Greek public debt rises to exceed €357 billion

Greek public debt has increased significantly compared to last year and amid the global price crunch and high inflation, putting the total debt level at 193% of the GDP, leading to concerns that the country could be heading towards a financial crash.

In Greece, inflation for June was 11.6%, up from 10.5% recorded in May 2022, one of the highest rates in the euro area. Meanwhile, according to data from the Greek Statistical Service (ELSTAT), public debt increased by €13.417 billion between Q1 2021 and Q2 2022.

Meanwhile, general government revenues amounted to €18.982 billion compared to €16.340 billion last year. Taxes on income and property were €2.947 billion from €2.743 billion in Q1 2021.

Social contributions were €6.558 billion (34.5% of total revenues) compared to €6.066 billion (37.1% of total revenues) last year.

But this is unlikely to be enough to plug the gap.

Stefan Legge, an economics lecturer at the University of St.Gallen in Switzerland, said the country, along with Italy, which is in a similar situation, could be heading for trouble due to high public debt levels.

“The fear is back that Italy or Greece or some other countries will not be able to afford higher levels of interest and could eventually go bankrupt,” Legge said.

At the start of July, Fitch Ratings gave Greece a positive BB outlook but cautioned that the debt ratio by 2024 is still forecast to be among the highest rated and more than three times other BB countries.

Soaring food, energy, and fuel costs have led to significant criticisms of the government and whispers of a snap election in the autumn. Prime Minister Kyriakos Mitsotakis, elected in 2019, said that this would not happen as his priority remains to enact a raft of reforms.

“I’m not looking at opinion polls for a clearing to call elections. We have a government with a strong majority, and it’s my obligation to secure the country’s stability,” he told Skai radio.