Primary surplus’s heavy price


Greece ended 2017 with a revenue shortfall of 719 million euros that was covered by the failure to implement budgeted investments of 1.57 billion euros, leading to a primary surplus of 1.94 billion euros. At the same time Greek taxpayers piled up more arrears to the state, with December witnessing an increase in the creation of new debts.

The definitive data of the budget’s execution last year, issued on Wednesday by the Finance Ministry, showed that the primary surplus was far above the target, exceeding it by some 877 million euros.

Public Investments Program spending was 800 million euros below target, depriving the economy of much-needed cash just as it is trying to recover. The shortfall was particularly evident on the program’s European Union co-funded side, which missed the target by 1.127 billion euros, while the national part of the program showed a 327-million-euro increase in investment. It is therefore no surprise that the economy is now seen to have grown by an even smaller rate than the revised estimate included in the 2018 budget.

The 1.941-billion-euro primary surplus, if confirmed by Eurostat in April, will be added to the so-called cash buffer to be created ahead of the conclusion of the bailout program.

The non-execution of public investments co-funded by the EU also had an impact on budget revenues, as inflows from Brussels were 1.213 billion euros short of the target.

December saw the addition of another 1.2 billion euros to taxpayers’ debts to the state, taking last year’s sum to 10.87 billion, from 9.6 billion at end-November, Giorgos Pitsilis, the head of the Independent Authority for Public Revenue, said on Wednesday during a speech in Paris. That compares with 13.38 billion euros created in 2015 and 12.16 billion in 2016, he added.

Tax rebates amounted to 6.05 billion in 2017, from 4.29 billion in 2016, while incentives for the voluntary revelation of undeclared incomes resulted in 146,000 taxpayers coming forward, leading to additional taxes of 757 million euros imposed on them last year.