The shortfall in state revenues grew further last month, burdening the budget and hindering the government in its negotiations with the country’s creditors. The Finance Ministry had to slash expenditure considerably to contain the damage to the budget, and the primary surplus for the January-February period came in 168 million euros off target, although the shortfall was much smaller than in January.
General Accounting Office data showed on Friday that budget revenues in the first couple of months reached 7.3 billion euros, against a target for 8.4 billion. In January the shortfall stood at 1 billion euros while in February it expanded by 121 million to exceed 1.1 billion euros in the year to end-February.
The reason that February’s shortfall was smaller than that of January is the extension granted for the payment of value-added tax (VAT) and the two installments that most taxpayers chose for VAT repayment.
Against this backdrop the ministry is now anxiously waiting to see how March will unfold in terms of tax collection so as to determine the precise extent of the revenues problem. The picture is already creating particular concern, and has been the key argument of the technical experts of the country’s creditors regarding the need for more austerity measures.