2016 is expected to witness an increase in Greek state spending, at both the general government and at the budget level, despite a wave of direct and indirect tax hikes proposed by the government in order to achieve a first review of the Greek program (third bailout) with institutional creditors.
2016 is expected to witness an increase in Greek state spending, at both the general government and at the budget level, despite a wave of direct and indirect tax hikes proposed by the government in order to achieve a first review of the Greek program (third bailout) with institutional creditors.
Given that the budget for 2016 already included a provision for a 450 million-euro increase in spending, compared to 2015, the Greek side in the most recent negotiations with creditors at first considered the prospect of slashing 500 million euros from defense spending. Recent reports put the decrease at no more than 100 million euros, however.
At present, overall spending is calculated to increase by 600 to 700 million euros for 2016, with the full weight of meeting creditors’ demands to close budget gaps falling on increased revenues – mostly from income tax, fuel tax and property tax hikes. The leftist government’s preferred “defense” against primary pension cuts, meanwhile, appears to be an increase in social security contributions by wage earners and their employers.