While the Greek state is pressing on debtors to repay their dues, state debts to the private sector take up to four years to be repaid, thus creating a liquidity problem in the market.
Businesses wait from one to four years to receive the value added tax return. At the same time, the average payback period of the State’s debts to individuals in 2015 came to 115 days, while in 2014 the average waiting period was 49 days.
According to General Accounting Office (GAO) data, state arrears to private suppliers and service providers until April amounted to 6.69 billion euros, of which:
2.8 billion euros are debts to social security funds, of which 1.6 billion are to the National Health Organization (EOPYY).
1.18 billion euros are unpaid tax returns to businesses and individuals.
1.1 billion euros are hospital debts.
665 million euros are debts of ministries and supervised agencies.
519 million euros from debts of state supervised legal entities.
326 million euros are debts of local authorities.
Compared to March 2016, state debts are about the same (6.67 billion euros). Compared to April 2015, state debts rose by 1.86 billion euros.
However, European Commission estimates are far more ominous, speaking of 9.2 billion euros in debts to suppliers and individuals in June.
The average waiting time for a VAT refund in 28 of the 113 Tax Offices across the country ranges from one to more than four years. Although the VAT return time has improved significantly compared to previous years, the average waiting time is estimated to be 239 days.
Figures in the European Payment Report 2016 show that the payback period of the State’s debts to individuals has more than doubled compared to 2015, averaging 115 days compared to 49 days last year.
The arrears to the private sector create huge problems in a market that is left practically without liquidity. The President of the Hellenic Confederation of Commerce and Entrepreneurship Vasilis Korkidis said characteristically: “Unfortunately, the effects are readily visible in the real economy, as they tighten the noose around the neck on thousands of businesses that are unable to meet their ever-increasing obligations.”
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