Recession+Taxes+Unemployment+Interest=3.5bn "black hole"

More and more, the “black hole” in the budget increases. The elements of the state budget show that despite measures and the hike, the deviation from the objectives of containing the deficit is increasing rather than decreasing in the 11 months of 2011 and is now reaching 3.5 bn!

Even before the ink is dry on the new 2012 budget, the assumptions for 2011 are off. By far, the data, the excess expenditure is fast approaching 1.5bn as spending is increased by 6.2% instead of 3.8% which is the budget’s goal. 1.9bn are missing from public revenue as of December 7.5 bn (instead of 5.5bn last year) must be collected, in order to achieve the “lowered” goal to increase 0.9% for 2010.

Within December, the state must collect 10.2bn in order to meet its revenue-raising target of 54bn set for this year’s Memorandum. As it all points, if the situation is not heeded, the revenue this year will not overtake 51.3 bn and expenditures at 69.5bn. Thus, the deficit this year will reach 21.7bn and will exceed it in absolute numbers, that of 2010 which was 21.45bn.

At the same time costs have escaped and rose by 3.1% over the last 11 months, against a target reduction of 3%. Now in December they should not surpass 6.5 billion, but this seems impossible because the pension funds 'draw' more and more funds to help pay pensions.

Where does the money go?

The cost of the regular budget is increased by 3,657 million. million or 3.0% over 2010. The increase was primarily due to:

- The increased interest expense by 2.638 billion or 20.4% over the same period in 2010,

- The increase in primary spending by 3.0% or 1.339 billion euros compared with the corresponding period of 2010 due to increased costs for insurance, healthcare and unemployment benefits of OAED

Main beneficiaries of the increased grants were:

- Insurance Funds at 1.611 billion (mainly IKA in 1, 583 billion, the OAEE by 100 million Euro and NAT in 42 mn. Euro  due to lower revenue from insurance contributions.

- Hospitals in 1.059 billion to pay for health supplies in the year 2011 (also given 89 million Euros for the payment of debts from previous years' fees).

In fact, the constant and deep recession constantly feeds deficit  by reducing revenues and increasing costs. For this reason, Evangelos Venizelos insisted yesterday that "there is not enough ability to pay, the tax collection mechanism is not sufficient, there should be a willingness to comply by the citizens, there must be economic object, there must be an economic activity and the market must be able move. And this is the great difficulty, this is the truth before which we stand and that truth has been discussed with the Prime Minister, who responded to a relevant question in Brussels”

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