September will be decisive for the next gov’t
As soon as the next government assumes office, it will walk into a minefield of disputes over Greece’s fiscal target.
The outgoing administration’s belief that economic growth this year will come to 2.3 percent, that the excessive primary surplus of 2018 will offer additional fiscal leeway to this year’s budget and that the settlement of debts to tax authorities and social security funds will have a positive effect on state revenues, is being challenged from various sides.
Both the European Commission and the Bank of Greece have diagnosed a fiscal gap, with September being a key month. A few days before the new government will have to submit its first 2020 budget draft to Brussels, the statistics service will publish the data on second-quarter economic performance. The State General Accounting Office will have already compiled the budget execution data for the first eight months of 2019, and the deadline will be approaching for the submission of settlement applications for debts to funds and the state.
Budget data so far are not encouraging. In the first five months there has been an overrun in expenditure due to the May handouts, while the collection of overdue arrears in the first four months is significantly lower than in the same period last year. As for the arrangement of debts in up to 120 tranches, that has only fetched 70-80 million euros to date.
