State overdue debts reach €3.55 billion

The Greek state’s overdue obligations to private parties declined in June, according to figures published by the General Accounting Office. Debts owed by General Government bodies fell to €2.762 billion, from €3 billion in May. These amounts concern supplier invoices, services and goods that have already been delivered to the state but not settled within the prescribed deadlines, straining the cash flow of businesses and self-employed professionals.

The picture changes when pending tax refunds are added to the total: these rose to €788 million from €718 million the previous month. As a result, the total amount owed by the state stands at €3.55 billion. The opposite direction of the two figures is telling: the decline in unpaid invoices is accompanied by a build-up of tax refund requests, mainly involving businesses that have already paid amounts and are awaiting reimbursement.

Broken down by entity, hospitals show the largest liabilities, at €1.3 billion, down from €1.51 billion in May. Social security funds owe €715 million, of which €248 million corresponds to EOPYY, the national health provider. Local government bodies record debts of €333 million, and public-law legal entities €248 million. At the same time, pending applications for main pensions remain close to nineteen thousand.

The issue of overdue debts has been systematically monitored for years, as it serves as an indicator of both fiscal discipline and the operational adequacy of public bodies. The largest concentration of debt in the health sector reflects the constant pressure on procuring medicines and supplies, while pension delays are linked to the process of cross-checking insurance records. Monthly fluctuations are common and depend on the pace at which funds are released to public bodies.

The effects are immediate for those who do business with the state. Hospital suppliers, municipal contractors and service providers effectively finance the state with their own capital or bank loans, a cost that is passed on to prices. For citizens, delays in tax refunds and pension awards translate into months of waiting without income or liquidity, affecting family planning and the overall picture of the economy.

Business associations consistently call for faster settlement and automation of payment procedures, in order to reduce the time between invoice issuance and payment. On the administration’s side, the roughly €168 million decline compared with May is presented as a sign of improvement. No target has been announced for the level of debts by the end of the year, nor a detailed timetable for reducing the backlog of pending pension applications.

The coming period will show whether the downward trend holds, as months with higher spending and seasonal payments can reverse the picture. The figures are published monthly and allow comparison by entity, while the trajectory of tax refunds will show whether June’s increase was temporary. Upcoming data are expected to also capture the effect of summer on the liquidity of General Government bodies.