ECONOMY

Modest primary surplus target

After reaching an agreement on the expected contraction of the economy for this year (4 percent), the government and its creditors are now close to concurring on the forecast for the budget’s primary deficit for 2013 at 400-500 million euros or 0.2 percent of gross domestic product.

Finance Ministry officials said on Wednesday that this result was achieved without the retroactive slashing of the budget’s credit to state bodies, and taking into account that tax rebates will amount to 2.9 billion euros and the Public Investment Program’s expenditure will reach 6.65 billion euros.

Eurostat is expected to announce a far bigger primary surplus for 2013, between 2.5 and 3 billion euros, but this will also include revenues that the government and its creditors have agreed not to include when calculating the performance of the economy. They incorporate the privileged shares of banks and the profits of the Eurosystem from the Greek bonds it acquired before and during the crisis.

The representatives of the European Central Bank, the European Commission and the International Monetary Fund – known as the troika – further asked the ministry to prepare a list of measures that could apply for the 2015-16 period, although as yet no pressure is being applied for them to be passed into law. After all it was just yesterday that discussions started on the 2014 budget, which forms the basis for negotiations on the fiscal gap for the following two years. However the troika insists on having a list to work on for the much more intensive round of negotiations from mid-October.

Kathimerini has seen the Finance Ministry’s revised draft for the new Single Property Tax from 2014 that will be put to the troika for approval. This is less taxing on properties than the original plan, having 25 brackets instead of 20 and a reduction in the rates for medium-sized and smaller properties, including plots of land. However the draft does not mention anything about the target for taxes to be collected.