The “Kallikratis Program.” The Influence of International and European Policies on the Reforms of Greek Local Government: A Story of Moderate Success

The 2008 economic crisis that erupted in the US gradually spread across the globe causing severe repercussions for European economies. Greece was one of the most heavily affected nations, inter alia, because of its uncontrolled public spending. Consequently, the principal means of addressing the economic crisis has been governmental austerity measures, which in turn have substantially influenced the public administration functioning and have led to reforms, including in local government operations. Greece’s local government reforms have been an ongoing effort since the early 1990s. The first reform effort, the “Kapodistrias program”, reduced the number of local government entities to a very large extent. Nevertheless, it did not transform their structure. The 2010 “Kallikratis” plan brought about more fundamental changes. Greece’s international agreements with its major lending partners have introduced further local government reforms, including both direct reforms and indirect ones concerning the administration as a whole and affecting local government as well. These reforms can be further divided into two types of measures: those aimed to directly cut governmental spending and those aimed to enhance the effectiveness of government’s administrative operations. One of the international memoranda signed recently by the Greek government states that “the bulk of adjustment will be achieved through expenditure cuts that aim at permanently reducing the size of the state and improving government efficiency, including by closing entities that no longer provide a cost-effective public service and by targeted reductions in public employment”.

This article provides a critical overview of the main reforms that the Greek government is implementing in order to reduce its public debt by reforming local government entities. The reform initiative promotes administrative efficacy, modernization, rationalization and adaptation to international and EU standards. Section A presents some of the reforms introduced in order to cut public spending and to create an administrative apparatus structured to operate in an accountable and cost-effective way. These reforms align with a set of international agreements that Greece has signed with its foreign partners. It highlights both the legal and institutional setting under the international adjustment programs focusing on reforms in local government law. Section B examines the meandering path of local government reform in Greece from its beginnings to the current developments. It analyzes the role of local government in the administration of Greece and its relationship with the central government. It illustrates the early EU influences on Greece’s administration of local government and details the main reforms introduced by the 1997 Kapodistrias program. Particular focus is on the new administrative structure of the local government based on the 2010 Kallikratis reforms. Section C focuses on Greek courts’ judicial review of local government reforms on constitutional grounds. In light of the broader context of judicial review in Greek constitutional law, the courts’ interplay between judicial self-restraint and centralism in reviewing local government reforms is discussed. This section then examines the main innovations of the Kallikratis reform from a constitutional perspective.