State’s expired debts are a bottomless pit
The debts of the Greek state are continuing to mount, even though the Finance Ministry started paying its expired debts in the third quarter of the year.
Ministry data showed that the state’s expired arrears to suppliers and taxpayers came to 6.2 billion euros at the end of September, posting a marginal drop of just 58 million euros from end-August. This is despite debt payments of 1.87 billion euros confirmed by the government to the country’s creditors for the July-September period. However, data from the State Accounting Office show that the state’s debts were only reduced by 1.01 billion euros during the same period, meaning that fresh debts of 857 million were created in the meantime.
The recipients of state debt payments use the money they receive to pay taxes or to service their own debts to banks, as this has been the destination of most of the 2 billion euros of expired debts paid to the private sector this year.
Bank deposits have increased by just 100 million euros since the start of the year despite the stabilization of the economy, the relaxation of the capital controls and the payment of some state debts to third parties. In Q3, when the state paid off debts of 1.9 billion euros, deposits rose by just 770 million, as the rest went toward covering the obligations of corporations and households.