The government is about to introduce a expenditure ceiling for each ministry for each three-year cycle, according to demands set by the country’s creditors.
The Finance Ministry has started to revise the medium-term fiscal plan that has to be ready by the end of the month, and is set to include the introduction of a limit on the spending of each ministry for the 2014-16 period and for every three-year period thereafter. This constitutes one of the so-called prior actions which must be carried out before the disbursement of the February tranche of bailout loans amounting to 2.8 billion euros. Along with the rest of the revised plan, it will be submitte to the Euro Working Groupd on January 31 for approval by the Eurogroup in February.
Ceilings set will be binding for the first two years of the cycle (2014 and 2015), while the spending of the third year (2016) could be revised in each of the next updates of the midterm plan.
Still, Finance Ministry officials noted that the measure would have made more sense if it applied beyond ministries to other state bodies or generally to whole sectors, such as health. Such a limit would contain spending on procurements and save much more money, they say.