Threat of more measures for 2012

New measures will be required for this year’s budget if the state shows signs of relaxation because of the elections in order to prevent the budget deficit from drifting, a high-ranking official at the Finance Ministry said on Monday. He added that the new government would be expected to carry out any new measures in June.

With the first signs from the revenues front for this year being negative, indicating a lag of 1 billion euros in the first two months and another poor performance in March, extra measures in June appear ever more likely, with the official adding that this was the demand of the representatives of the European Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika.

Revenues before tax returns grew by 3.3 percent in March, according to sources, which is exclusively attributed to the restructuring of outstanding debts. This means that last month?s revenues amounted to 3.5 billion euros, up from 3.4 billion in March 2011. If tax refunds exceed 100 million euros then the comparison year-on-year will be negative.

Finance Minister Filippos Sachinidis has urged the tax collection mechanism to remain alert throughout the election period in order to bolster public revenues and avoid any extra measures.

The new government will at any rate have to introduce additional measures in June for 2013 and 2014 to cover 11.5 billion euros, as the troika has dictated. The Center of Planning and Economic Research (KEPE) is next week expected to deliver to the government its first draft of proposals for the measures needed for 2013-14. The final report on the proposals is expected by the end of May and will include more measures than are actually needed for the next government to make its choice.

Next week, most likely on Tuesday, the Cabinet will decide on the terms for the recapitalization of Greek banks. This will be conducted with bonds from the European Financial Stability Facility. The government is examining the special characteristics of the bonds, such as their maturity period etc.