Greek govt unveils pre-emptive budget 'cutter' to avoid spending overruns

The move is apparently an "in house" attempt by Greek authorities to stave off the activation of a creditors'-enforced automatic spending cuts mechanism that would generate infinitely more negative attention, domestically and amid creditors.

The decision for the internal spending cuts mechanism was signed off by Alternate Finance Minister Giorgos Houliarakis.

The measure foresees that budget spending in 2017 for ministries and state-funded entities will be disbursed through "regulated flows", whereas funding reaching only 90 percent of the prescribed total in specific line-by-line budget obligations will be made available, meaning that the remaining 10-percent will be withheld.

In other words, the finance ministry will apply a 10-percent pre-emptive "cut" in elastic 2017 state spending, in a bid to prevent spending divergences or a failure to meet projected revenue targets.

Exceptions include payroll spending, bond and debt repayments, a heating oil subsidy, funds set aside for public sector investment, payments towards utilities (power, telecoms etc) as well as arrears owed to the private sector.