State company deficit set to stay high

The country’s 52 state companies and corporations will have a total deficit of about 1.4 billion euros in 2009, almost the same as this year, according to the final draft of the budget that will be tabled in Parliament next week. State firms will have almost the same losses as this year, but they will realize more investments, which in turn will lead to their higher borrowing. The biggest problem among state companies is Hellenic Railways Organization (OSE), 800 million euros in the red, which will account for 57 percent of the overall deficit. This is why the ministries of transport and of economy are planning significant changes in the organization’s finances, spearheaded by a voluntary redundancy program. The 52 state firms will have a deficit estimated at 1.406 billion euros in 2009, slightly down from this year’s figure of 1.416 billion euros. The execution of this year’s budget reveals a slight increase in the firms’ losses compared with initial forecasts. There is also an increase of 136 million euros from 2007, which the Economy Ministry attributes to oil price hikes during the year. Investment will grow by 13.5 percent next year, rising from 1.174 billion euros in 2008 to 1.333 billion euros in 2009. This year the government has reined in OSE’s investment program, reducing expenditure by 11 percent year-on-year.