Primary surplus puts troika talks in new context
Provisional data point to a record primary surplus in 2013, which, if proven correct, will mean there will be no need for new austerity measures this year. Sources say that the technical team representing Greece’s creditors, which arrived in Athens on Tuesday, has the sole objective of establishing whether the data that the Finance Ministry has submitted about the 2013 budget execution is correct.
The stakes are high as, according to an official involved in the talks, the early data show a primary surplus that “may exceed 1.5 billion euros.” The same official said that if the troika of European Commission, European Central Bank and International Monetary Fund representatives confirm that revenues exceeded expenditure by over 1.5 billion through measures of a permanent character, then “it will be very difficult for them to ask for new ‘tough’ measures” – i.e. salary and pension cuts and new taxes.
If that proves true, it will offset to a great degree the pressure that the government has been under from the troika, as well as from within the country, for a long time. So far Greece’s creditor representatives have not withdrawn the possibility of new measures for this year from the negotiating table, with the IMF going so far during meetings as to imply that the interventions should concern pension cuts.
Confirmation of a high primary surplus for 2013 will also have an immediate impact on the 2014 budget: If the surplus exceeds 1.5 billion it will cover most of this year’s fiscal gap, estimated at between 1 and 1.5 billion euros. Greece had proposed a number of other measures to that end – though no “tough” ones – the majority of which the troika has already rejected.
A considerable primary surplus in 2013 based on permanent measures will further create a positive momentum for Greece ahead of its return to the international money markets, which the government intends to see before the European elections.
Officials at the Finance Ministry are maintaining a wait-and-see stance for now and avoiding any predictions, although the course of state revenues in the first month of 2014 has been satisfactory and within targets, while projections for February show revenues will easily beat their monthly target.
