruling); about 1.4 million current pensioners fall into this category.
- Basic, minimum guaranteed, and targeted pensions:
  - Minimum guaranteed pension eliminated for all retirees except those with work-related disabilities.
  - EKAS legislated to be phased out by end-2019; fragmented compensations and a 2017 “bonus” to retirees with pension benefit below €850 per month neutralized effect of EKAS phase-out in 2016-17.
- Supplementary pensions and deficits:
  - Selective cuts of supplementary pensions for pensioners with total benefits above €1,300 per month (affecting about 200,000 current retirees) and freeze of supplementary pensions while funds remain in deficit.
  - Supplementary funds’ deficit about 0.4 percent of GDP at end-2015.
  - Temporary increase in supplementary social security contribution rates by 1 percentage point until May 2019 (to be phased out thereafter); pledged use of supplementary fund assets to cover remaining deficits.
  - Note: under NDC regime, higher contribution rates feed into notional capital that determines pension benefits.
- Contributions and self-employed:
  - Main pension contributions harmonized at 20 percent for all employees (implying an increase for farmers of 13 percentage points).
  - Health contribution rates for retirees increased to 6 percent (from 4 percent in main funds and 0 percent in supplementary funds).
  - Transformed social security contribution base for self-employed from notional to actual earnings from self-employment, subject to a minimum income limit.
  - Eliminated third-party charges used to finance deficits of pension funds for the self-employed.
  - Exemptions and preferential arrangements remained for vested interest groups (lawyers, doctors, engineers, etc.): reduced rates, 30 percent discount on minimum earnings limit, and staged payment options; seamen retained older rules.
  - Self-employed still pay contributions on a lower base (net of social contributions of the previous year) compared to salaried workers; pension benefits accrue even if contribution obligations not current, with arrears to be withheld from pensions at retirement.

### Assessment: remaining problems, fiscal and fairness implications, and risks
- Medium-run fiscal implications:
  - Despite aiming for savings of 1½ percent of GDP by 2018, the reform still leaves a significant pension system deficit of 9 percent of GDP over the medium term after the output gap closes — far above the euro-area average.
  - Continued consumption of general budget resources constrains reallocation to other priorities.
- Incentives to contribute and labor supply:
  - New higher basic pension increased benefit rate by more than 1½ percentage points (3½ percentage points for a minimum wage earner) compared to pre-reform regime.
  - Accrual rates for contributory pensions were reduced, leading to decline in long-run replacement rates.
  - Reform estimated to lead to gradual reduction in replacement rates by about 4.4 percentage points compared to the pre-reform scenario (assuming full implementation of 2010-12 reforms).
  - Combined basic and contributory benefit at 15 years of insurance still provides a generous minimum pension guarantee (estimated at around 115 percent of the poverty threshold, compared to euro-area average around 70 percent).
  - Weaker contribution-benefit links risk undermining labor force participation and encourage short careers.
- Fairness and distributional outcomes:
  - Fiscal adjustment largely borne by new generations of retirees with longer careers; individuals with shorter careers (e.g. around 20 years) can see future replacement rates and average pensions even increasing.
  - Main pensions of current retirees protected via the freeze, exacerbating inter-generational imbalances.
  - Specific interest groups continue to benefit from exemptions and special treatment relative to salaried workers.
- Implementation and legal risks:
  - Reform ownership fragile; rollbacks and compensatory measures (e.g., Christmas bonuses, narrowing of contribution base for self-employed, high minimum pension for work-related disabilities) have weakened original aims.
  - Full implementation requires extensive legislative and administrative steps: implementing legislation, abolishing old conflicting laws, processing long outstanding unpaid pensions, creating electronic registries, completing merger of main funds, recalibrating pensions of existing retirees.
  - Legal risks remain high because reform preserves structure of 2012 cuts (previously ruled unconstitutional) and adds progressive cuts on some groups of retirees.

### Conclusions and policy recommendations
- Conclusions:
  - Greek pension system has been complex, costly, and earlier reforms faltered. Generous benefits, nontransparent contribution rules, favorable treatment of special groups, and early retirement options resulted in an unaffordable system.
  - After two major reform attempts, pension spending at end-2015 remained the highest in the euro-area and required state transfers several times larger than the euro-area average. Structural design (overly generous benefits, narrow contribution base) is the key driver.
  - The 2015-2016 reform has desirable features (institutional consolidation, harmonization), but the system remains costly in the medium run, with weak contribution-benefit links, unfair treatment across cohorts and groups, and high implementation/legal risks.
- Policy recommendations (priority actions):
  - Implement the reform fully and in a timely manner, without additional rollbacks.
  - Medium-term additional reforms to reduce the deficit and improve incentives to work and contribute, including:
    - Recalibration of pensions: applying the recalibration of benefits based on the new rule also to existing retirees could deliver savings of 1 percent of GDP in the medium run; savings could be used to strengthen social safety nets or reduce very high contribution rates (or other excessive tax rates). This would imply larger cuts for high-income retirees with short contribution histories while slightly increasing benefits for lower-end pensioners with higher years of contributions, improving inter- and intra-generational fairness and work incentives.
    - Strengthening contribution-benefit links: review level of basic pension in light of international trends to strengthen contributory pension actuarially; lower the tax wedge as fiscal space allows to strengthen work and contribution incentives; fully harmonize contribution rules for the self-employed by removing remaining distortive exemptions.

*Italic: Source — IMF staff summary of "Box 1. The Greek Pension System Prior to 2015-16 Reforms."*

### References

### References

### Informal economy, tax evasion, and labor market informality
- Andrews, D., Sanchez, A.C. and A. Johansson (2011), “Towards a Better Understanding of the Informal Economy,” OECD Economics Department Working Papers No. 873.
- Artavanis, N.T., Morse, A. and M. Tsoutsoura (2015), “Measuring Income Tax Evasion using Bank Credit: Evidence from Greece”, Chicago Booth Research Paper No. 12-25; Fama-Miller Working Paper.
- OECD (2004), “Informal Employment and Promoting the Transition to a Salaried Economy,” in OECD Employment Outlook.
- Joubert, C. (2015), “Pension design with a large informal labor market: evidence from Chile,” International Economic Review, Vol. 56, No. 2, pp. 673-694.

### Pension design, retirement incentives, and minimum pensions
- Disney R., Boeri T. and T. Jappelli (2004), “Are Contributions to Public Pension Programmes a Tax on Employment?” Economic Policy, Vol. 19, No. 39, pp. 267-311.
- Duval, R. (2003), “The retirement effects of old-age pension and early retirement schemes in OECD countries,” OECD Economics Department Working Papers, No. 370, OECD Publishing.
- Gruber, J. and D.A. Wise (2004), “Social Security Programs and Retirement around the World: Micro-Estimation”, NBER, The University of Chicago Press.
- Jiménez-Martín, S. (2014), “The incentive effects of minimum pensions,” IZA World of Labor, Working Paper 2014:84.
- Jiménez-Martín, S. and A.R. Sánchez Martín (2007), “An Evaluation of the Life Cycle Effects of Minimum Pensions on Retirement Behavior,” Journal of Applied Econometrics, Vol. 22, pp. 923-950.
- Queisser, M. and E. Whitehouse (2006), “Neutral or Fair? Actuarial Concepts and Pension-System Design”, OECD Social, Employment and Migration Working Papers, No. 40, OECD Publishing.

### European Commission ageing and pension adequacy reports
- EC (2009), “2009 Ageing Report: Economic and budgetary projections for the EU-27 Member States (2008-2060)”, European Economy 2|2009.
- EC (2012), “The 2012 Ageing Report: Economic and budgetary projections for the EU27 Member States (2010-2060)”, European Economy 2|2012.
- EC (2015), “The 2015 Ageing Report: Economic and budgetary projections for the EU27 Member States (2013-2060)”.
- EC-SPC (2015a), “The 2015 Pension Adequacy Report: current and future income adequacy in old age in the EU”, Vol. I.
- EC-SPC (2015b), “The 2015 Pension Adequacy Report: current and future income adequacy in old age in the EU. Country Profiles”, Vol. II.

### OECD and country surveys on pensions and reforms
- OECD (2007), “Pensions: A comprehensive reform is urgently required”, in OECD Economic Surveys: Greece 2007, OECD Publishing. http://dx.doi.org/10.1787/eco_surveys-grc-2007-5-en
- OECD (2011), Pensions at a Glance 2011: Retirement-income Systems in OECD and G20 Countries, OECD Publishing. http://dx.doi.org/10.1787/pension_glance-2011-en
- OECD (2013), “Pensions at a Glance 2013: OECD and G20 Indicators”, OECD Publishing. http://dx.doi.org/10.1787/pension_glance-2013-en

### IMF policy papers and fiscal/employment interactions
- IMF (2011), “The Challenge of Public Pension Reform in Advanced and Emerging Economies”, IMF Policy Papers.
- IMF (2012), “Fiscal Policy and Employment in Advanced and Emerging Economies”, IMF Policy Papers.

### Country-specific reports and administrative sources
- IDIKA (2015), “Monthly Representation of Pension and Welfare Benefits”, Helios Report, October 2015IMF.
- Bundesversicherungsamt (2014), “Bericht der Bundesversicherungsanstalt fuer Angestellte.”
- World Bank (2013a), “Review of Key Design Parameters and Legislation for Social Assistance Programs in Latvia,” in Scientific Research: Latvia: “Who Is Unemployed, Inactive or Needy? Assessing Post Crisis Policy Options.”
- World Bank (2013b), “Analysis of the Incentive Structure Created by the Tax and Benefit System,” in Scientific Research: Latvia: “Who Is Unemployed, Inactive or Needy? Assessing Post Crisis Policy Options.”

*References list as provided in the source content.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2017/cr1741.pdf_