New record in state borrowing

State borrowing will reach record levels for the year today with the auctioning of three-month treasury bills, highlighting expectations that it will reach, if not exceed, 60 billion euros by the end of 2009. Today the Public Debt Organization will auction T-bills with a total value of 1.5 billion euros and will also accept noncompetitive offers of up to 30 percent of the auctioned amount, which should take the total amount drawn in paper to 2 billion euros. This will raise the amount of public borrowing since the start of the year to 56 billion euros. The huge amount borrowed reflects the fiscal derailment and serious problems in the execution of the budget. The size of the problem becomes evident when comparing this year’s amount with those of 2008 (45.5 billion euros) and 2007 (37.8 billion euros). Even in 2004, the year the government has been citing for comparisons for later fiscal progress, state borrowing reached 37.7 billion euros – about 20 billion euros less than this year. The budget deficit that year came to 7.8 percent of gross domestic product.