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Varoufakis explains the causes of Greece’s budget explosion

25 March 2015 / 18:03:15  GRReporter
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A detailed message published by the Ministry of Finance presents the final data on budget implementation in February 2015, establishing deficits in all items as follows:

  • The deficit in the balance of the state budget amounted to 194 million euro compared to the surplus of 487 million euro in the same period of 2014 and the projected deficit of 70 million euro.
  • The primary balance reported a surplus of 1.238 billion euro compared to the primary surplus of 2.063 billion euro in the same period of 2014 and the target for a primary surplus of 1.411 billion euro.
  • The amount of net revenue to the state budget was 7.79 million euro, which is 967 million euro or 11.0% less compared to the target.
  • Net income in the regular budget amounted to 7.293 billion euro, which is 1.173 billion euro or 13.9% less compared to the target.
  • The total amount of tax revenues was 6.536 billion euro, 972 million euro or 13.0% less than planned.

What caused the delay

According to the Ministry of Finance, the delay in the revenue side was due to the following factors:

1. Direct taxes that amounted to 2.751 billion euro in January-February 2015, failing to meet the targets with 643 million euro or 19.0%. In particular, a delay in the implementation is reported for the following targets:

   a) income tax on individuals - 221 million euro or 17.2% less than planned

   b) property taxes - 78 million euro or 10.3% less than planned

   c) direct taxes from previous years - 349 million euro or 46.8% less than planned.

2. Indirect taxes amounting to 3.784 million euro which is 329 million euro or 8.0% less than planned:

   a) VAT revenues:

i. Those from petroleum products were 57 million euro or 16.7% less than projected

ii. Those from other commodities were 220 million euro or 10.0% less than projected

iii. Those from tobacco exceeded the targets by 24 million euro or 36.9%.

   b) Revenue from consumption taxes:

i. Revenue from the special consumption tax on energy products exceeded the targets by 12 million euro or 1.8%

ii. Revenue from other consumption taxes was 58 million euro or 13.8% less than projected.

iii. Toll revenues exceeded the targets by 32 million euro.

   c) Revenues from indirect taxes from previous years were 48 million euro or 21.2% less.

Other non-tax revenues exceeded the targets by 143 million euro or 18.0%.

In the category of one-off revenues, the revenue from closed special accounts was 115 million euro or 70.2% less than planned whereas the revenue from the programme to increase liquidity, due to the financial crisis, exceeded the target by 42 million euro.

Reduced state budget expenditure

Return of income amounted to 608 million euro, marking an increase of 145 million euro compared to the target (463 million euro).

Revenues in the public investment budget amounted to 496 million euro, exceeding the target by 206 million euro.

State budget expenditures amounted to 7.984 million euro, which is 843 million euro less than projected (8.827 euro).

In particular, regular budget expenditures amounted to 7.746 million euro or 731 million less than the target, mainly due to cuts in primary expenditure by 591 million euro and in the cost of armament programmes by 70 million euro.

Regular budget expenditure decreased by 623 million euro or 7.5% compared to the same period of 2014 despite the fact that 29 million euro more were paid in connection with the elections and 27 million euro more for agricultural subsidies.

Costs in the public investment budget amounted to 238 million euro which is 112 million euro less than planned (350 million euro) and 369 million euro less than the same period last year.

Tags: Ministry of FinanceBudget ImplementationDeficitSurplus
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