Greek Public Sector Debts Surge, Exposing Growing Arrears

Public sector debts to private entities have once again increased in Greece, reaching 3.2 billion euros in July 2024, up from 2.8 billion in Dec. last year, which marks a whopping rise of nearly 400 million euros in over seven months.

This significant surge, which includes overdue tax refunds, contradicts the government’s agreement with international institutions to eliminate such arrears.

What is more, such practices contradict European directives, with the commission having referred Greece to the European Court of Justice over delayed payments by public hospitals to suppliers, for breaching its directives and hampering business competitiveness, particularly for small and medium-sized enterprises (SMEs) in the healthcare sector.

Looking at the latest data of the public sector debts that the Ministry of Finance has released, it is evident that ministries and public entities owe private individuals 2.6 billion euros, with outstanding tax refunds amounting to 605 million euros. As a result, the total public sector debt has amounted to 3.2 billion euros.

By comparison, the country’s debt at the end of 2023, stood at 2.8 billion euros, highlighting a significant increase in just seven months.

More specifically, breaking down the public sector debts, hospitals owe suppliers 1.182 billion euros, municipalities have arrears of 298 million euros, and social security organizations are behind by 619 million euros.

In addition, more than 600 million euros in tax refunds are still pending, with 173 million euros unclaimed as the Independent Authority for Public Revenue (AADE) continues its efforts to locate taxpayers eligible for refunds.