ECONOMY

State Audit Council finds gaps in fiscal management

A State Audit Council report has revealed an array of «black holes» in fiscal management for 2002, with about 10 billion euros never appearing in budget deficits. Further, defense loans totaling 5.83 billion do not seem to have been accounted for in public debt figures in the last 10 years. For the first time, the Council’s annual report, which is submitted to Parliament, was included in the CD-ROM accompanying the 2004 budget, tabled on Wednesday, as if intended to go as unnoticed as possible. The report draws attention to the lack of clarity in many public accounts which, despite handling millions of euros, appear to go unchecked by anyone. It cites, for instance, paid commission fees totaling 59.7 million euros for various government loans, which were never registered as expenses. In unusually biting terms, the report describes the «special» accounts of ministries which do not appear in the budget as «at odds with the constitutional and public accounting order.» In particular, the country’s top public auditing agency says that a total of 5.1 billion euros of expenses in the 2002 budget have yet to accounted for in detail; the budgets from 1994 to 2001, the report goes on, have not listed as revenue defense loans obtained, totaling 5.16 billion euros; the same applies for defense loans totaling 675.79 million euros in the 2002 budget. Payments totaling 209.97 million euros appear to have been made from three Defense Ministry accounts, but they were never matched with budget entries; the same goes for a sum of 909.5 million euros arising from currency differences in loans Greece obtained from the European Investment Bank (EIB). Sums of 211.1 million and 238.5 million euros listed as expenses in the public investment budgets for 2001 and 2002 respectively do not appear to have been settled. Finance Ministry position The government has not denied the fact that transparency in the management of certain accounts in public finance leaves something to be desired. In specific reference to the faults found in the latest State Audit Council report, it replies that defense loans are being serviced normally and that the failure to register the particular amounts in the 1994-2001 budgets is due to «technical reasons.» It argues that armament programs are implemented over long periods (up to 10 years) and that payments to suppliers are made in advance, adding to public debt but not to the deficit, as there is no corresponding increase in public assets until armaments are delivered or the program is completed. Further, one of the «special» opaque accounts, set up in 1995, aims to reschedule public debt by repaying old, expensive loans. Regarding the EIB loans, the Finance Ministry says the currency differences have arisen due to the consolidation of 81 old credits, while the unsettled sums regarding public investments represent payments in cases which had become drawn-out affairs at the Audit Council. Finally, the Finance Ministry promises that gaps will be registered in future budgets.