ECONOMY

Solution sought for budget woes

The Finance Ministry is looking into ways to get the budget back on track after revenues in the first six months of the year missed the mark. Sources said Economy and Finance Minister Giorgos Alogoskoufis has ruled out introducing any new taxes and has given tax offices instructions to intensify audits and reach settlements with taxpayers that owe the state money. «One of the options being examined is offering more favorable terms to taxpayers that owe money, this amount reaches some 15 billion euros,» said one ministry official. «Whether the government adopts this measure will depend on how the next few months go.» Budget revenues in the first six months of the year rose 5.7 percent, falling well short of the targeted 12.1 percent annual growth rate in a sign the government may soon be forced to revise its 2008 fiscal goals. Figures from the Finance Ministry show that revenues in the January-to-June period rose by 1.33 billion euros to 24.8 billion euros. Government spokesman Theo-doros Roussopoulos yesterday tried to play down the poor results in the first half of the year but stopped short of stating that the budget targets will be achieved. «A budget is executed over the course of a year and we are in the seventh month,» he said. «The situation is difficult. There are attempts to increase revenues and to meet goals set in the budget.» The Finance Ministry is hoping that revenues will pick up in the last few months of the year in order to meet the target of lowering the deficit to 1.6 percent of gross domestic product from 2.8 percent in 2007. Debts reaching 2.5 billion euros from the state hospital system, however, may eventually push last year’s deficit above the 3 percent mark as the government considers paying them off by offering government bonds. Eurostat, the statistical arm of the European Union, has indicated that the debt amount will burden the 2007 deficit, the year when the debts were incurred but not when they were paid off.