The government has created fresh debts in the 2015-2017 period to end up owing 4.49 billion euros, from 3.8 billion in 2014, despite receiving 5.1 billion euros from the European Stability Mechanism (ESM) up until last month for the precise purpose of clearing its arrears.
According to a report by the Finance Ministry that was delivered to lawmakers along with the 2018 budget on Tuesday, reducing state debts is one of the government’s key priorities. Yet for every 7.7 euros it has paid in arrears since coming to power, it has generated fresh debts of 10 euros.
“With the continued flow of funding from the ESM in 2018 and efforts by agencies to settle their overdue debts, but also with close supervision and observation from the State General Accounting Office, a further reduction is expected in 2018,” the report notes. “The ultimate goal is to normalize the manner of repayment of the general government’s debts to third parties and boost the economy’s liquidity.”
Of that 4.49 billion euros, 2.1 billion is owed by social security funds, with EOPYY responsible for 910 million euros; 931 million euros regards pending tax returns; 552 million is owed by hospitals; 400 million concerns the debts of various legal entities; 234 million is owed by ministries and 322 million euros’ worth of arrears belongs to local authorities.