Next Generation EU: Greece’s chance to cut through its digital Gordian knot
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Next Generation EU: Greece’s chance to cut through its digital Gordian knot

Friday, 04 December 2020
This is an opinion article by an external contributor. The views belong to the writer.
Wind turbines in Greece.

In mid-November, Greece submitted its draft action plan for its €32 billion tranche of the Next Generation EU stimulus package to the European Commission, outlining for Brussels how Athens intends to use its share of record EU loans and grants to fund improvements to the country’s physical infrastructure as well as its emerging green and digital economies.

As Theodore Skylakakis, the Greek deputy finance minister, made clear after the draft was submitted, €8.3 billion – a significant chunk of the €19.4 billion in grants Greece will receive from the EU – will go towards renewable energies and digital infrastructure, such as an expansion of the mainland energy grid to cover island communities and the deployment of 5G.

One element of the Greek plans currently flying under the radar could have major implications for the future of how Greeks interact with their government. According to the draft, Next Generation EU funds will allow for the full digitalization of the Independent Authority for Public Revenue (IAPR), which has progressively been moving to digitalize how companies report their financial information to tax authorities.

Replicating a revolutionary year for Greece

Moving this type of core public function online is a small, but significant step for a country where  a quarter of the population still lacks internet access in their homes, and where even those who do have a connection are often limited by low internet speeds and a dearth of online services. Of course, this being 2020, what might have seemed like a major milestone just a year ago sounds much less revolutionary in comparison to the radical transformations that accompanied the start of the Covid-19 pandemic.

As the first wave of the coronavirus broke over Europe, the Greek government scrambled to fit the equivalent of several years’ worth of progress in digitalization into just a few weeks, urgently moving to keep the country’s still-fragile economy afloat. Key documents like residence certifications and university degrees finally became accessible online, and Greeks were able to use their mobile phones to collect prescriptions and obtain needed permissions to leave their homes during confinement.

Given their lived experience of how quickly external factors can force long-delayed digital progress, Greeks now have good reason to wonder whether enough of the Next Generation EU funds are going towards the digitalization of their country’s notoriously labyrinthine public services. Brussels is effectively offering Prime Minister Kyriakos Mitsotakis and his government a blade with which to cut through a particularly vexing Gordian knot, but it’s up to Athens to demonstrate how deftly it can wield it.

Breaking out of a bind

While the first months of the pandemic upended some of Greece’s existing digital stumbling blocks, many others remain. The Greek justice system, which has yet to implement potential digital solutions, is one of the most inefficient in Europe, taking 4.5 years on average to enforce contracts brought to Greek courts. Greece is also the only EU country that still lacks a computerized land registry, creating a maze of bureaucracy and land disputes that poses a serious problem for the broader economy.

These examples help explain why the Greek government finds itself on the wrong side of a “digital divide” within the EU that is best illustrated by the annual Digital Economy and Society Index (DESI). DESI is a composite index which summarizes relevant indicators in order to track the digital performance of European countries, covering areas such as connectivity, human capital, the take-up of internet services and digital technologies, and the digitalization of public services. Greece sits 27th among 28 EU members in the most recent edition of DESI (which still includes the UK), both in terms of the overall index and in digital public services.

Fortunately for Greece, both its own lived experience and that of other EU member states has shown how quickly change can come, provided governments invest both the needed political and fiscal capital to transform their public sectors from analog obstacles into digital foundations for growth.

The Estonian model

Greece may start from a relatively unfavorable position, but DESI offers useful examples of how smaller and less affluent EU member states can excel in digitalizing their public sectors – and how even the richest European countries still have room for improvement. Germany, for example, has also been relatively slow in digitalizing its government agencies, particularly on the local level. However, the problem has been recognized and certain regions, particularly Berlin, have managed to become successful examples of how to implement government e-services effectively.

Both Greece and Germany can learn a number of lessons from Estonia. Since joining the European Union in 2004, Estonia has emerged as a digital powerhouse thanks to a government drive to make it the most Internet-connected country in the world. It leads the continent in terms of e-governance and has pioneered several initiatives that allow citizens to vote online in national elections or file tax returns in as little as three minutes. As a result, Estonia ranks first in DESI’s digital public services index, ahead of digital heavyweights Spain, Denmark, and Finland.

This emphasis on e-government is part of a tradition of digital innovation that helps explain why pioneering European software companies like Skype and TransferWise have their roots in Estonia. Nor did the creation of “e-stonia” happen overnight. Instead, Estonian authorities consciously made the country’s modernization a priority after attaining independence from the Soviet Union in 1991. The rate of innovation and investment in the digital sector has only increased since then.

Recognizing that Estonia offers a roadmap for how they can make rapid progress in digitalizing their own services, Greek Minister for Digital Governance Kyriakos Pierrakakis confirmed last year that the Greek government had brought in the former president of Estonia, Toomas Hendrik Ilves, as a special adviser to Athens’ digital governance projects.

Many within the Greek government clearly understand the need for the public sector’s rapid modernization, particularly in these high-octane times. How Greece uses the opportunity provided by Next Generation EU will determine whether the gains made earlier this year represent the start of a new chapter – or a flash in the pan.