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Payment halt produces surplus
Budget figures back in the black for first time this year after state spending is slashed
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By Prokopis Hatzinikolaou
The budget figures for August released on Tuesday showed a primary surplus for the first time this year -- of 1.7 billion euros -- owing to the state halting payments to the third parties. The total primary deficit for the year therefore declined from 3 billion euros to 1.29 billion last month. According to the provisional data published by the Finance Ministry, the state budget balance, including the payment of interest, was also positive in August, but by just 850 million euros. The reduction of the deficit from the start of the year to 12.36 billion euros from 13.2 billion in the year to July is attributed to cuts in state payments, the slashing of the Public Investment Program, as well as a significant increase in net budget revenues last month by 24.2 percent, thanks to the payment of income tax. Compared with the first eight months of 2011, the state budget deficit has been reduced by a considerable 33.8 percent, while the primary deficit is 78 percent smaller. In the January-August period, state budget expenditure was 2.68 billion euros lower than the target of 45.51 billion euros. Much of the savings came from the Public Investment Program. Despite the major increase in revenues last month, the budget is still lagging the revenue target by over 2 billion euros for this period: It amounted to 33 billion euros, which was 2.08 billion less than planned. The revenues from the Public Investment Program in particular came to 2.4 billion euros against a target of 3 billion. The 576-million-euro lag is attributed to delays in inflows from European Union funds. For the year to August, primary expenditure fell to 30.76 billion euros, which was 2.39 billion euros better than the target. Primary spending has been reduced by 2.3 billion euros, a 7.2 percent improvement on the eight-month target which illustrates the extent of the freeze of payments by the state to third parties and to its suppliers. Net spending on interest amounted to 11.069 billion euros -- 57 million euros higher than the original target of 11.012 billion. | 
