State finances are source of deep concern

The state of public finances and how to bring government spending under control were the subjects at the heart of the first Cabinet meeting of the new year which took place yesterday. Prime Minister Costas Karamanlis made it clear to his ministers that there will be very little room for deviating from strict spending targets over at least the next 12 months so that new life can be breathed into public finances. «The new year is crucial and decisive. The effort to reform public finances is difficult but it has to be made and crowned in success,» Karamanlis told journalists. «Now is the time to secure a balance in public finances, an area which for many years has been a permanent sore undermining the future of the country. It is our political choice not to pass on the weight to citizens but it requires cooperation, responsibility and self-control from everybody,» the premier added. This final comment was interpreted by some as referring to the current dispute between cotton farmers and the government over subsidies. The Karamanlis administration has so far refused to buy up excess cotton produced by the farmers, despite threats that they will blockade national roads. In the spirit of Karamanlis’s directive, Deputy Economy and Finance Minister Petros Doukas yesterday informed all ministries that their budgets would be cut as part of an effort to rein in public expenditure. Education will be one of the worst-affected sectors, as 65 percent funding cuts will be introduced for universities and state technical colleges, while student welfare will be similarly affected. Subsidies for ferry services to out-of-the-way islands will also be chopped by 65 percent. Funding will be halved for overtime payment in the police and coast guard. Spending on sports activities in schools will also be reduced by 50 percent, as will certain funding to public transport bodies, particularly in Athens. In addition, Doukas told ministries that they also need to engage in general housekeeping and limit their electricity bills, reduce telephone use and perform strict checks on the allocation of consumable products. The deputy minister, however, made it clear that certain essential costs such as rent, regular salaries and court costs would be covered in full.