Greek Government Arrears Piling Up

An increase of nearly 70 million euros was recorded in the government’s arrears to individuals in June, with debts amounting to 5,134 billion, from 5,067 billion in May.

According to State General Accounting Office figures, 3,579 billion account for overdue debts and 1,225 billion for outstanding tax refunds.

Following the June Eurogroup agreement, the Greek government is obligated to repay 2 billion euros by October, with 1.6 billion coming from a loan from the ESM and 400 million from national funds.

The reduction of government arrears is a prerequisite for disbursing the second support tranche (800 million) of the Greek support programme in the autumn.

Analysts say that the government has chosen not to pay up in an attempt to increase its primary surplus figures, thus exacerbating enterprises’ already big problems.

In a particularly tough period for the Greek economy, with company shutdowns increasing every year and private consumption shrinking, the government is reluctant to fulfil its obligations, they point out.