State uses primary surplus to start paying off market debts

The long-awaited primary surplus is now returning to the market, as the state has finally started paying off its debts to suppliers and taxpayers, according to data released on Monday by the General State Accounting Office.

The figures show that the general government primary surplus dropped from 1.6 billion euros at the end of February to just 967.5 million euros at end-March, as the state’s arrears to third parties were reduced by about 300 million euros within a month, dropping from 8.2 billion to 7.9 billion euros.

Furthermore, unpaid tax returns were reduced to 244.5 million euros at the end of the first quarter of the year, from 662.9 million at end-February. The amount that should be returned includes 161.1 million euros in direct taxes and 69 million in indirect taxes.

As a result, total internal obligations dropped to 8.15 billion euros last month from 8.86 billion in February, a decline of over 700 million euros, which is greater than the 635-million-euro drop in the primary surplus from February to March.

Alternate Finance Minister Christos Staikouras commented yesterday that “the cash figures of the general government for March are offering quantitative indications that show the satisfactory course of the country’s public finances in the first quarter of 2013. This clearly reflects the positive results of the repayment process for expired debts that started in December 2012.”

In fact the data show that while the government budget showed a primary deficit of 763.9 million euros in Q1, that was offset by surpluses at state corporations (139.8 million euros), local authorities (494.7 million euros) and social security funds and hospitals (1 billion euros).

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