Municipalities will see their funding for August cut by 30 percent so that the money the government saves can be used on social welfare spending, including payments to disabled Greeks and cancer sufferers, the cash-strapped government revealed on Wednesday.
Interior Minister Evripidis Styliandis said that he has signed two decisions allowing the funding to local authorities to be reduced and instead diverted toward the social welfare budget, where payments have been delayed.
?By taking today?s decision, we have responded to a great moral dilemma caused by the acute economic crisis,? he said. ?Given that public expenditure has been severely curtailed, we had to decide what were going to prioritize: continuing the monthly funding of 135 million euros for the operational costs of local authorities or pay in full the outstanding benefits for May and June for a section of our society that is being severely tested? We chose the second for obvious moral and social reasons.?
Just over 183,000 Greeks claim social benefits and had not received any payments over the last two months. The claimants were due to receive almost 130 million euros in May and June.
The government had said the delay was the result of a census, which was conducted to root out false claims. However, it is now clear that a lack of cash was to blame. Alternate Finance Minister Christos Staikouras revealed this week that ?cash reserves are almost at zero? and that the government does not know how long they will last.
Stylianidis said the government would try to ensure that municipalities receive the 40 million euros that will be cut from their August budget.
?We are not giving up the effort to secure funds that will protect their viability and effectiveness,? he said.