Far from slashing state budget spending, gov’t planning its increase


Instead of decreasing public spending as demanded by creditors, the government foresees in the 2016 state budget an increase in spending compared with 2015 of 450 million euros.

In total, state spending in the budget for this year comes to 49 billion euros, up from 48.545 billion in 2015, though the final figures will be altered according to the outcome of the negotiations with lenders.

The government’s intention, as outlined in the proposals it has presented to creditors in the context of negotiations, is actually to further increase state expenditure this year as it seeks alternative solutions to finance a number of measures.

These include not having to slash defense spending by 500 million euros – a measure originally included in the list for 2016 – because of the migration crisis, the increase in public sector salaries by 150 million euros, and preserving all pensions – main and auxiliary – through alternative measures such as increases in taxation or in social security contributions.

The budget provides for cutbacks of at least 700 million from this year’s pension bill, most of which will concern state coffers.