Greece achieves medium overall compliance with international standards and codes, with a score of 58.3 out of 100 in our Standards Compliance Index. Greece's compliance in the area of macroeconomic fundamentals is high, with the exception of fiscal transparency, where despite progress in meeting the requirements of the fiscal transparency code, laws are loosely administered and the fiscal management framework needs to be strengthened. As a European Union member Greek practices in accounting are not in line with international standards. Initiatives were undertaken in 2004-2006 to substantially improve insurance supervision, auditing and the insolvency framework. Money laundering laws are in compliance with European Union Directives but lack efficient implementation. Banking supervision and securities regulation are largely in line with international practices.

Macroeconomic Policy and Data Transparency

The International Monetary Fund (IMF) in its 2006 Article IV Consultation report noted that Greece continues to observe the Special Data Dissemination Standard (SDDS) specifications for coverage, periodicity, and timeliness of data, and has made progress in implementing recommendations in the Report on the Observance of Standards and Codes (ROSC), which was last updated in 2004. Greece subscribed to the Special Data Dissemination Standard (SDDS) on November 8, 2002. Despite progress, the IMF recommends further improvements. The quality and coverage of general government public finances and cross-sector data consistency should be improved, and financial accounts of the government should be prepared. More »

Monetary policy in the Euro Area is determined by the Governing Council of the European Central Bank (ECB). Therefore, the national central banks are no longer directly responsible for monetary policy issues. According to the 2001 IMF Report on the Observance of Standards and Codes (ROSC) for the Euro Area, overall, the Euro-system maintains a high level of transparency, demonstrating a strong institutional commitment to openness and a high degree of observance of the Code. The ECB has taken a very active approach to communicating with the public. Some gaps remain in the transparency framework of the ECB / Euro-system, partly due to the disclosure practices of individual national central banks. More »

According to the 2006 International Monetary Fund Report on the Observance of Standards and Codes - Fiscal Transparency Module, in recent years Greece has made progress in meeting the requirements of the fiscal transparency code. This has been most marked in the area of public availability of information, with increased publications and use of the internet. At the central government level Greek budget processes give assurances of integrity about fiscal data through independent audit and recently strengthened statistical reporting, although much still needs to be done on improving accounting and audit systems and extending coverage to the rest of general government. In other areas of the transparency code greater challenges remain arising from two main sources. First, the basic organic budget law prescribes a traditional detailed control-oriented budget management system providing little insight into government policies, activities or performance. Secondly, Greece has not modernized its fiscal institutions and systems. As a result major reforms are still necessary in improving clarity of roles and responsibilities and advancing more open budget preparation, execution, and reporting. More »

Institutional and market infrastructure

The Principles and Guidelines for Effective Insolvency and Creditor Rights Systems were developed by the World Bank to promote international consensus on a uniform framework to assess the effectiveness of insolvency and creditor rights systems. According to a report prepared for the European Commission in 2003, as of 2002, in Greece 10 of the principles have been fully adopted, 12 have been almost fully adopted, 18 have been partially adopted, and 1 has not been adopted. The International Monetary Fund in its 2005 Article IV Consultation with Greece pointed out that structural reforms need to be extended to improve productivity and competitiveness including a rapid adoption of a modernized bankruptcy law, which, as of 2005, was under study by a high-level commission. More »

As a result of a European Commission Regulation (EC) No 1606/2002, starting January 1, 2005 all European Union (EU) listed companies are required to prepare consolidated accounts following the International Financial Reporting Standards (IFRSs) endorsed by the EC. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. In addition to EU requirements, Greece requires IFRSs for annual accounts for listed companies and permits use of IFRSs in the consolidated and annual accounts for other companies which are audited by certified auditors. Other companies will continue to report according to Greek Generally Accepted Accounting Principles (GAAP), which, according to the International Monetary Fund (IMF), will limit overall transparency. More »

The Greek Corporate Governance Code of 2002 contains 44 recommendations compiled on seven main categories. The principles and best practice rules incorporated in the code were closely modeled according to the OECD Principles on Corporate Governance. Through the said code, rules were set with the following objectives: matters relating to the structure and obligations of the Board of Directors; matters concerning the company's internal control mechanisms; and transparency in reporting on matters of use of capital raised by the listed companies through a capital increase. According to a 2005 OECD report, the corporate governance principles could be made more effective by making them part of the listing requirements on a comply or explain basis. The Hellenic Capital Market Commission (HCMC) is the main regulatory authority of the Greek capital market. However, the HCMC has no power to intervene, notwithstanding its considerable supervisory and regulatory powers; instead the matter is referred to the relevant Department of the Ministry of Development. More »

On May 17, 2006, Directive 2006/43/EC of the European Parliament and the Council came into force requiring all statutory audits to be carried out on the basis of International Standards on Auditing (ISAs) as adopted by the European Commission. EU member states shall adopt and publish the provisions necessary to comply with this Directive before June 29, 2008. Member States may impose additional requirements relating to the statuary audits of annual and consolidated accounts for periods expiring on June 29, 2010. As stated in the Financial System Stability Assessment (FSSA) prepared by the international Monetary Fund (IMF) in 2006, Greece plans to adopt ISAs by 2007. More »

Greece is a member of the Financial Action Task Force (FATF) on money laundering. According to the International Monetary Fund's 2006 Financial System Stability Assessment (FSAA) report, Greece has put in place some essential components for an AML/CFT (Anti-money laundering/combating the financing of terrorism) framework, but further refinements are needed to meet international standards. While the legal and supervisory arrangements based on the Anti-Money Laundering Law (Law 2331/1995) cover the traditional financial sector, there are issues of implementation and coverage. The designated non-financial businesses and professions (DNFBPs) are not covered, compliance with the AML/CFT obligations is uneven, and supervisory practices vary. Greece's Financial Intelligence Unit (FIU) does not currently have the structure, powers, and skills required under the FATF standard. Greece has had some successes in prosecuting money laundering, but judicial practice has only recently clarified certain aspects of the offense. The definition of financing of terrorism does not fully meet the international standards. More »

According to the International Monetary Fund (IMF) in its 2006 Report on the Observance of Standards and Codes (ROSC), the payment systems of Greece are satisfactory and fully linked into the European Union (EU) system, and the deposit protection scheme is in conformity with the relevant EU directive. The Greek system, HERMES, is a real-time gross settlement system, connected to TARGET that handles large value and cross-border transactions. The Athens Clearing Office (ACO) handles retail and large value paper checks. An additional payment system - DIAS - is owned and operated by a consortium of banks and handles electronic retail transactions. More »

Financial Regulation and Supervision

The International Monetary Fund (IMF) in its 2006 IMF Report on the Observance of Standards and Codes (ROSC) noted that the Greek supervisory regime is largely compliant with the Basel Core Principles (BCPs) for Effective Banking Supervision. According to the report Greece is fully compliant with 22 Principles. The IMF assessment highlights the progress in the legal framework for banking supervision over the past fifteen years and the adequacy of prudential regulations. The Bank of Greece (BoG) acknowledges most of the observations of the IMF's mission and agreed to address the shortfalls with measures that have either already been undertaken or are planned for the near future. More »

According to the 2006 International Monetary Fund's (IMF) assessment of implementation of the International Organization of Securities Commission's (IOSCO) Objectives and Principles of Securities Regulation in Greece, the Hellenic Capital Markets Commission (HCMC) has achieved a high degree of compliance with the IOSCO principles. The HCMC is an active and energetic regulator and has extensive powers to monitor market institutions and market practice. Greece is continuing a robust program of review of relevant law and practice, with particular regard to the applicable EU directives. However, the IMF noted that the HCMC has an immediate and important regulatory challenge, relating to financial reporting. Greece has adopted the International Financial Reporting Standards (IFRSs) and the International Standards on Auditing (ISAs). Both apply in Greece to final or interim statements with balance dates beginning March 31, 2005. The HCMC is involved with others in promoting the new standards and procedures and in establishing programs for surveillance and compliance. The HCMC acknowledges that the quality of published audited financial statements in the past have not been good. Thus, the IMF recommends that the HCMC demonstrate great resolution in ensuring high standards of compliance with the new rules. More »

According to the Financial System Stability Assessment (FSSA) conducted by the International Monetary Fund (IMF) in 2006, the level of observance of the Insurance Core Principles (ICPs) in Greece is mixed, with the legislative and supervisory initiatives that are being pursued holding the potential to materially improve the level of observance in the coming years. In some areas, where basic frameworks are in place, it has been recommended that implementation be strengthened or become more flexible to cope with changing conditions, e.g., by conducting more rigorous off-site analysis of financial information, performing regular on-site inspections, moving to a more dynamic basis for the valuation of liabilities, and establishing and communicating a solvency control level. In other cases, where either legal requirements or supervisory guidance are either absent or fairly high level in nature, recommendations focus on the issuance of more complete and explicit requirements or guidance to industry regarding supervisory expectations, e.g., in the areas of governance, risk management, and internal controls. At the time of the assessment, the supervisor for the insurance sector was the Insurance Directorate (ID), which weakly supervised the insurance sector, particularly because of limited supervisory resources. An independent supervisory authority, the Insurance Supervisory Commission (ISC), was created in December 2004. A Presidential Decree that would enable the transfer of supervisory responsibilities from the ID to the ISC was expected by mid-2005, while the actual transfer was expected to occur by mid-2006. More »

Legend:

Credit Ratings

Moody's A1/Positive

Fitch A/Positive

Standard & Poor's A/Stable

Macroeconomic Data

2007 GDP (Current Prices): 314.6 billion USD (IMF)

2007 GDP (Per Capita): 28,273 USD (IMF)

2008 GDP (Growth Forecast): 3.5% (IMF)

2008 Inflation (CPI): 3.5% (IMF)

2007 Unemployment: 8.4% (CIA)

2006 Foreign Direct Investment

FDI (Inward): 5.4 billion USD (UNCTAD)

FDI (Outward): 4.2 billion USD (UNCTAD)

2006 Official Development Assistance

ODA (Received): N/A million USD (OECD)

ODA (Disbursed): 424 million USD (OECD)