ECONOMY

Ministers told to curtail spending

The budget deficit has grown to a worrying size, forcing the economy minister to publicly ask his colleagues to curb their spending. Official data of the General Accounting Office showed yesterday that budget revenues grew to 6,783 million euros in the first five months of this year, from 4,396 million euros in the same period of 2007. Revenues before tax rebates grew by 5.3 percent over the previous year, while net revenues increased by 3.5 percent. Speaking in a television interview yesterday, Economy and Finance Minister Giorgos Alogoskoufis sent a message to his colleagues in the government that there is no more money available beyond what is provided in the budget. «The budget cannot be stretched like a rubber band. Everyone must do their job with the funds allocated to them in the budget, as voted by Parliament,» said Alogoskoufis, who confirmed that those on low pensions and the unemployed will receive a heating allowance in the fall. Though the rise in revenues is smaller than the budget target, the gap is expected to be closed to some extent by the expected increase, as of the fall, in revenue from the single property tax. Tax rebates have also grown because of the new system of heating oil sales. Primary expenditure grew by 12.1 percent, while interest payments decreased by 3.9 percent. In total, budget spending posted a rise of 8.4 percent in the January-May period. The growth in primary spending is mostly because of the increased expenditures for salaries due to the new pay scales for the military and police, the funding of various state agencies such as the Social Security Foundation (222 million euros), the funding of social security and contributions to the European Union (322 million euros). Compared with 2007, pensions and salaries show a 9.3 percent increase, social security and medical funding posted an 18 percent rise, while operating and other expenditures grew by 16.3 percent. Revenues from the Public Investment Program show a 13 percent reduction, but its spending has swollen by 31.4 percent.