Worrying signs for Greece’s economy as revenues decline

Fresh warning signs that the fragile economic recovery observed last year may have come to an early end are causing concern within the government, which is urgently trying to convince taxpayers to pay their dues.

Official data released on Thursday showed that the primary budget surplus halved last month and revenues didn’t even reach 80 percent of their target, while unemployment stopped declining in November and the contraction in construction activity accelerated.

After pleas in Parliament by Prime Minister Alexis Tsipras and Alternate Finance Minister Nadia Valavani for taxes to be paid and for those with debts to the state and the social security funds to apply to enter the previous government’s 100-installment repayment scheme, the Finance Ministry has started sending e-mails to taxpayers asking them to settle their arrears to the tax authorities. January’s slide in state revenues has forced the ministry to take immediate measures such as activating tax collection and monitoring mechanisms.

According to official data on the budget’s execution in January, net revenues amounted to 3.68 billion euros, trailing the target by 936 million euros, or 20.3 percent.

A ministry statement on Thursday attributed that shortfall to the extension to the deadline for the payment of value-added tax to February as well as the failure of the expired debt settlement scheme to fetch the anticipated revenues.

The provisional figures for the 2015 budget in January showed a 367-million-euro surplus in the state budget, against a target for 1.28 billion and a surplus of 619 million in the same month last year. The primary surplus came to 443 million euros, against a target for 1.36 billion and 835 million in January 2014. Expenditure was 16 million euros within the target, coming in at 3.315 billion euros, against a target for 3.331 billion.

The unemployment rate stopped shrinking in November, registering 25.8 percent, the same as in October, although on an annual basis it declined by 1.9 percentage points from 27.7 percent in November 2013, according to the Hellenic Statistical Authority (ELSTAT).

Manpower Organization (OAED) figures showed an increase of 3,861 in the people registered as unemployed in December, reaching 1,063,928.

ELSTAT figures also revealed signs of acceleration on Thursday in the rate of decline in construction activity in November, as building permits came to just 1,088, corresponding to 210,700 square meters in terms of surface area and 837,900 cubic meters in volume. This translates into a 30.9 percent year-on-year drop in permits, a 34.3 percent fall in surface covered and a 37.3 percent decline in volume.