Lack of spending drives surplus
Greece’s state coffers are decidedly empty five months into the year as the available figures paint a rather worrying picture of the course of the country’s public finances during that period.
Although the official figures have yet to be published, sources say that tax revenues in the January-May period posted a shortfall of 1.7 billion euros. This is attributed to the delay in the submission of income tax declarations, meaning that no revenues have come in that way, and to the reduction in consumption resulting in a significant drop in value-added tax takings. This is expected to continue until at least the end of this month as the above delays are not likely to have run their course before that time.
The same sources add that state budget expenditure for the period was 2.5 billion euros below target, which illustrates the halt in payments to third parties such as taxpayers, who are awaiting their tax rebates, and state suppliers. Finance Ministry officials say that virtually all payments to state suppliers have been halted while the financing of social security funds and the rest of the public sector has been reduced to no more than absolutely necessary levels.
This has led to a virtual primary surplus of 1.5 billion euros, according to unpublished data, because if the State General Accounting Office had fulfilled its obligations the primary result would have been a deficit of 1 billion euros in the year to end-May.
It is actually quite strange that the official budget data for the first five months of the year have not yet been released, as the provisional figures should have been issued as of June 10.
Meanwhile, a circular issued on Tuesday by Alternate Finance Minister Dimitris Mardas announces that 2016 budget spending will be reduced by 3.3 billion euros. The circular, issued ahead of the drafting of next year’s budget by the various state entities, says the upper limit of spending for next year will be 55.60 billion euros, compared to 58.89 billion euros this year.
