ECONOMY

Budget data reveal an alarming state of affairs

budget-data-reveal-an-alarming-state-of-affairs

The alarming state of the country’s social security funds, and the state budget in general, is reflected in the fiscal data for the first 10 months of the year released on Wednesday by the Finance Ministry. The needs of the pension funds have even exceeded the estimates made in early October, while the government is continuing its payments freeze due to the shortage in revenues so that it can finance the inflexible expenditure for salaries and pensions.

In total budget spending in the year to end-October was 4.1 billion euros short of that foreseen in the first draft of the 2016 budget in early October. That shortfall resulted from the 3.1-billion-euro payment halt in the public sector, as well as the 1-billion-euro cut in spending by the Public Investments Program.

However, it is mainly the data regarding the funding of social security funds that provide the greatest cause for concern: The fund for the self-employed (OAEE) has exceeded the provision for its annual funding. At end-October it had already received 107.9 percent of its annual credit, in order to meet its obligations.

Similarly, the Social Security Foundation (IKA) had by October 31 received 92.3 percent of its funds for the entire year, the farmers’ fund (OGA) had received 84.8 percent and the Healthcare Service Organization (EOPYY) 83.2 percent.

At the same time, the government has frozen huge chunks of benefits to be able to pay salaries and pensions and maintain the primary budget surpluses. Therefore, it has paid out only 49.1 percent of the annual funds to hospitals, 35.5 percent of funds to families with four or more children, 67 percent of the subsidies to various entities, and so on.