Gov’t sure of primary surplus by year-end

Greece’s state budget registered a primary surplus of 2.7 billion euros in the January-November 2013 period, Alternate Finance Minister Christos Staikouras announced on Thursday.

He added that this means the general government budget’s primary surplus will exceed 800 million euros at the end of the year as calculated by the bailout agreement. Greece’s creditors are now in agreement with that forecast, Staikouras noted.

However, Finance Ministry officials admit that despite the budget’s better-than-expected course, the program applied has failed in three domains: combating unemployment, containing poverty and limiting social inequalities.

On the issue of the value-added tax on food services, which the government is determined to keep at 13 percent, a ministry official stated yesterday that the representatives of the country’s creditors are examining the data the government has submitted. Regarding the Special Consumption Tax on fuel and the possibility of reducing the tax on heating oil, the same official said the measure is “under evaluation.”

The provisional data issued by the State General Accounting Office on the execution of the budget in the first 11 months of the year showed that revenues exceeded expenditure (not including interest payments) by 2.7 billion euros, or 1.2 billion excluding the profits from Greek bonds that eurozone central banks have returned to Greece. This compares with a target for a primary deficit of 1.6 billion euros.

“After several years, the country will this year achieve a primary surplus earlier than expected,” said Staikouras, adding that this is “a surplus which in structural terms is the highest in Europe.”

Senior ministry officials noted yesterday that social security funds’ finances will not derail the budget as they have received some 300 million euros from the reserve fund that still has between 50 and 100 million euros in case of any emergencies this month.

Net budget revenues amounted to 42.7 billion euros, down 0.4 percent from the same period last year. Tax revenues reached 39.5 billion euros, while tax rebates reached 2.47 billion, very close to the target of 2.49 billion.

Primary expenditure amounted to 39.3 billion euros, down 7.3 percent from the same period last year and 1.3 percent below the target. Spending in the Public Investment Program reached 3.95 billion euros, which was 255 million less than the revised target, although Staikouras said this figure will catch up with the target in the last month of the year, as was the case last year too.

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