An endless slump

The gap in the current budget in the first quarter of 2011 is increasing rather than decreasing and has expanded to 1,4 billion, compared with the corresponding period of 2010. According to data from the Finance ministry, in just one month (February-March), the "black hole" has grown by about 420 million. The failure to increase revenues and reduce costs, along with the reduction of the "safety cushion" of the Public Investment Program, means that additional, tougher measures are ahead.

The revenue shortfall in the first quarter of this year reached 1,38 billion compared with the quarterly target, and recorded an excess of 156 million in the quarterly goal of containing costs.

Specifically, the net earnings of the regular budget amounted to 11,1 billion decreased by 8,1% last year, mainly due to a decline higher than the expected one – during the preparation of the budget – in the last quarter of 2010, to non-recurring traffic tax revenues by 393 million during January (since the extension on repayment was not granted this year), to reduced revenues from the special levy on profitable businesses by 44 million, and also to the reduced revenue from the withholding of tax statements of individuals because of favorable taxation under the new tax law.

On the other hand, the PIP revenues increased by 121,3% or 604 million. However, the total revenue of the state budget (Regular and Public Investment Program) has increased by 776 million from the initial targets.

According to the budget execution figures for the quarter of January - March 2011, on a fiscal basis, the deficit stands at 4,71 million, lower only by 9 million against the 4,701 million target in the 2011 budget for the same period.

The cost of the regular budget is increased by 3,5%, mainly due to the disposal of 375 million for old hospital debts and the increased expenses for interests, by 437 million euros. On the other hand, the primary costs that are the main indicator for measuring the impact of the effort to reduce costs, are reduced by 2,3% or by 300 million. The PPI costs declined by 55,3% or by about 923 million.