ECONOMY

Efforts to put lid on deficit

Once again the Finance Ministry is warning government agencies to keep a lid on spending in order to help reduce the budget deficit and public debt. In a circular sent to all state agencies and independent subsidized bodies, Deputy Economy and Finance Minister Petros Doukas called on them to curtail operational expenses. While budgeting for next year, ministries must heed government efforts to improve fiscal indicators and subsidized agencies should consider covering their needs from their own resources first before turning to state aid. Those who ignore these principles will see their outlays from the budget being slashed, Doukas warns. While drawing up their 2007 budgets, ministries and subsidized agencies must also provide expenditure estimates for 2008 and 2009. Their proposals for funding must contain an «effective program of action,» the cost of which can be precisely measured. Doukas also warns – and not for the first time – that overtime and traveling expenses must be cut. He points out that such costs rise over the year and, more importantly, actual costs always significantly exceed estimates. Expenditures on consumables must be reduced in 2007, Doukas adds. Budgets from the ministries and subsidized agencies for the next year must be submitted by June 30, while regional authorities must submit their budgets by July 7. The government still hopes to reduce the 2006 budget deficit to below 3 percent of the country’s GDP and avoid further close monitoring by the European Commission and the council of finance ministers (Ecofin). However, the Commission estimates that, while the 3 percent limit will be attained in 2006, it will be breached again in 2007, with the deficit rising to 3.7 percent of GDP. To avoid this eventuality, the government also plans to intensify inspections of companies in order to ferret out the tax-dodgers. Budget revenues have increased spectacularly early this year, but government officials believe more can still be done. One way to improve inspections is to equip all tax officials with complete data regarding the company to be inspected. Toward this purpose, the General Secretariat of Information Systems yesterday announced a tender for the acquisition of 1,848 laptops to be used by tax inspectors.