ECONOMY

State dues rise instead of falling

state-dues-rise-instead-of-falling

The state has ceased paying off its debts to its suppliers after the country exited the bailout program in the summer. Instead of diminishing, the state’s dues increased slightly in October, as the government’s is obviously prioritizing the payment of social dividends and covering the ruling party’s promises.

The data released on Monday by the State General Accounting Office showed that state debts to suppliers and taxpayers created within 2018 increased to 2.621 billion euros at end-October, from 2.613 at end-September.

The government has given up trying to bring its arrears to third parties down to zero by end-December, its latest target date, even though the country’s creditors and Eurogroup chief Mario Centeno have issued strict recommendations regarding delays related to the implementation of reforms, including the repayment of debts. It is likely the issue of guidelines will become more pressing during monitoring for the European Commission’s second enhanced surveillance report in mid-January.

Data show that hospitals and broader state sector companies saw their debts rise in October, while outstanding tax rebates came down. The debts of ministries come to 114 million euros, local authorities to 263 million, social security bodies to 799 million, hospitals to 476 million (up from 409 million at end-September) and various state corporations to 341 million euros. Pending tax rebates stand at 627 million euros, down 72 million on a monthly basis.

However, the state’s debts are actually far higher, given that the State General Accounting Office does not include outstanding rebates by customs offices and the special consumption tax and value-added tax rebates to industries, hotels, fishing vessels and ships.

New Democracy economy spokesman Christos Staikouras commented that “contrary to government pledges, the full repayment of the state’s arrears remains a midsummer night’s dream. They should have brought them down to zero by August 20 and they still stand at over 2.6 billion euros, while their payment is exclusively based on overtaxing citizens.”