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EUROPEAN INVESTMENT BANK RISC Consortium and the UNU-CRIS Summer School/ Students Research Symposium, 3 rd July 2012, Luxembourg Greek Structural Programme Loan operation Lessons learnt on the Greek social capital Sebastian Hyzyk PJ/ERD/REGU

SLIDE 1

PJ/ERD/REGU 1

European Investment Bank

EUROPEAN INVESTMENT BANK

RISC Consortium and the UNU-CRIS Summer School/ Students Research Symposium, 3rd July 2012, Luxembourg

Greek Structural Programme Loan operation – Lessons learnt on the Greek social capital

Sebastian Hyzyk

SLIDE 2

PJ/ERD/REGU 2

European Investment Bank

Lessons learnt on the Greek social capital

Outline

Greek Structural Programme Loan Definitions and concepts Cases on social capital in Greece Concluding remarks

SLIDE 3

PJ/ERD/REGU 3

European Investment Bank

Greek Structural Programme Loan

EU Funds Co-financing 2007-2013 – Greece Project cost: EUR 21.5bn Loan amount: EUR 2.0bn (9%) Duration of loan: 25 years Borrower/Promoter: Hellenic Republic Implementation period: 2007-2015

SLIDE 4

PJ/ERD/REGU 4

European Investment Bank

Greek Structural Programme Loan

EIB framework loan supports the implementation of the Greek National Strategic Reference Framework 2007-2013:

OP Environment and Sustainable Development OP Competitiveness and Entrepreneurship OP Digital Convergence OP Development of Human Resources OP Education and Lifelong Learning 5 regional OPs PATHEP Railway Corridor

SLIDE 5

PJ/ERD/REGU 5

European Investment Bank

Greek Structural Programme Loan

Expected benefits: SPL will cater to the recovery and sustainable development of the Greek economy acceleration of implementation EU Funds absorption crucial for the Greek economy EIB Technical Assistance, in particular in challenging sectors such as water and waste management

SLIDE 6

PJ/ERD/REGU 6

European Investment Bank

Greek Structural Programme Loan

At the appraisal stage numerous risks identified Risk Assessment and Mitigation Action Plan was requested EIB also provided Technical Assistance for the Project Implementation Unit

SLIDE 7

PJ/ERD/REGU 7

European Investment Bank

Definitions and concepts Social capital J.S. Coleman – variety of entities, which consist of social structures and facilitate certain actions of actors (persons or corporate) within the structure

e.g. rules, norms, relationships, associations, networks, behavioural codes

R. Putnam – features of social organisations, such as

networks, norms and trust, that facilitate action and cooperation for mutual benefit Individual and/or collective (civicness)

SLIDE 8

PJ/ERD/REGU 8

European Investment Bank

Definitions and concepts

Institutions Rules Norms Social networks Associations Individual relations Conventions Behavioural codes Trust Reputation

Source: R. Camagni, in R. Capello, P. Nijkamp (eds) Handbook of Regional Growth and Development Theories

Formal Informal Macro Micro Transactions Information Cooperation

Collective action

SLIDE 9

PJ/ERD/REGU 9

European Investment Bank

Definitions and concepts

Institutions (D. North) formal (rules, laws) and informal constraints (norms, codes) including mechanisms of their enforcement

Resource allocation and employment (continuous) Governance, contracts (1 to 10 years) Institutional environment (10 to 100 years) Embeddedness: informal institutions, customs, traditions (100 years and more)

Source: O. Williamson, The New Institutional Economics… ,

SLIDE 10

PJ/ERD/REGU 10

European Investment Bank

Trust and cooperation

Well-functioning public administration in Greece is a requirement In general high technical capacity of individuals, but… …lack of effective human resources management (demotivation)

Type of entity Personnel Central Government 1,809 Ministries and associated entities (hospitals, schools etc.) 634,154 Regions 15,785 Municipalities 95,547 Local entities/municipal companies 14,775

SLIDE 11

PJ/ERD/REGU 11

European Investment Bank

Trust and cooperation

Lessons learnt on the Greek public administration Lack of empowerment of middle management Lack of delegation of authority Clusterisation of information Political appointments Lack of trust between civil servants and political authority

SLIDE 12

PJ/ERD/REGU 12

European Investment Bank

Trust and cooperation

Day-to-day running of the administration is done

n a political level and regular political changes

hinder continuity of actions Ownership of the reform is lost at the middle management level Administration is too formalised Weak follow-up of the implementation of policies

SLIDE 13

PJ/ERD/REGU 13

European Investment Bank

Trust and cooperation

Little coordination between and within the ministries Fragmentation and overlaps among structures Cooperation based on personal networks

SLIDE 14

PJ/ERD/REGU 14

European Investment Bank

Trust

Need for better regulation and governance

complex legal framework legal formalism established to secure integrity, but… time consuming licensing (environmental impact assessment) litigation procedures (expropriation, public procurement) inappropriate individual behaviours

SLIDE 15

PJ/ERD/REGU 15

European Investment Bank

Associations Associations in water sector

Water sector suffers from fragmentation Small beneficiaries lack capacity Positive experience - EDEYA (Hellenic Union of Municipal Enterprises for Water Supply and Sewerage) EIB suggested to strengthen the environment by promoting networking among Water Boards to exchange experience in operation and maintenance (twining partnerships) professional training and certification for blue collar workers strengthening consulting industry by conferences and guidelines publishing annual benchmark report

SLIDE 16

PJ/ERD/REGU 16

European Investment Bank

Networking

EC Task Force for Greece Member States and IMF support in the areas of administrative reform, taxation and budget, justice, anti-money laundering, e-governance, anti-corruption, human resources management benchmarking opportunity transfer of know-how EIB is also providing Technical Assistance

SLIDE 17

PJ/ERD/REGU 17

European Investment Bank

Concluding remarks

Social context constraints the economic activity (Lack of) social capital has an impact on the project preparation and implementation in Greece and subsequently on the regional development

SLIDE 18

PJ/ERD/REGU 18

European Investment Bank

EUROPEAN INVESTMENT BANK

RISC Consortium and the UNU-CRIS Summer School/ Students Research Symposium, 3rd July 2012, Luxembourg

Greek Structural Programme Loan operation – Lessons learnt on the Greek social capital

Sebastian Hyzyk

Lessons learnt on the Greek social capital

Outline

Greek Structural Programme Loan Definitions and concepts Cases on social capital in Greece Concluding remarks

Greek Structural Programme Loan

EU Funds Co-financing 2007-2013 – Greece Project cost: EUR 21.5bn Loan amount: EUR 2.0bn (9%) Duration of loan: 25 years Borrower/Promoter: Hellenic Republic Implementation period: 2007-2015

Greek Structural Programme Loan

EIB framework loan supports the implementation of the Greek National Strategic Reference Framework 2007-2013:

OP Environment and Sustainable Development OP Competitiveness and Entrepreneurship OP Digital Convergence OP Development of Human Resources OP Education and Lifelong Learning 5 regional OPs PATHEP Railway Corridor

Greek Structural Programme Loan

Expected benefits: SPL will cater to the recovery and sustainable development of the Greek economy acceleration of implementation EU Funds absorption crucial for the Greek economy EIB Technical Assistance, in particular in challenging sectors such as water and waste management

Greek Structural Programme Loan

At the appraisal stage numerous risks identified Risk Assessment and Mitigation Action Plan was requested EIB also provided Technical Assistance for the Project Implementation Unit

Definitions and concepts Social capital J.S. Coleman – variety of entities, which consist of social structures and facilitate certain actions of actors (persons or corporate) within the structure

e.g. rules, norms, relationships, associations, networks, behavioural codes

networks, norms and trust, that facilitate action and cooperation for mutual benefit Individual and/or collective (civicness)

Definitions and concepts

Institutions Rules Norms Social networks Associations Individual relations Conventions Behavioural codes Trust Reputation

Source: R. Camagni, in R. Capello, P. Nijkamp (eds) Handbook of Regional Growth and Development Theories

Formal Informal Macro Micro Transactions Information Cooperation

Collective action

Definitions and concepts

Institutions (D. North) formal (rules, laws) and informal constraints (norms, codes) including mechanisms of their enforcement

Resource allocation and employment (continuous) Governance, contracts (1 to 10 years) Institutional environment (10 to 100 years) Embeddedness: informal institutions, customs, traditions (100 years and more)

Source: O. Williamson, The New Institutional Economics… ,

Trust and cooperation

Well-functioning public administration in Greece is a requirement In general high technical capacity of individuals, but… …lack of effective human resources management (demotivation)

Trust and cooperation

Lessons learnt on the Greek public administration Lack of empowerment of middle management Lack of delegation of authority Clusterisation of information Political appointments Lack of trust between civil servants and political authority

Trust and cooperation

Day-to-day running of the administration is done

hinder continuity of actions Ownership of the reform is lost at the middle management level Administration is too formalised Weak follow-up of the implementation of policies

Trust and cooperation

Little coordination between and within the ministries Fragmentation and overlaps among structures Cooperation based on personal networks

Trust

Need for better regulation and governance

complex legal framework legal formalism established to secure integrity, but… time consuming licensing (environmental impact assessment) litigation procedures (expropriation, public procurement) inappropriate individual behaviours

Associations Associations in water sector

Networking

Networking

EC Task Force for Greece Member States and IMF support in the areas of administrative reform, taxation and budget, justice, anti-money laundering, e-governance, anti-corruption, human resources management benchmarking opportunity transfer of know-how EIB is also providing Technical Assistance

Concluding remarks

Social context constraints the economic activity (Lack of) social capital has an impact on the project preparation and implementation in Greece and subsequently on the regional development

THANK YOU

Sebastian Hyzyk Project Directorate

Environment and Regional Development Department Regional and Urban Development Division hyzyk@eib.org