ECONOMY

Debt keeps rising, but will fall in 2005

The public debt is shooting ever upward, like a rocket blasting full speed into outer space. Over the last quarter alone, debt increased by 2.23 billion euros, reaching 202.50 billion at the end of the third quarter, according to data released by the General Accounting Office yesterday. The data is perilously close to the forecast of 203.36 billion for the whole of 2004. The same data showed that the state’s cash reserves at the end of July stood at 5.31 billion euros, up from 4.19 billion at the end of April. As stated above, the government’s revised projections for the 2004 budget call for a central government debt of 203.36 billion, equal to over 123 percent of the country’s gross domestic product (GDP). However, according to the rules set by the Maastricht Treaty and which govern the functioning of the European Monetary Union, this is not the official debt figure, but the general government debt, which excludes internal debt (that is, from one state agency or enterprise to another). Greece’s general government debt will stand at 184.34 billion euros, or 112.1 percent of GDP, at the end of 2004. According to projections made in the 2005 budget, the general government debt, or public debt, will decline to 176.4 billion euros, or 109.5 percent of GDP, in 2005, declining further to 106 percent in 2006 and 102.5 percent in 2007. This, if achieved, would mark the first sustained decline of debt in several years. Part of the debt is the so-called «military debt,» which will be 6.26 billion euros, or 3.5 percent of GDP in 2005. In 2004, it was 6.5 billion (4 percent of GDP) and, in 2003, 6.4 billion (4.2 percent). The government is still spending a large amount on armaments, mainly to fulfill engagements made by its predecessor. In 2005, it will spend 1.6 billion euros on armaments, down from 1.79 billion in 2004, but up from 987 million in 2003. The 2005 figure is equal to the expected revenue from privatizations.