State giveth, state taketh away

The state gets back through various taxes most of the money it pays its suppliers as in the last few years companies are not only battered by multiple forms of taxation but also by the state’s reluctance or inability to meet its obligations.

According to data released by the Finance Ministry on Thursday, the expired debts of the state to its suppliers came in July to 5.53 billion euros (which along with the outstanding tax rebates add up to arrears of almost 6.9 billion), down by just 400 million euros from June.

However, the money the government paid out to the market amounted to 1.1 billion euros in July, so the 5.9 billion euros in end-June should have dropped to about 4.8 billion euros in end-July. Consequently July saw the creation of some 700 million euros of new debts to the market.

The level of the new expired obligations created by the state may actually be even higher, given that throughout July the State General Accounting Office credited money from the first subtranche granted to Greece by its creditors to various state entities so that they could cover their debts, while generating new ones that were not serviced.

In August the amounts disbursed by the Finance Ministry reached an estimated 1.6 billion euros, but just like in July, the debts grew. The ministry is expecting reports from the various entities detailing the debts they have covered. This is a bailout commitment aimed at monitoring the process of debt repayment. Greece has received 1.8 billion euros to cover its debts to the market, while the second bailout subtranche of 2.8 billion euros will include 1.7 billion destined for the same purpose.

However, for the creditors to disburse this money, all prior actions for the second subtranche must be fulfilled, and an 80 percent share of the money allocated from the first subtranche should have got paid out, as it has.

There is also 1.35 billion euros owed to taxpayers and corporations in tax rebates.