The net payment of state dues amounting to 1.52 billion euros in the period from April to September sufficed on Thursday for the European Stability Mechanism to approve the disbursement of the 800-million-euro subtranche which had been pending since the second bailout review.
This amount, along with a contribution of 400 million euros by the Greek state, is destined for the repayment of additional arrears to state suppliers, taxpayers etc, with an end-January 2018 deadline for the completion of payments.
In fact the state paid off debts of 6.3 billion euros from April to September, but in the meantime it also created fresh arrears of about 4.8 billion. This reduction of overdue debts by just over 1.5 billion is actually 300 million euros above the target of the bailout program.
The clearing of delayed payments was achieved through program funding and state resources. The biggest drop in the volume of overdue debts was observed last month, when 1.3 billion euros was paid out in tax rebates. Some 400 million went toward outstanding pensions and another 200 million to cover the obligations of social security funds, state corporations, local authorities and other entities in the broader public sector.
The ESM noted, however, that the structural deficiencies that lead to the accumulation of new overdue arrears remain in place and should be tackled as soon as possible. Authorities should proceed with the inspection of debts that must be completed by March, it added.