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The Government Began to Pay the Seven Billion Obligations of Hospitals to Suppliers

16 June 2010 / 09:06:59  GRReporter
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The suppliers of medicines and the government finally have come to mutual agreement on the amount and manner of repayment of the amounts due for the medicines used by the public hospitals in the past five years. The companies accepted the final terms of the government after two weeks of negotiations and the first installment of the obligations will amount to 245 million Euros. It must pay the debts left over from 2005 and 2006. The Minister of Finance George Papakonstantinou said in official statement to journalists that the government, as a sign of goodwill, has decided to pay another 100 million Euros in cash to the suppliers’ accounts opened in 2007 and 2008. The Minister said that the 100 millions will be paid in cash as many companies face an acute need for cash due to delays of payments in the previous years. He explained that around 200,000 Euros from the 100 million Euros will be allocated to each of the suppliers.

The rest of the obligations will be paid in the form of interest-free government bonds that can be sold to Greek banks after maturity. Bonds worth 1.1 billion Euros with a repayment period of one year will be available to repay the debts from 2007. The 2008 obligations will be paid with two-year government bonds amounting to 2.2 billion Euros, and the unpaid bills of 2.05 billion Euros from the last year will be covered by three-year government bonds.  

The total government debts to suppliers of medicines amount to the fantastic sum of seven billion euros. After PASOK came to power in the last year autumn it has formed a controlling commission to examine the type and size of the deficit in health insurance. Two months later the commission announced its decision that almost 40% of the contracts for supply of medicines are illegal and the Government stated that these obligations will not be paid. This led to a severe reaction from the suppliers and in mid-May they decided to stop the supply of hospitals with medicines. After a series of mutual attacks and threats, both sides decided to sit at the negotiating table and reach a common solution.

The government stepped back and announced that it will pay all scheduled obligations, even the declared illegal, and suppliers have accepted the proposal the majority of the deficit to be covered by gilt-edged securities rather than cash.

Tags: EconomyMarketsDetsSupply of medicines
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