Greece’s national debt is almost 390 billion or 190% of GDP

The Greek economy is on the verge of collapse. The current situation is much worse than the crisis in 2009-2010, which was used as an excuse to destroy the country’s fiscal sovereignty.

During this period, the public debt in absolute terms increased by 20%, as a percentage of GDP – by 80% (from 126% it is now close to 190%), and the worst is yet to come. Looming on the horizon is a financial collapse that calls into question the very existence and continuity of the Greek state.

In particular, the country’s public debt reaches the amount of 400 billion euros. State guarantees to enterprises, individuals and banks are also a huge problem, the amount of which is approaching 30 billion euros.

According to official data from the Ministry of Finance, the country’s total public debt at the end of May last year jumped to the amount of 397 billion euros, an increase of 8.5 billion euros compared to December 2021 and 13.5 billion compared to last year at the same time.

The cause of debt inflation is the excessive lending that the Public Debt Management Organization resorts to to cover the government budget deficit.

The rising trajectory of debt, combined with the uncertainty it is causing in the economy, is a resounding “signal” as the cost of borrowing is rising and could rise even more in the coming months.

The 10-year bond rate has already jumped to 4.2% from 1.04% in May 2021, while a similar increase was recorded for all Greek bond maturities.

In addition to the direct public debt of the central office, there is also a “hidden” debt. These are state guarantees provided by the state to public and private companies, individuals and banks. According to the State Accounting Department, the amount of state guarantees at the end of March last year amounted to 28.67 billion euros.

This amount is not included in the public debt. It records confiscations of guarantees, that is, amounts not repaid on time by an institution or individual to whom a state guarantee was provided. In fact, it is a potential debt. Of the total amount of 28.86 billion euros, 18.56 billion euros account for guarantees provided to banks under the Hercules program.

Total government debt

It should be noted that the specific figures refer to gross government or central government debt, which is different from general government debt, which is a metric for monitoring state performance. According to the Eurostat definition, the following are deducted from the total gross debt:

  • Government bonds held by insurance funds, PTAs and other public bodies form what is known as domestic debt, which, according to the Ministry of Finance, will amount to 20 billion euros this year.
  • Coins and investments in government bonds of legal entities, the amount of which this year will amount to 16.2 billion euros.
  • In total, approximately 36.2 billion euros are deducted from the total debt.
  • Excluding domestic debt, total public debt at the end of March was 358.35 billion euros.

At the same time, it should be noted that interest payments are paid on all debt, not just general government debt.

Revenue for the 1st quarter of 2022

  • State Treasury revenues amounted to 18.982 billion euros against 16.340 billion euros last year.
  • Income and property taxes amounted to €2.947 billion (15.5% of total revenue) compared to €2.743 billion (16.8% of total revenue) in the first quarter of 2021.
  • Social contributions amounted to 6.558 billion euros against 6.066 billion euros (37.1% of total income) last year.

Expenses for 1 quarter 2022

  • General government spending totaled 21.907 billion euros, up from 23.405 billion euros in the first quarter of last year.
  • Primary spending was €20.924 billion (95.5% of total spending), from €22.316 billion (95.3% of total spending).
  • The salaries of civil servants amounted to 5.495 billion euros (25.1% of total expenses), from 5.426 billion euros (23.2% of total expenses).
  • Social benefits amounted to 9.926 billion euros (45.3% of total expenditures) against 9.880 billion euros (42.2% of total expenditures).
  • Subsidies amounted to €531 million (2.4% of total spending) compared to €1.676 billion (7.2% of total spending) in the first quarter of 2021.

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