Budget deficit remains within targets envisaged in the state budget for 2011, the Finance ministry said.

The ministry, in an announcement, said the budget deficit was 4.710 billion euros in the January-March period, up from 4.701 billion euros envisaged in the budget plan for the first three months of 2011. The budget shortfall was 4.371 billion euros in the corresponding period last year. The ministry said significant spending cuts contributed in achieving the first quarter results despite the fact that budget revenues were short by 776 million euros in the three-month period.

Net budget revenues totaled 11.114 billion euros in the January-March period, down 8.1 pct from 2010, with revenues of the Public Investment Program jumping 121.3 pct in the period. Budget spending were up 3.5 pct in the first three months of the year, reflecting higher payments for state hospital debts and interest, while primary spending fell 2.3 pct and spending of a Public Investment Program dropped 55.3 pct.

ND on budget execution; memorandum renegotiation

“The government announces new measures, creating black holes that multiply and become wider as proved by the budget execution,” main opposition New Democracy (ND) party alternate economic sector head Christos Staikouras stated on Tuesday in a scheduled press briefing by ND spokesman Yiannis Mihelakis.

“The economy is in deep and prolonged recession, the debt increases and maintains its momentum, while inflation is high, the production sector is shrinking, unemployment is rising and more and more businesses are being shut down,” Staikouras stressed.

Yiannis Vroutsis, also holding the position of ND alternate economic sector head, took the stand, underlining that “the goal set as regards revenues has not been met for a third consecutive month” and maintained that “revenues are plummeting as a result of a shrinking economy created by a failed economic policy.”

He called for the “adoption of development-boosting measures”, stressing that the government underestimates the intellect of the people when it states that the budget goals have been met and soon after it proceeds to announce new tax measures.

Responding to a question on debt restructuring scenarios, ND spokesman Yiannis Mihelakis stated that “the country’s economic situation calls for a measure of seriousness,” adding that “disaster scenarios do not help”.

On his part, Staikouras stressed that “fiscal adjustment is necessary but is being done the wrong way” reminding of an ND proposal that called for balanced budgets.