The Greek government’s overdue debts to citizens and businesses jumped to €3.9 billion in August, highlighting a persistent structural issue in public financial management, despite the state running a budget surplus.
According to the latest figures from the Government Accounting Office, total state arrears to suppliers, hospitals, and taxpayers reached €3.882 billion in August, up from €3.541 billion in July – an increase of €341 million in just 30 days. Public hospitals continue to dominate the arrears list, with liabilities reaching €1.627 billion, up €129 million from July, marking the highest levels since spring. The National Organization for Healthcare Provision (EOPYY) alone owes €305 million, while social security institutions collectively have arrears of €651 million.
Even with the operation of the National Central Health Procurement Authority, repayment times for suppliers continue to stretch, reflecting ongoing inefficiencies. Since 2019, hospital debts have more than quadrupled – rising from €344 million to €1.62 billion, demonstrating a systemic delay in public financial flows.
Pending Tax Refunds Add Pressure
Pending tax refunds also contributed significantly to the rise in arrears, increasing by €196 million in a single month to reach €928 million. Of this amount, €431 million relate to direct taxes and €392 million to indirect taxes, while €288 million are considered overdue for more than 90 days. These delayed payments affect both businesses and citizens, straining liquidity in the private sector and limiting cash flow in the wider economy.
Structural Management Issues Behind Rising Arrears
The government acknowledges that the persistent increase in overdue debts is a “structural management problem,” arising from lengthy approval procedures, bureaucratic delays, and cash retention strategies aimed at preserving budget reserves. Officials argue that a gradual reduction is expected by year-end, as rebate and clawback mechanisms are completed and repayment processes are accelerated via the General Accounting Office.
Impact on the Real Economy
The accumulation of arrears has tangible effects on the Greek economy. Businesses providing goods and services to the state face liquidity constraints, healthcare providers transfer costs to patients, and consumers experience delays in tax refunds. Moreover, rising arrears threaten to undermine government efforts to comply with upcoming European fiscal surveillance rules from 2026.
Debt Growth Remains Steep
From December 2024 to August 2025, public sector arrears rose from €2.3 billion to €3.9 billion, an increase of 27.4% in eight months. Without immediate action to improve cash flow management in hospitals, social security funds, and other public entities, the state risks continuing to accumulate liabilities, intensifying financial pressure on an economy already in need of liquidity.
Breakdown of Public Arrears (August 2025)
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Hospitals: €1.627 billion (+€129 million)
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Social Security Institutions: €651 million
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Local Authorities: €251 million
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Other Legal Entities: €227 million
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State Budget Liabilities: €198 million
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Pending Tax Refunds: €928 million
This record rise in arrears highlights the critical need for structural reform and stricter oversight of public financial management, as delays in state payments continue to ripple across the economy, affecting both businesses and citizens.
Source: pagenews.gr