Greece's Tax Revenues Plummet Amid Crisis

There is no end to the bad news for Greece as the country’s treasury has revealed an aggravating 8.5% year-on-year fall in tax revenues in the first six months of 2015, accompanying a 12.3% fall in public spending in the same period.

These figures grimly reflect the woeful condition of the heavily indebted country’s economy.

Greece’s treasury didn’t wait for a less unfortunate time to deliver crushing news – the country’s tax revenues slumped by almost nine percent in the first half of 2015 versus the first six months of 2014.

The government’s initial reluctance to adopt austerity measures didn’t prevent a 12.3% drop in public spending in the same period. Given that Prime Minister Alexis Tsipras was eventually compelled to adopt the austerity recommendations of  his creditors in order to secure a new bailout, government spending is slated to fall even further.

Meanwhile, Greece is due to make a €3.2bn repayment to the European Central Bank on 20 August, and authorities continue to discuss a proposed €86bn third bailout.

According to Tsipras, talks with the four creditors — ECB, the International Monetary Fund, the European commission and Europe’s bailout fund, the European stability mechanism, — are reaching their last lap.

However, a lot depends on whether the prime minister will be able to compel his radical Syriza party to back new reforms at a social conference, scheduled for next month.

The IMF has already stressed that it is essential for Greece to sign up for a new economic reform program, otherwise no new funds can be committed. It is also necessary that the eurozone countries make a concerted effort to help the country out with its massive debt burden.

“There is going to be a discussion during the summer and autumn and then the board will make a decision during the autumn,” Sweden’s representative on the 24-member IMF board, Thomas Östros, told the Swedish daily Dagens Nyheter, adding “They have an inefficient public sector, corruption is a relatively big problem and the pension system is more expensive than [that of] other countries.”

At least the Greek stock markets saw the light at the end of the tunnel as it bounced back after three days of decline; the Athens index closed 3.65% higher. Also, although the rate of unemployment is still extremely high, it has at least fallen to its lowest level in three years.