Greece beats 2012 deficit targets

According to an official announcement issued on January 10 by the Ministry of Finance, Greece has beaten budget and primary deficit targets for 2012.
stournaras123The data indicate a state budget deficit of €15.908 billion, compared to a target of €16.312 billion deficit. The report on government budget execution also showed a primary deficit of €3,684 billion, as opposed to a target of €4.577 billion.
Compared to the previous year, the budget deficit fell by €6.866 billion, while the primary deficit is also lower by €2.742 billion, with the state budget balance shrinking by 30.1% compared to 2011.This was due to drastic expenditure cutbacks, which counterbalanced a shortfall in revenues attributed to the reduced inflow of funds from the EU toward the Public Investment Programme.
State budget spending was €355 million lower compared to the target fixed in the national budget.
In a related development, Haris Theoharis head of Finance ministry’s General Secretariat of Information Systems was also appointed to the post of permanent a General Secretary for state revenues, it was announced on January 9.
Ministry of Finance: Announcement on 2012 Budget Execution (in Greek) & Report on 12-month Budget Execution (in Greek); Greek News Agenda: Primary Budget Record Surplus
(GREEK NEWS AGENDA)

Government announced austerity plan

» PM: “Sacrifices will Bear Fruits”

The government announced yesterday an additional set of measures bound to slash the double-digit public deficit.
Speaking yesterday at a Cabinet meeting, Prime Minister Papandreou said that the emphasis is now shifting to what the European Union will do. 
The new measures aim at bringing into public coffers some €4.8 billion, amount which corresponds to 2% of the country’s GDP.  

» Pay Cuts

In particular, the new measures include a 30% pay cut of public sector’s supplements allocated annually, and a 12% across the board cut of public servants’ benefits. Moreover, subsidies to public entities and their social security funds will be reduced by 10%.
Any additional remuneration in the public sector will be trimmed by 50%, and compensation for overtime work will shrink by 30%.

Executive bonuses in the public sector will be abolished and the Public Investment Budget will be curtailed by 5% (€500 million). As of 2011, the ratio for public sector hirings will be one for every five retirees.

» Taxation

VAT is expected to rise at all cases by an average 1% to 2% and an extra levy on fuel, cigarettes, liqueur and luxury products will be imposed.
A one-off tax of 1% on personal incomes above €100.000 will also be introduced, together with a 15% rise in taxation of offshore companies’ real estate property.
Kathimerini daily: Further Cuts and Tax Hikes Announced
(GREEK NEWS AGENDA)

Greece: Absorption of Structural Funds

(GREEK NEWS AGENDA)  Greece’s absorption of structural funds from 3rd Community Support Framework (CSF) in 2000-2006 stands at 91%, European Commissioner for regional policy Danuta Hubner announced on Wednesday.  The Commissioner clarified that Greece applied for payments reaching €20.9 billion of the €23 billion available. Presenting absorption figures for the 3rd CSF for all member-states, Hubner said that the Community average also stood at 91%. She expressed hope that the total available funds will have been absorbed by June 30, when the deadline for completing projects using Community funding expires. Greece’s absorption of money available in the structural funds and the EU Cohesion Fund comes to 88%, marginally above the EU average of 87%. Absorption of money exclusively derived from the Cohesion Fund by Greece is 61%, four percentage points below the EU average of 65%.  Ministry of Economy and Finance: Management Organisation Unit of CSF; Secretariat General of Information: About Brand Greece, CSF (2000-2006)