Gov’t to launch spending review
Finance Ministry aims to see public expenses cut by 10 pct to fund social interventions from 2018
The Finance Ministry is launching a spending review across the country’s ministries and the entities they supervise, with the aim of cutting expenditures and helping the funding of social initiatives, particularly so-called the Social Income for Solidarity.
A ministerial decision is expected in the next few days for a coordinating committee that will su- pervise the review project. Sources say ministries will also be asked to located areas of their budgets where expenses can be cut by as much as 10 percent.
The aim of the project is to give the government a large enough cushion to fund social initiatives it has decided. Although there is no specific fiscal target for now, the Finance Ministry believes there is scope for spending cuts without affecting the quality of the services offered by the state.
The benefits will be reflected in the 2018 budget, as the project is expected to be completed in two phases by June 2017. Therefore, any fiscal benefit to stem expenses will not be incorporated in the midterm fiscal plan the government is likely to submit to Parliament in September.
Alternate Minister Giorgos Chouliarakis explained in Parliament during the week that through this initiative the government wishes to “implement the combi- nation of fiscal discipline with social justice.” The Social Income for Solidarity provides for the distribution of 900 million euros to be distributed.
Sources say the ministries and the other entities across the public sector will be asked in the spending review process to answer the question “what can you do to spare a part of your expenses?” A pilot program will begin this year with three ministries, before extending to all ministries in the following 571.57 1.1014 months. The spending review will have to be completed by June 2017 so that the data can be incorporated in the budget of 2018.
In the meantime, Standard & Poor’s yesterday confirmed Greece’s sovereign rating at ‘B-‘ with a stable outlook. The ratings agency also forecast that the country’s debt will peak at 179 percent of gross domestic product at the end of this year, before declining to 173 percent by 2018 if the bailout program is adhered to.