Selective default for... a couple of days!

We spoke of selective default lasting for a few days but as it seems, we are faced with a few days’ default in tax offices!

Today’s memo (No. 0006289) from Secretary of the Finance Ministry, Yiannis Kapeleris, to all the heads of the public tax agencies states:

“All payments made by departments of which you are in charge (expenses, payroll, tax refunds etc) that are scheduled for July 28th and 29th must be made after August 1st, 2011”.

Is it an accounting trick to ameliorate July’s fiscal picture in view of the Troika tests, seeing as the “black hole” created in the first half has cost the yearly budget4.5 billion euros?

Or is there really a problem with liquidity in tax offices, especially since the memo instructs postponing payments for after August 1st instead of on the day?

Obviously, the Deputy Head of the Economic Responsibility Sector of the New Democracy party, MP of Cyclades Mr. Yiannis Vroutsis, also needs answers, since he spoke of an “unprecedented directive” which is surprising and raises reasonable questions.

“Essentially, this is one of the many accounting ‘alchemies’ that the government, wishing to present a different picture of both public revenue and expenditure of July, has deployed".

"This act is unprecedented. It leaves the government’s economy team exposed, upon which we call for answers”, states the ND MP.