State ar­rears mount, rev­enues fall short, bud­get fig­ures show

Kathimerini English - - Front Page -

A pri­mary bud­get sur­plus of 3.5 bil­lion eu­ros was recorded in Greece’s state bud­get for the first seven months of the year com­pared to a tar­get of a 3-bil­lion-euro sur­plus.

The sav­ings came as a re­sult of dras­tic cut­backs by the cash­strapped gov­ern­ment in the months be­fore a deal was reached with its cred­i­tors and the cap­i­tal con­trols im­posed in late June to keep the coun­try’s bank­ing sys­tem from col­laps­ing.

The non-pay­ment of 4.4 bil­lion eu­ros in state dues to third par­ties was also recorded in the same pe­riod, con­tribut­ing in part to the sav­ings.

To­tal state bud­get rev­enues for the first seven months of 2015 came to 26.7 bil­lion eu­ros com­pared to a tar­get of 30.8 bil­lion eu­ros, a short­fall of 4.1 bil­lion eu­ros.

In to­tal, the state bud­get was 40 per­cent short of its ex­pected tar­get for the month of July. The bud­get deficit has led the gov­ern­ment and its lenders to change the al­ready re­vised growth tar­get for 2015 to re­flect a pri­mary deficit of 0.25 per­cent of GDP in­stead of a 1 per­cent pri­mary sur­plus tar­get, which had also been re­vised down from the 3 per­cent sur­plus tar­get ini­tially de­manded by Greece’s lenders for 2015.

Ac­cord­ing to the Min­istry of Fi­nance, the dis­crep­ancy in the Jan­uary-July 2015 bud­get can be at- trib­uted to the ex­ten­sion of the dead­line for per­sonal in­come tax dec­la­ra­tions (and pay­ment of the first in­stall­ment) along with that for le­gal en­ti­ties’ in­come tax dec­la­ra­tions and pay­ment.

Ad­di­tion­ally, the non-con­fir­ma­tion and non-pay­ment of the first in­stall­ment of the 2015 ENFIA prop­erty tax con­trib­uted to the deficit, as well as the fact that Greece did not re­ceive 1.7 bil­lion eu­ros in prof­its from Greek bonds held by Eurosys­tem cen­tral banks.

Greece and its in­ter­na­tional lenders have ne­go­ti­ated lower fis- cal tar­gets as part of the coun­try’s new bailout agree­ment, re­flect­ing the fact that the un­der­ly­ing eco­nomic con­di­tions have de­te­ri­o­rated since last year, which put the goals agreed by the gov­ern­ment led by An­to­nis Sa­ma­ras be­yond the reach of the cur­rent coali­tion.

The tar­gets, tweaked from an ear­lier base­line sce­nario, fore­see a 0.25 per­cent of gross do­mes­tic prod­uct pri­mary bud­get deficit this year, turn­ing into a 0.5 per­cent sur­plus from 2016, 1.75 per­cent in 2017 and a 3.5 per­cent sur­plus in 2018.

The Fi­nance Min­istry has in­creased its ar­rears to taxpayers and sup­pli­ers by 4.4 bil­lion eu­ros this year to com­pen­sate for a col­lapse in rev­enues.

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