The state will not pay its debts

The economy team and the Troika auditors are on high alert status, since the state deficit jumped to 7.3 billion euros in the first three months of the year.

So, while the annual target was set at 18bil, it seems that it will reach 28bil by the end of the year. In fact, between February and March it more than doubled (it was 3.3bil euros).

Given this data, and while the Troika’s 5th installment is now in serious danger, the state is unable to meet its obligations and is essentially a step before suspension of payments.

In March, the overdue debts of the state reached almost 500mil euros. Specifically, as the ministry stated, the overdue debts (obligations to third parties that were not paid within 90 days) were at 6.01bil at the end of March, from 5.5bil in February and 5.16bil in December 2010.

However, according to ministry circles, the delay in payments by the government agencies was also attributed to the difficulty they encountered in the transition to the new control system and the commitment of their expenditure. Gradually however, 9 out of 10 eventually entered the system and according to the same sources, there is an improvement in both the payment rate and the deficit after the first quarter.

Nevertheless, the obligations of the state may be even greater since of the 860 agencies that make up the public sector, only 806 provided information. In January, only 658 agencies supplied information, while in February the number increased to 779. 17 insurance funds have not yet complied, and neither have as 35 state entities and two public companies.

It is also worth noting that at the end of 2010, funds needed additional grants of 917mil euros to pay pensions. As the ministry stated in its announcement: “In order to harmonize the accounting records among all public agencies of the General Government, the amount of 917 million euros has been removed from the state expenses of January 2011. This amount relates to subsidies toward insurance funds that were made at the end of December for the payment of pensions in January (given that pensions are paid in advance) and were recorded as January expenses.