The government has now entered a course of pre-election handouts, as the primary budget surplus of 2018 that the European Union’s statistics office announced on Tuesday exceeded expectations, depriving the economy of the momentum for growth that it badly needs while facilitating the ruling party’s election planning.
Eurostat data showed Greek state revenues exceeded spending (not including interest payments) by 4.4 percent of gross domestic product, while the slightly different calculation Greece’s creditors use puts the primary surplus at 4.29 percent. Given that the target is 3.5 percent of GDP, the overrun of 0.8 percent of GDP amounts to some 1.5 billion euros.
Deputy Finance Minister Katerina Papanatsiou revealed the government’s intentions on Tuesday, telling state TV channel ERT3, “We are no longer in a program [where we have] to wait till the end of the year, as we did in the past, to hand out what has been left where we want to.”
She pointed to ideas such as the value-added tax rate drop and the reduction of the lowest income tax rate.