Gov’t again fails to clear its arrears

Gov’t again fails to clear its arrears

The government keeps postponing the payment of its overdue arrears to suppliers and taxpayers. A law amendment tabled on Monday in Parliament for an Education Ministry bill defines May 31, 2019 as the new deadline for the completion of the debt repayment process.

This obviously constitutes an effort to fulfill the pledge Finance Minister Euclid Tsakalotos made at the latest Eurogroup meeting, on April 5, concerning bringing expired debts down to zero. That was when the eurozone finance ministers decided to disburse 970 million euros to Athens.

Before that, another five deadlines for clearing out all outstanding debts to suppliers and taxpayers had passed without the target being met. The first was the end of 2016, then June 2017, and that was followed by the conclusion of the bailout program in August last year. It had become clear long before that that deadline would also be missed, and a ministerial decision set December 31, 2018 as the new deadline, even granting one month for the return of any cash of general government entities to the state coffers.

Eventually a new legislative intervention set March 31, 2019 as the deadline, but the expired debts did not come down to anywhere close to zero. The latest official figures, for February and published last week, showed that state dues to third parties delayed for over 90 days have been constantly growing since December 2018, when they had stood at 2.031 billion euros: They then climbed to 2.066 billion in January and reached 2.149 billion euros at end-February. They included the overdue arrears of the social security organizations (i.e., pending pensions), amounting to 636 million euros at end-February, down from 642 million a month earlier.

The delays in the payment of state dues are among the issues Greece’s creditors are annoyed about, despite the good will they have been expressing ahead of next month’s European elections. In its enhanced surveillance report in February, the European Commission said new expired debts continued to be created after August 2018, thereby slowing their clearance, and the International Monetary Fund recorded the lack of progress in cutting the debt stock.

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