Public sector debt at €2.66 billion as new obligations mount

The Ministry of Finance wants to boost flagging mergers and acquisitions activity by extending tax breaks to smaller companies; it would also reward those that do not shed part of their workforce. [INTIME]

Pending lump-sum pension payments, along with state budget and local government obligations, have contributed to an increase in state arrears. 

Although the total fell slightly in November to €2.66 billion, down from €2.82 billion in October, it remained higher than November 2023’s €2.34 billion.

Data released by the Ministry of National Economy and Finance showed that overdue obligations from public entities rose to €263 million in November, up €85 million from €178 million a year earlier. 

The bulk of this debt is attributed to the Auxiliary Pension and Lump-Sum Fund (ETEAEP), which officials believe will decrease once the Labor Ministry’s payment plan is fully implemented.

State budget arrears climbed to €225 million in November from €100 million the previous year, local government debt rose to €321 million, up from €168 million in November 2023, and social security organizations’ obligations increased to €632 million, compared to €528 million a year earlier.

Hospitals remain the largest source of overdue debt at €1.22 billion, down from €1.37 billion in November 2023. While this €140 million reduction is modest, the ministry credits the National Central Health Procurement Authority (EKAPY) with halting the previous upward trend.

Approximately €900 million of hospital debt relates to clawback adjustments, leaving a net debt of €300 million. Officials clarified that liquidity is not an issue, as all entities maintain sufficient cash reserves.

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