Holes in public investments and revenues


Cuts to public investments and social programs secured the government a 2017 primary surplus overrun that was even higher than that projected as recently as November. That overrun was then used to boost the government’s image through handouts such as the social dividend.

According to the provisional figures for the whole of 2017, released midnight on Monday, the primary surplus came to 1.967 billion euros, against a target included in the 2018 budget for 877 million euros, an overrun of 1.09 billion.

Budget spending amounted to 55.515 billion euros, compared to a target included in this year’s budget for 57.265 billion. Public Investments Program expenditure came to just 5.95 billion euros, compared to a projected 6.75 billion that the 2018 budget had said would have been fully invested. A few days after the budget was voted through Parliament, Alternate Economy Minister Alexis Haritsis said there would be a shortfall of 500 million euros in the program’s spending, although that figure eventually turned out to be 800 million.

The government had promised the country’s creditors that it would hold on to any primary surplus overrun – apart from the social dividend handout – as a cash reserve ahead of the definitive results of the 2017 financial year in April 2018.

Net revenues were 868 million euros below target. The revenues of the Public Investments Program were 978 million short and takings from privatizations were off by 247 million, while regular budget revenues came in 110 million euros above target.

Commenting on the course of the investments program, former New Democracy ministers Christos Staikouras and Dora Bakoyannis noted that, given the shortfall in the program’s spending in 2016 too, “the government has deprived the real  economy of 1.3 billion euros within two years, in order to produce a needlessly high as well as harmful primary surplus.” They added that there are no prospects for growth without investments, public or private.