Greece: Cash-starved state posts surplus

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http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_25/06/2015_551526

Cash-starved state posts surplus
By Sotiris Nikas & Prokopis Hatzinikolaou
Thursday June 25, 2015

The Greek economy is at its worst point since entering the bailout process over five years ago, as reflected in the data on the execution of the state budget. The result for the first five months may show a surplus, but this is misleading.

The shortfall in tax revenues in the year to end-May exceeded 1.7 billion euros, while, apart from salaries and pensions, the state is not paying its obligations within the country, as expenditure was 2.6 billion euros less than that provided for in the budget.

Had the government not decided to freeze all payments in a bid to secure cash for the timely payment of salaries and pensions, the primary budget balance would have shown a deficit of 1 billion euros, against the 1.5-billion-euro primary surplus it showed in the January-May period, according to the official data.

However, the cash reserves have now run dry, as according to sources there will not even be enough for the payment of salaries and pensions at the end of June unless the social security funds and local authorities contribute their own reserves.