ECONOMY

State pay freeze amasses debt of 6.6 billion

The government?s policy of freezing its debts to third parties over the last couple of years has seen them grow to 6.6 billion euros, or 3 percent of the country?s gross domestic product.

This practice, amounting to a payment default, combined with the squeeze on bank lending, has further aggravated enterprises? already serious liquidity problems. At the same time it constitutes a clear infringement of the terms of the memorandum Athens signed with its official creditors, who had asked for debts to third parties to be brought down to zero.

Official data show that the state owes about 1.25 billion euros to construction companies, while about 3.6 billion euros of debts concern the money hospitals owe to suppliers and pharmaceutical companies and the debts of local authorities and social security funds.

According to the Finance Ministry, overdue debts at the end of January came to 5.86 billion euros, up from 5.78 billion euros in December: This concerns debts to third parties that have been overdue for more than 90 days.

On the other hand, although the sum of overdue debts to the state amounts to 42 billion euros, no more than 8 billion of that can be cashed in. The remaining 34 billion euros concerns people who have died, enterprises that have shut down or are fake, while a considerable amount has been written off.