Picture - To Vima newspaper
Within August, the Greek government will announce new taxes with which to additionally strip the thin pockets of ordinary citizens. This became clear from Deputy Finance Minister Christos Staikouras's regulation, according to which employees of the department have to begin work on drafting the budget for 2013, as well as the main budget lines by 2016. The regulation reports a decrease in state revenues for the first half of 2012 amounting to 1 billion, which is explained by the inability of households to pay huge tax liabilities.
The same document also admits the administration's incapability to deal with tax evasion. According to the Programme for Financial Stability, signed between Greece and its creditors, in 2013 the government should have raised 924 million euro from disclosed income tax offences, but actually only 131 million euro can be expected. These figures are confirmed by a secret document of the Chamber of Accounts, which "leaked out" in the media at the end of the week, and the source of the leak was indicted. It claims that representatives of the supervisory Troika have rejected the Government's arguments that it is impossible to reveal so many cases of tax offences in such a short time and they insist that by 2016 the country must raise 3.8 billion euro from unpaid taxes.
In the regulation Christos Staikouras insists on a detailed analysis of the statement of revenue, especially for the period 2012-2013, and particularly of the ratio between the revenue sources and how they will be affected by macroeconomic data such as GDP growth, inflation, unemployment. Experts' forecast is also required regarding the expected results of all previously voted tax reforms as well as of the ones which will probably be included in the new budget until its presentation in Parliament.
In August, the empty Greek treasury will have to pay 3.2 billion euro bonds, which expire on the 20th and are owned by the European Central Bank. These bonds were not included in February's PSI, because the European Central Bank was then treated as an institutional rather than a private creditor. Greece officially asked the eurozone for a bridge loan for the payment of this obligation, but its request was flatly and unanimously rejected by member countries.
After that Athens asked for a two-month extension to pay the amount, but Frankfurt rejected this request as well. The reason - the extension would be interpreted negatively by both financial analysts and world media, which in this case would announce that Greece is in factual bankruptcy. So the only solution remaining is the issuance of short-term bills, but if up to now Greece has been issuing 4 billion short-term bills monthly, in August it will issue 6 billion.
Of course, these bills are not bought by anyone else but the European Central Bank, which grants the corresponding amount to the Bank of Greece, which in turn distributes it among Greek banks, which then buy the issued bills. That is why in the programme for financial stability it is also written that Greece has to gradually limit the issuance of these bills and at the end of 2012 Greek banks should have bills of not more than 8 billion euro, and in March 2013, this amount has to fall to 6 billion.
Currently Greek banks have bills worth 14.5 billion euro, to which will be added also the value of those to be issued in August. This is one of the reasons why the credit rating agency Moody's confirmed its negative forecasts about the Greek banking system. The other reasons are - the deepening recession, which is expected to continue in 2013, the increased risk of sovereign default and the fragile confidence of investors who keep withdrawing their investments abroad. Moody's predicts that in 2012 and 2013 the Greek banks will operate at a loss after the damage caused by the PSI.
With the short-term bonds and the capital from the Fund for financial stability, which has 3 billion euro, 1 billion of which has already been spent though, the Greek state will have to cover its needs for August and, highly likely, for September, too. Until then, the Government of Antonis Samaras is hoping to have completed one more mission of the Troika, and that its assessment is positive and for the eurozone to have given a green light for the payment of the next tranche. Until this tranche is paid, the Greek treasury will be at a critical level, as admitted by Deputy Finance Minister Christos Staikouras and the country will still be threatened by the danger of a "sudden death". The government is still unable to pay salaries and pensions, because it has stopped or is paying with a great delay the obligations to the private sector.