Primary surplus gives gov’t leeway
Revenues to exceed spending by 950 mln euros, allowing for the use of 70 pct of that for social policies
The government presented data yesterday on the 2013 budget which showed a primary surplus of at least 691 million euros, a figure that may well rise up to 950 million when anticipated revenues are cashed in. This would allow the government to have a package of some 700 million euros to spend on benefits ahead of the European elections in May.
The final figure, Finance Ministry officials say, will exceed the 812 million euros the 2014 budget had factored in for 2013, and compares with a primary deficit of 2.3 billion euros anticipated in the 2013 budget drafted in November 2012.
The figures presented by Alternate Finance Minister Christos Staikouras showed that net budget revenues beat the target by 1.5 billion euros, amounting to 52.9 billion, largely thanks to the return to Athens of the Eurosystem earnings from Greek bonds. Expenditure also beat its target by 1.5 billion euros, amounting to 52.2 billion against a forecast 53.7 billion. That was mostly due to cuts in primary spending of about 600 million euros as well as to the Public Investments Program, of 200 million.
According to the government’s pledge to return 70 percent of the final primary surplus – now expected at 950 million euros – to society, just under 700 million euros will be used for the so-called social policy, and the plans for that are already in place. Senior ministry officials have strongly emphasized that the prime minister’s pledge to that effect remains valid, with the bulk of the surplus going to those who have suffered the most as a result of the financial crisis. They add that this policy will be implemented once Eurostat has confirmed the final amount of the primary surplus, which is expected on April 23 – i.e. one month ahead of Eu- ropean and local elections.
This will allow the government to proceed to certain targeted interventions that just before the end of the bailout program will signal the country’s gradual emancipation from the tight financial control of the last few years.
Still, the country’s creditors would rather see that 700 million being used as a safety cushion to secure the achievement of the agreed primary surpluses of 2014, 2015 and 2016.