Code: “Hypnotize the Troika”!

Today marks the start of a long bazaar with hundreds of professional agents and sectors for the future of regulations that will come from next July.

With almost a “subtle” move, the bill which the minister of Finance presented to the cabinet on Wednesday, is essentially seeking to hypnotize the Troika and the entire market, to confront one by one six of the most “powerful” business sectors (lawyers, notaries, engineers, architects, pharmacists and certified auditors).

The bill provides for the collective elimination of hundreds of restrictive and protective devices of the past, as called for by the Troika. But the provisions of the law will apply 4 months after the voting. This leaves all the “hot issues” open, to be identified by ministerial decisions or by presidential decrees. The “loopholes” and the fine print are so extensive that almost nothing will be final, even after the implementation of the law in February or March.

The logic of this law will imarily satisfy the Troika since all the legal restrictions which were anti-competitive and provided high income for entire sectors of professionals, have been eliminated.

For example, the bill eliminates:

* the exclusive availability of goods from a certain category of business premises or their ban (eg petrol stations from supermarkets)

* the imposition of restrictions linked to the participation in the composition of share capital or company capital, concluded on the existence or absence of a specific professional title
* the imposition of obligatory “by law” minimum or maximum prices or fees (“tariffs”) for the provision of goods or services (whether defined as an amount or a percentage value or volume of transactions, etc.).

However, as Papakonstantinou knows so well, “the devil’s in the details”. So, the side regulations and decisions that will judge everything will be constantly put on the table.  For example:

Taxis

To start with, the law provides for  “minimum distances” will no longer apply for opening a new business facility (adjacent to an “old” one of the same type), neither will a specific number of permits for any profession per area, nor will it be examined whether there is a “real need” to increase the number of business defined by the State. This way, in theory, offices, bakeries, OPAP agencies and whatever else will be able to open close to existing businesses of the same type. Also, there will be no limit to how many permits can be issued for taxis, tourist transportation etc.

But all this is turned around with a “key” provision contained in the bill: it states that each minister will be able to block the opening up of professional sectors within his responsibility. It is also mentioned that “it is possible to establish exemptions for a certain profession if maintaining the legal status of prior administrative authorization is necessary for compelling reasons of public interest and if the conditions for maintaining the principle of proportionality are not met”, through a presidential decree to be issued after the proposal of the relevant minister within 4 months from the implementation of the law (June or July 2011).

So, for example, the minister of Transport Dimitris Reppas will be able to exclude taxis since in this case, based on considerations such as the traffic and environmental problems in Athens which are "pressing", for reasons of “public interest” no new taxi vehicles must be added to the 13.500 already authorized to work in Athens.

Lawyers

From today until June the government has a chance to focus on the hot issues of “noble” professions. For lawyers for example, with whom the minister will soon meet, it is now valid that they can take a case anywhere in the country besides their professional base and the local limits of the Association they’re in. However, it is not clear from the provision that there won’t have to be a local lawyer present, as is the case today.  

With the sensitive issue of the fee however, it is set out that initially the lawyer can agree with the client on fee limits which are higher or lower than the existing ones. However, if things don’t work out, «in order to adjudge the legal costs and attorney fees, in the absence of a valid written agreement or when they are appointed by the court to assist people with very low incomes, the present levels of remuneration for judicial documents only (and not for out-of-court work) are retained as legal fees (not as a minimum).

Every necessary adjustment to the provisions and any other legislationconcerning the practice of the profession will be carried out in full through a presidential decree to be issued.

Notaries

Things for notaries are even milder. They will collect lower fees but only for very expensive contracts. A new ministerial decision will be issued, which will determine how to calculate the incrementally decreased proportional fee and the maximum value of the exchange,  above which the proportional fee for the preparation of contracts is not the mandatory, but the maximum permitted one, which can be freely agreed upon by means of a written contract between notaries and clients.

The government is giving a 3-moth period to the associations for negotiations. The ministry of Finance agreed on the amounts that will be set by the decision. If the notaries don’t respond within the given period, the mutual decisions will be issued without their input.

Architects and engineers

In private projects, minimum fees are eliminated, but in order to secure the resources of insurance funds, which are currently retained by TEE and are recoverable, the current amount of mandatory minimum fees, as reference amounts only, remains valid for the calculation of deductions.

The same amounts are reserved as legal fees in cases of non-written agreements in order for courts to determine the fair and equitable remuneration of engineers.

Studies of public projects

* The participants in the competitions for public works are able to freely provide their financial bid, which may also be lower than the pre-estimated fee.
* In cases of extremely low offers, the contracting authority shall not reject the offer, but invite the applicant to justify the amount. It will accept the lowest bid, but will have to verify it.

Certified auditors

Theoretically the omertà has been broken since until now, article no20 Penal Code 226/1992 includes a provision for the referral to the Disciplinary Board of an auditor for “inappropriate behavior, including negotiation of fees for a statutory audit”! The referral for inappropriate behavior remains and the negotiation of fees for a statutory audit is eliminated (but without it being invalid as an explanation for such behavior).