Gov’t keeps real economy cash-starved

The government continues to deprive the market of precious liquidity as its domestic dues exceed 27 billion euros, which rise to 27.3 billion when one also takes into account the reduction in spending on the Public Investments Program (PIP).

At a time when the state’s overdue arrears should be falling, so that the government can bring them down to zero by the end of the bailout program in August and bolster the economy, it is creating fresh debts to businesses that are unable to meet their own obligations, and continues to curtail the investment program while also seeing state entities run out of cash.

At the end of March the government had borrowed 22.5 billion euros from state entities, while owing 4.4 billion to enterprises, and the PIP had been reduced by 335 million euros.

Data analysis shows that the state has created new debts of more than 5.6 billion euros since 2015. At end-2014 state arrears to third parties had stood at 3.8 billion. Since then Greece has borrowed 6 billion from the program to pay off expired debts, but the amount due has only been reduced by 400 million – reaching 3.4 billion euros, plus 1 billion of customs debts.

In order to meet the August milestone for bringing debts down to zero the state will have to pay off 1 billion euros per month, even if no new debts are created.