ECONOMY

Gov’t unable to tame the debt beast

govt-unable-to-tame-the-debt-beast

The state’s overdue arrears to its suppliers seem like an untamed beast: Although in November the state paid off 225 million euros, its total debts to third parties fell by just 12 million euros. This means that while it covered some of its dues it also created some new ones, neglecting the government’s commitment to its creditors to bring such debts down to zero by the end of 2018.

In early January last year the state owed 3.3 billion euros; to date it has paid off 1.8 billion of that, but its total debts now appear just 700 million euros lower. Therefore, in the first 11 months of 2018, the government and its entities created fresh debts of 1.1 billion euros.

It is thus clear from the November data that the government had abandoned its target for a debt-free start to this year. This was despite the notices served to Athens by its creditors, with Eurogroup President Mario Centeno and Euro Working Group chief Hans Vijlbrief highlighting the delays in the implementation of reforms, including the repayment of debts to third parties. It is likely that these notices will turn into warnings from Monday when the mission chiefs arrive in Greece for the start of the second post-bailout inspection.

About a month ago, Alternate Finance Minister Giorgos Houliarakis admitted in Parliament that there was a problem with the repayment of state dues. He also asked the State Audit Council to examine why the Greek state generates debts and cannot eliminate them. What has been proven is that over half of the expired dues are not the state’s responsibility, and a large part of them are the subject of court cases.

The total amount of pending tax rebates came to 734 million euros, posting an increase by 107 million euros on a monthly basis.

Worse still, the actual figure of state arrears is even higher, as the data released each month by the State General Accounting Office do not include the pending rebates by customs offices to individual travelers or freelance professionals and the outstanding value-added tax and special consumption tax rebates to industries, hotels, fishing boats and ships.