ATHENS: The halt in government payments to suppliers and state entities combined with the crumbling of public revenues make up an explosive mix that has a direct impact both on the markets and the negotiations with the country’s creditors. According to data released on Thursday by the State General Accounting Office, state expenditure contracted by €2.6 billion in the first five months of the year, as the state was unable to fulfill its obligations.
The statement published yesterday stressed that “the reduced level of state budget spending is mainly due to the adjustment of the cash planning based on the current restrictive liquidity conditions.”
At the same time, the net revenues of the budget posted a 964-million-euro shortfall, meaning that the payments halt created a primary surplus amounting to 1.5 billion euros, against a target for 556 million euros. In the January-May period last year the primary budget surplus had amounted to 707 million euros.
