BUSINESS

Primary surplus soars to 2.6 bln

Course of budget gives leverage to gov’t to negotiate an easing of debt and austerity measures By Sotiris Nikas

The general government budget showed a primary surplus of 2.6 billion euros in the first seven months of the year, while state arrears to the private sector have begun to gradually decline, dropping to 6.6 billion euros, Alternate Finance Minister Christos Staikouras announced on Monday.

The data compiled by the State General Accounting Office showed a major increase in the general government budget primary surplus from 325 million euros in the first seven months of 2012. A large part of the increase was due to the incorporation of revenues from the yields of Greek bonds held by the central banks of eurozone countries and returned to Greece, amounting to 1.5 billion euros. Yet Staikouras stressed that even without that the surplus would have been a significant 1.1 billion euros.

There was also an increase in state revenues to the tune of more than 3.5 billion euros year-on-year, as in the year to July they amounted to 62.3 billion euros from 58.75 billion in 2012. Spending also edged up, from 58.4 billion last year to 59.65 billion euros.

Expired debts to state suppliers decreased by 540 million euros at end-July from a month earlier, when they had amounted to almost 7.2 billion euros. At the start of the year state arrears had stood at 8.8 billion euros, which means they have declined by a quarter within seven months.

The data on the course of the budget “confirm that, step by step, the target of securing a primary surplus from this year is becoming ever closer,” Staikouras stated, adding that “when this is completed at year-end it will give the country some negotiating power, which will activate the [creditors’] commitments to lightening the Greek debt.”

The minister did not rule out a lightening of the load on taxpayers as well, noting that securing a primary surplus “will offer a degree of liberty toward enriching the economic policy mix and toward an orderly exit from the strict austerity while distributing a social dividend.”

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