Just as Greece seemed to be heading toward getting back on its feet financially, the country’s primary deficit grew in the wake of an attempt to regain credibility and pay back bills – a target that fell far short of its goal. The State General Accounting Office had approved repayment of 4.6 billion euros ($5.97 billion) in arrearages to vendors and Greeks awaiting tax refunds, but only 3.4 billion euros ($4.42 billion) was disbursed.
Alternate Finance Minister Christos Staikouras stated that the government’s target is for the state “to respond to its obligations and at the same time strengthen the cash flow in the real economy,” but didn’t explain how that could happen without increasing the deficit while repaying unpaid debts.
While paying bills has helped Greece reverse its image of stiffing customers and suppliers for years, it meant that the primary deficit of the general government in the year’s first five months amounted to 829 million euros ($1.077 billion,) from 335 million euros ($435.48 million) at the end of April.
Meanwhile the data that Staikouras forwarded to Parliament showed that at end-May the central government debt amounted to 317.8 billion euros, ($413.12 million) out of which some 205 billion euros ($266.49 million) concerned the debt from the country’s bailout program.
Greece has been notorious for not paying its bills, letting them stack to the ceiling while continuing to spend wildly, one of the reasons for the country’s crushing economic crisis. Payees have included pharmacists awaiting long-delayed reimbursements for giving out prescriptions, drug companies, suppliers to hospitals and other public entities.
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