Wednesday, 3 April 2013

Government revenues fall, targets slip

This article was published by EnetEnglish.

The Greek government's revenues are slipping significantly, official figures show on the eve of a new assessment by the country's creditors, raising questions about whether it can repeat last year's feat of meeting deficit targets.

Tax revenues for January and February fell by 624 million euros to 8.6bn - a 6.7 percent drop compared to the same period in 2012. General government revenues (including local government, providential funds, universities, hospitals etc.) fell by 1.6bn euros to 16.9bn, a drop of 8.7 percent. 

The government's balance sheet is still in the black at 72mn euros, but a far cry from the 2.3bn figure at the end of February last year. 

Labour unions warned earlier this year that rising unemployment (nominally at 27 percent) and depletion of bank deposits meant that households could only focus on vital spending for food, clothing and utilities, with little left over to pay taxes and pension funds.

2012 was the only year in which Greece met targets since it borrowed tens of billions of euros from the so-called troika of the European Commission, European Central Bank and International Monetary Fund in May 2010, entering an austerity regime of deficit reduction. Now it appears to be in danger of returning to the more familiar pattern of missing revenue collection targets and deficit targets, as its economy continues to shrink.

Representatives of the troika were due in Athens Wednesday to assess Greece's progress towards claiming a 2.6bn euro tranche of its loan at the end of April. Falling revenues are expected to be on the agenda. Another hot topic will be the departure of at least 150,000 employees from the public payroll by the end of 2015, an economy Greece pledged itself to making in two memoranda that accompanied its bailout loans. 

Greece has worked hard to sharply reduce healthcare and pharmaceutical spending in 2012, but the pressure is now on for the government to dismiss 15,000 employees in 2013. Interior Minister Antonis Manitakis has increasingly emerged as unsympathetic to this idea.

“As it became clear that the departure of 150,000 civil servants could be achieved through retirement, in the second memorandum [of 2012] the further goal was added of 15,000 dismissals,” Manitakis said in a public discussion onWednesday.

“All talk of dismissals stirs an irrational fear in all employees, even worthy ones. It paralyses and undermines every declaration of reform. It cancels out evaluation procedures. In other words, it works as an alibi for doing nothing, changing nothing, leaving everything as it is… and prompts workers to not care and work to order.”

Manitakis said that 32,000 civil servants had been retired in 2012 and that this was not included in the 150,000 that would go by 2015, leaving about 600,000 civil servants still on the job by then. 

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