ECONOMY

Budget data reveal extent of problems

budget-data-reveal-extent-of-problems

The January-August budget data that the Finance Ministry released on Wednesday reflected the critical situation that the Greek economy finds itself in. State revenues posted a decline of more than 4 billion euros, while the state is only serving the needs associated with the payments of civil servants and pensioners.

In the year’s first eight months the reduction of expenditure amounted to 4.7 billion euros, owing to the empty state coffers, and resulting in a virtual primary surplus of 3.8 billion euros.

Under these circumstances, the new government will have to submit a supplementary budget in Parliament in early October, as provided for by the third bailout agreement that Greece has signed with its creditors.

The net revenues of the budget amounted to 28.7 billion euros, down by 4.07 billion or 12.4 percent compared with the target. Some 1.7 billion euros of that concerns eurozone central banks’ non-payment of earnings from Greek bond holdings.

Following strong pressure by Alternate Finance Minister Tryfon Alexiadis, there was a strong rise in revenues from tax authorities in August. Last month’s revenues were marginally within target, as tax authorities’ takings came to 2.8 billion euros in August, up 28.17 percent from a year earlier. In contrast, revenues from customs authorities came in 100 million euros lower than August 2014.

In the next four months the state will have to collect 18.1 billion euros in order to execute the budget without problems.

The budget’s spending amounted to 31.86 billion euros in the year to end-August, down by 4.74 billion from the target of 36.61 billion euros. The spending of the Public Investments Program came to 1.56 billion euros, lagging the target by 1.53 billion euros.

Ministry officials estimate that with the gradual normalization of cash flow into state coffers, the level of state expenditure will slowly revert to the amount provided for by the budget.