in additional revenue measures within the next two weeks.
It reflects the government’s failure to raise revenues, restrain spending and unravel the imbroglio of previous deficits, as it is nearly double that troika estimated two months ago (€1.74b).
Government officials are concerned that when troika representatives arrive in Athens for a new review, they may find the amount of €3b insufficient to cover revenue shortfall, expenditure overruns and the revision of 2010 deficit.
Finance Ministry is announcing details regarding the budget execution in the first quarter of 2011. Provisional data show that there is a shortage of €1.4b in revenues, spending overrun and restraining of deficit by investment funds.
Tax revenues were aimed to increase by 8.6%, but decreased by 8.1%, reaffirming that such measures do not deliver as the recession is much greater than the government estimates.
Expenditure increased by €150m despite the discontinuance of payment for fees, contractors and operators.
A temporary solution was provided by the Public Investment Program, which helped the government raise €600m and decrease costs by €1b.
Sources note that situation in April is not expected to differentiate significantly. Treasury sources reveal that a further deterioration regarding expenditure is possible, since some payments have been delayed for too long.
They express their concerns that troika will ask for more additional measures when its representatives arrive in Athens in May.
The review of Greek program will be determined also by final revision of 2010 deficit, which is expected to be announced by Eurostat on April 26. Sources note that the deficit may reach 10.5% of GDP compared with the target of 9.4%, which implies a gap of €2.5b.
Officials referred that some of the measures, which were announced in government’s €26b fiscal program, were decided to pass into the Memorandum of Understanding.
The fight against tax evasion and spending is considered no longer a reliable source of reducing deficit, while the focus now is on the implementation of single payroll.
The decisions regarding social benefits, higher VAT rates and equation of tax on heating oil are still pending.
source: capital
