Revenue dip, high debt hurt budget

With a ballooning public debt and revenue collection continuing to lag well behind official targets, Greece’s state finances could be heading for derailment this year. According to data released by the General Accounting Office yesterday, revenues trailed targets during January-May, as has been the case for most individual months of 2005. Revenues in the period ending in May rose 4.1 percent year-on-year versus the 11.4 percent target. Government officials have been trading accusations over why the state has been inefficiently collecting money as top ministers continue to call for an improvement in collection rates. The budget, however, could be further hurt this year by a possible slowdown in economic growth if international oil prices keep setting new highs, according to economists. On the spending front, expenses for the five-month period jumped 6.8 percent despite a disciplined start to the year. The annual target for the year is 4.6 percent. Data released yesterday confirmed that a large chunk of government spending goes to servicing its massive public debt. Over the first five months of the year, Greece paid 6.6 billion euros in interest expenses alone. The country’s public debt, now at more than 110 percent of gross domestic product (GDP), is one of the highest in the eurozone.

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