NEWS

Public spending sleuths

In a new attempt to curb wasteful spending and enhance accountability in the public sector, the Finance Ministry is proposing to set up a powerful squad of fiscal inspectors with the authority to scrutinize in depth the expenditures of all state-financed bodies, from the president’s office to local authorities. Under a draft bill to be submitted to Parliament by Deputy Finance Minister Petros Doukas, the Fiscal Inspectors Squad will monitor the use of budgetary funds, and European Union subsidies, allotted to all public sector organizations. The independent squad’s scope will include President Karolos Papoulias’s office, Parliament, government ministries, regional and local authorities, the Church of Greece and independent state bodies, as well as all private organizations or groups that receive state funding accounting for over half of their annual revenues. In its drive to reduce the budget deficit to a level that conforms with European Union and eurozone strictures, the government has said it hopes to reduce expenditures from 50.4 percent of GDP to 49 percent over the next two years. According to the latest estimates, the deficit for 2004 stood at a massive 6.1 percent, just over double the eurozone ceiling of 3 percent. Economy Minister Giorgos Alogoskoufis has pledged to reduce this to 3.5 percent this year, and 2.8 percent by the end of 2006 – when an EU deadline for Greece to squeeze its deficit under the 3 percent ceiling expires. The tax hikes announced on Tuesday – VAT rates will rise by between 0.5 and 1 percent, while taxes on cigarettes and alcohol will increase too – are also intended to help in the effort by diverting an extra 2.64 billion euros into the state coffers by the end of next year. The new Fiscal Inspectors Squad will have the power to carry out in-depth examination of state-financed organizations’ finances that will go beyond a simple scrutiny of whether all expenditure is strictly legal to investigate the expediency of individual outlays. The squad will enjoy full independence.