Mini-memorandum with new measures worth 6 billion until 2015

A mini-memorandum with cuts worth 6 billion in the public sector is being prepared by the government, which will probably mean new twists and “sacrifices” for salaried employees and vulnerable social groups.

The cabinet authorized Deputy Finance Minister Philippos Sachinidis to task KEPE with carrying out a spending review to determine the areas in which the cuts of billions in funds will take place, aiming to create surpluses for the state budget.

An overview of the general government expenditure of 2013-2014 is a government commitment within the Memorandum framework. Its aim is to efficiently allocate limited financial resources, which means that businesses will lose significant income, as well as those households which rely on financial help from the public sector.

After the cuts to be decided, the costs of the general government will have to be reduced by 3 billion per annum for 2013-2014.

Moreover, KEPE will also assess the substane of public expenditure, in order to rationalize it further in the 2015-2016 biennium.

It is an unusual Greek fiscal reality evaluation. The speding review is intended to identify waste, mismanagement and the ineffective use of limited state resources, and finally to demonstrate in the proposals to this or the next government which functions of state bodies are a lower priority and must be abolished, apparently along with the relevant positions and salaries.

This assessment will “enrich” the execution of the state budget and the Medium Term Financial Strategy Framework.

This assessment, however, has already begun for 2012. For the current fiscal year, the General Accounting Office, in cooperation with the Center for Planning and Financial Research (KEPE), is preparing the Medium Term Plan of 2013-2016.

The integration  will be completed by June, in three phases:
-1st progress report, March 30th 2012: recording and categorizing expenses and initial conclusions
-2nd progress report, May 15th 2012: draft proposals
-Complete review, June 30th 2012: completing and delivering a study and conclusions

The project teams which have been set up are preparing their collaboration with the relevant departments of all ministries and the agencies supervised by those ministries, which will intensify in the coming weeks, as their research escalates and probes deeper into the analysis of costs.