BUSINESS

Social security fund revenues post major decline in March

By Prokopis Hatzinikolaou

Greece’s social security funds are experiencing a dramatic decline in revenues, partly due to the drop in state funding, according to data from the State General Accounting Office released on Monday.

In the first quarter of the year the pension funds showed a primary deficit of 349 million euros, against a primary surplus of 798 million euros in the same period in 2014. At the same time, the expired debts of the state exceeded 4.4 billion euros, owing to the cessation in domestic payments by the government.

These developments, combined with the drop in tax revenues, have led to a 51.6 percent drop in the general government’s primary budget result from the first quarter of 2014. It amounts to 1.186 billion euros, against 2.454 billion euros in Q1 2014. Finance Ministry officials’ projections point to a further deterioration in the months to come due to the considerable slump in tax revenues and the rise in expired debts.

According to the data announced by the ministry, pension funds are in dire straits as the state has reduced its funding to them by 17.1 percent and their revenues have dropped by 12.1 percent on an annual basis, amounting to 8.02 billion euros against 9.15 billion a year earlier. Expenditure came to 8.37 billion, from 8.36 billion in 2014. Revenues from social security contributions dropped considerably from 4.72 billion in 2014 to 4.02 billion this year.

Expired state debts climbed to 4.43 billion euros at end-March from 4.01 billion at end-February, adding 418 million euros in just one month. Most of the expired debts burden healthcare organization EOPYY (1.39 billion euros) and hospitals (903 million euros). The obligations of the Civil Servants’ Pension Fund amounted to 382 million euros while those of local authorities reached 319 million.

The expired debts are the obligations of the state to third parties such as suppliers that have been overdue for 90 days or more, and outstanding tax rebates.

The collateral for the banks’ emergency liquidity assistance (ELA) reached 69 billion euros at end-March, from 22 billion a month earlier and from zero at end-December. The state debt came to 312.7 billion euros at end-March from 324.1 billion at end-December.

Online