July blip not enough to put pension fund revenues in order

The introduction of capital controls and, to a greater degree, the fear of a haircut on deposits gave social security funds a brief respite in July, according to the general government financial data published on Monday.

The deficit of the pension funds dropped to 460 million euros from 1.07 billion euros in June. However, fund revenues in the first seven months of the year declined by 11.1 percent compared to the same period in 2014, illustrating that there is no room for complacency. There are also fears about August, as it is estimated that the lack of liquidity, the increase in unemployment and the political uncertainty will have made the situation worse.

Finance Ministry figures showed that the increase in social security contributions in July due to haircut fears brought the funds’ deficit down from an expected 898 million euros to 460 million. While in the first six months of the year fund revenues were averaging a monthly 2.6 billion euros, in July they soared to more than 3.4 billion euros. The sum by end-July amounted to 19 billion euros, against 21.38 billion a year earlier.

The data also showed that healthcare spending by social security funds declined in the first seven months of 2015, amounting to 19.46 billion, down 7.5 percent from last year.