Economic Progress in Nikaia-Ag. Ioannis Rentis During Greek Economic Crisis (2011-2013)

1. THE ECONOMIC PROGRESS OF THE MERGED MUNICIPALITY NIKAIA – AGIOS IOANNIS RENTIS DURING THE YEARS OF THE ECONOMIC CRISIS IN GREECE (2011-2013) VICE MAYOR IN THE SECTOR MAYOR OF ECONOMICS GEORGE IOAKIMIDIS TOUNTAS S. KANELLOS M.Sc. MBA, Ph.D. Member in the Board of Directors of the Union of Local Authorities of Greece

2. Nikaia – Ag. I. Rentis Established: 1924 from Refugees who came from Asia Minor and evolved from two old Municipalities, called Nikaia and Ag. Ι. Rentis Population: 150.000 Residents Location: Near the port of Piraeus Workforce: 950 Unemployment: 55% Poverty : 48% of its residents is under the limit of poverty Immigrants: 32%

3. THE ISSUE OF THE MUNICIPAL DEBT • Municipal Debt: 87 mil. Euros • Overdrawing: 42 mil. Euros • Monthly Deficit - 500.000 Euros . in combination with : - Economic crisis in Greece - Decrease of Government Subsidies - Decrease of Municipal Revenues IMPORTANCE • Unable to pay everyone accumulation • unable to serve of debt to the • the residents unable to residents • operate

4. Municipal Debt vs other Problems Content Major problem Municipal Debt If it can’t be served Demolition of Social structures and infrastructures

5. CLAIM MAKER • Who is the one who says that there is a problem? • Reality Inability to pay • 2011 The NEW MUNICIPAL AUTHORITY had NO idea about the Debt Evolved from the previous small Municipality of Ag. I. Rentis • Debt and Monthly Deficit was recorded by the New Municipal Authority • Only the previous Municipal Authority were aware of the problem • Third Overdrawn Municipality in Greece • The Previous Authority played down the Debt

6. CAUSES OF THE PROBLEM • Every Municipal Authority accused the previous ones Has its own Responsibilities of the problem concerning the Debt

7. BASIC CAUSES OF THE PROBLEM Bad Organizational structure Lack of transparency in Supplies Inability to collect outstanding Payments Existence of Subsidiaries related to the Municipality which were the core of the lack of transparency Irrational management of Expenses and Unrealistic Budgets

8. STRUCTURE OF THE PROBLEM 2011: €87 Million € 42 mil.€ 45 mil. LOANS Other Liabilities This was further made worse by • a 62% reduction of Governmental Subsidies • the inability of the residents to pay

9. WHO HAS THE RESPONSIBILITY TO SOLVE THE PROBLEM? Exclusively:The Municipal Authorities Because of • The inability of the Central Government to allocate funds to the Local Authorities However Away from the tough Supervision of the Memorandum but within its strict principles Municipalities Obtain their Economic Autonomy without loosing their administrative Autonomy work only for the benefits of the residents

10. OUR FINANCIAL POSITION TODAY 31/12/2013: €37,4 Million Debt € 37 mil.LOANS€ 400.000 Other Liabilities (vs € 45 mil.) by paying off € 5 mill. By Using the funding aid from the EU and from own recourses our own resources, accurately and transparently Elimination of the monthly Deficit (€ 500.000) Revenuues>Expenses The monthly loan installments can be paid

11. EXTRA PROFIT €23Million DURING 2011-2013 (500.000 *12* 3 Years) =€ 18.000.000 5.000.000 from haircut = € 5.000.000 € 23.000.000

12. GENERAL: How did we do it? With Objective criteria • Change of Organizational Structure • Creation of a Computerized Warehouse and Accounting Department • Absolute Control of any inventories • Reduction of Various elastic costs (rents, spare parts, car services, disposables, etc) • Long-Term management of Loans • Reduction of the interest rate of the Loans • Using contemporary financial Instruments ( ie Leasing) • Absolute control between cash influxes and expenses

13. GENERAL: How did we do it? • Application of Accrual Basis Accounting system • Making the most of Human Recourses • Exploiting every European Funding Projects • Haircut to the old Suppliers of the Municipality • Using rules of Transparency such as Internet, Diavgeia, Public announcements for supplies etc • Reducing the old Outstanding Payments • Creating Realistic Budgets • Making full use of the money which was sent by Troika to pay old overdue payments BUT

14. GENERAL: How did we do it? BUT • Without diminishing social services, structures and Infrastructures (ie. civilization, athletic activities, folklore, School subsidies, welfare, Crafts etc) • Keeping the existing workforce • Feeding the Homeless • Without Increasing of Public Fees • Helping unemployed people • Collecting outstanding Payments

15. THE PROGRESS OF THE ECONOMIC SITUATION DURING 2011-2013 The progress of the Economic situation is being presented below

16. THE PRESENTATION OF THE ECONOMIC POSITION OF THE MERGED MUNICIPALITY NIKAIA-A. I. RENTIS DURING THE YEARS 2011-2013 • RESERVES .

17. OUTSTANDING PAYMENTS We have recorded an important reduction in the outstanding payments and because of this we have already increased the Cash Liquidity.

18. CHART OF OUTSTANDING PAYMENTS

19. LOANS In the table below is being presented the progress of loans which have been paid off during the years 2011-2013 only by our own recourses

20. SHORT-TERM LIABILITIES

21. CHART OF SHORT-TERM LIABILITIES

22. CHART OF THE GOVERNMENT’S SUBSIDIES PER YEAR Reduction 62,98%

23. OPERATING COSTS

24. THE PROGRESS OF EU FUNDING AID TOWARD THE GREEK LOCAL AUTHORITIES UNTIL DECEMBER 31, 2013

25. THE PROGRESS OF OUR MUNICIPALITY’S DEBT PAY OFF DURING 2011-2013

26. Thanks for your attention and we are waiting for you at our Municipality!