The new Local Government Local Government, which aims to serve as the new institutional framework for the operation of municipalities and regions, was presented by the Minister of the Interior, Theodoros Livanios, on the occasion of the submission to Parliament of the bill containing 774 articles.

At the heart of the reform is the new method for electing mayors and regional governors, with the abolition of the second round, while introduces the preferential voting system for the first time in Greece. Citizens will have the opportunity to indicate a second choice among the candidates, with the aim of ensuring broader democratic legitimacy for elected authorities, without the need for a repeat election.

Under the new model, if no coalition secures 42% of the vote in the first count, the second-choice votes of voters from the remaining parties will be counted toward the votes of the top two coalitions.

Permanent hiring at daycare centers

Particular emphasis was placed on measures for municipal daycare centers and nurseries, which in fact constituted one of the most significant additions incorporated following the public consultation.

For the first time, a comprehensive and permanent framework for staffing these facilities is being established. An electronic roster is being created through ASEP, which will serve as a “pool” to fill both permanent positions and emergency needs. All required permanent positions are to be established based on the standard operating regulations and the staff-to-child ratio.

The Ministry estimates that with the new system more than 9,000 permanent positions will be filled in the near future. At the same time, municipalities are being granted the authority to provide a birth allowance of up to 3,000 euros per child, subject to a decision by the municipal council.

Significant changes are also being introduced in the area of financial management of local government organizations. The standard procedure for settling debts owed to municipalities is being extended from the current maximum of 24 installments to up to 48 installments. At the same time, local authorities are being integrated into the Single Digital Payment Portal, through which citizens will be able to view all their obligations in one place and pay them electronically.

The new Local Development Fee and the debate over the “municipal ENFIA”

A separate section of the presentation focused on changes to municipal taxation, with the Minister rejecting the characterization of a “municipal ENFIA”.

The new Code abolishes the Tax on Electrified Premises (FIX) and the Real Estate Tax (RET), which are replaced by the new Local Development Fee (TTA), which is linked to the actual value of the property, based on its zone price and age.

Mr. Livaniou presented specific examples, arguing that for the vast majority of owners, tax relief applies:

  • A 120-square-meter apartment in Ano Patisia, built 30 years ago, which currently costs 71.1 euros per year, will pay 45 euros at a rate of 0.5‰, i.e., 26.1 euros less.
  • A 100-square-meter apartment in a municipality of Thessaloniki, built a decade ago, currently costs 82 euros per year; the fee is reduced to 56.25 euros.
  • 170-square-meter residence in a municipality in the Peloponnese, 30 years old, from 136.34 euros is capped at 63.75 euros, with a benefit of over 72 euros per year.

In contrast, increases are seen for high-value properties. A typical example is a newly built 160-square-meter apartment in Kolonaki, where the annual tax burden increases from 265.6 euros to 304 euros.

According to the Minister, the new system makes taxation fairer, as it replaces a flat tax that was imposed regardless of the property’s actual value.

The Regional Development Levy provided for in the original text was ultimately withdrawn due to the reactions recorded during the public consultation.

New regime for DEYAs

Extensive changes are also planned for the Municipal Water Supply and Sewerage Companies (DEYA), as for the first time their entire legislative framework is incorporated into the Local Government Code.

DEYAs are required to operate with financial sufficiency and balanced budgets, while gain the ability to obtain bank loans, both from the Deposits and Loans Fund and from commercial banks, for the implementation of projects.

At the same time, financial support of over 230 million euros is provided to cover overdue debts to electricity suppliers (estimated at around 500 million euros), as well as the option to settle the remaining debts through long-term borrowing. According to the Ministry, this restructuring will allow DEYAs to renegotiate electricity rates and reduce their operating costs.

The Minister described the Code as a comprehensive codification of local government legislation, which brings together for the first time in a single text hundreds of scattered provisions enacted over the past decades.

The central focus of the new framework is to strengthen the accountability of elected authorities. The Code introduces mechanisms for publicity and transparency, requiring the mandatory publication of critical information regarding the operation of municipalities and regions.

Local government websites will publish information such as budget execution progress, as well as all fees, rates, and exemptions applicable to citizens. At the same time, a system of evaluation indicators for local authorities is being created, to provide a comparable picture of the performance of municipal and regional services.

The new framework also provides for the evaluation of public and municipal services by citizens themselves, while performance awards are established for municipalities that achieve the best performance in specific areas.

One of the most important undertakings of the new Code concerns the complete recording and classification of the responsibilities of municipalities and Regions, which until now were scattered across a large number of legislative acts.

These responsibilities are now consolidated into a single table, while a a permanent mechanism for the transfer of responsibilities between the central government and local government.

Particular importance is attached to strengthening the regulatory function of municipalities, as they are given the ability to issue local regulatory acts, following electronic consultation with citizens.

New mechanism for reviewing the legality of acts

The Code also introduces significant changes to the review of the legality of local government acts, attempting to address problems of delays, inconsistency, and lack of objectivity currently observed.

The full activation of the Independent Supervisory Services is envisaged, with heads to be selected through ASEP procedures. The position of General Legality Supervisor is also being created, who will coordinate all audits and ensure the uniform application of legislation throughout the country.

The transactions to be audited will be entered into a new information system and assigned to the relevant agencies using a random algorithm to ensure the impartiality of the process. At the same time, strict time limits are set for the completion of the audits.

The General Legality Supervisor will also be able to request ex officio audits in cases of serious public interest or obvious violation of the law, while a special office for receiving complaints from citizens is being established.

The Code also reforms the framework for disciplinary oversight of mayors, regional governors, and other elected officials.

Oversight will now be conducted by a single central Disciplinary Council, composed primarily of senior judicial officials. At the same time, the cases that constitute disciplinary offenses and may lead to the initiation of relevant proceedings are clarified.

Furthermore, the exemption from summary proceedings that already applies to mayors and regional governors is extended to deputy mayors and deputy regional governors, while criminal cases involving heads of local government bodies will be tried with absolute priority.

The new Code provides local authorities with greater flexibility regarding how they exercise their powers. Municipalities will be able to establish joint services with neighboring municipalities or regions, enter into inter-municipal and inter-level partnerships, utilize programmatic agreements, and collaborate with civil society organizations to support social structures.

According to the Ministry, the new Code retains a strong social character. Reductions or exemptions from municipal fees are provided for vulnerable social groups, such as large families, families with three children, single-parent families, people with disabilities, and the long-term unemployed.

The tool of social compensation is also introduced through the utilization of municipal property for social purposes, while the possibility is provided to grant real estate to financially disadvantaged citizens for the construction of housing or to organizations that carry out public benefit work.

The bill will be submitted for review to the relevant parliamentary committee next Monday, while it will be debated in the plenary session on Monday, June 22, and Tuesday, June 23, at which time it will be voted on.