NEWS

Financial straits

Prospects don’t change easily. Simitis might have gained time on the political front and succeeded in postponing any debate on the crisis until July, but the original causes of it remain. Opinion polls to be released in the coming period will confirm – barring any sleights of hand – the results of another published by Kathimerini last week, since the majority of people are being seriously affected by the crisis. The introduction of the euro has been catastrophic for lower income groups. In combination with the stock market crash, it has brought large sections of the population to their knees. Those on a wage find it hard to make ends meet, not to mention those on smaller pensions or the unemployed, who are all being driven to the fringes of society. At the same time the government lacks the resources to implement populist measures capable of softening the blow of these phenomena. The budget is in danger of derailment. In the first four months, revenue increased by just 1.3 percent, far short of the target of 5 percent, and expenditure by 18 percent, putting pressure on public finances. Social services have incurred massive debts and are threatened with collapse. Hospitals alone owe 1.26 billion euros (430 billion drachmas) and everyone knows that the welfare networks have insufficient resources to cover their many needs. Injections to boost the budget, such as the sale of ELPE, expected to bring in 325 million euros (111 billion drachmas), is not even enough to cover debts owed to hospitals by the farmers’ social security fund (OGA). There are many who believe that to a great extent, the government makes its decisions according to the state of the economy. The timing of the elections will depend to a great degree on developments in the economic sector. If the government perceives that the economic crisis is irreversible, then elections will be brought forward in order to exploit whatever the current potential may be, and to let the next government take up the burden.