Borrowing needs could get bigger

The Economy and Finance Ministry may borrow an additional 3 to 5 billion euros in October by issuing government bonds in a bid to cover the budget shortfall arising from lower-than-expected tax revenues. The extra borrowing requirements, if necessary and filled, will mean that Greece will have tapped capital markets this year for 60 billion euros, some 20 billion euros more than originally planned. At the start of October, the General Accounting Office will be in a position to judge whether the country’s budget woes warrant further borrowing. In October, the Public Debt Management Agency (PDMA) has scheduled to auction off treasury bills. According to sources, the budget deficit in the first seven months of the year reached 9 percent of gross domestic product. The extra finance needs may force PDMA to turn to international investors, a few months before it launches its 2010 borrowing program. At the moment, the Finance Ministry is working on the draft budget for 2010, even though it will not be tabled in Parliament on October 5 – as stipulated by law – due to the general elections. The Finance Ministry is also preparing to submit to the European Commission its updated estimates on economic growth, the budget deficit and public debt by the end of September.