Throwing cold water on Greece’s expectations of having a primary surplus by the end of the year – not including interest, some military expenditures, social security, municipal budgets and the cost of running state enterprises, which otherwise would show a big deficit, Greece’s international lenders are looking over the books to see how accurate the figures are.
High-ranking Finance Ministry sources said that while the representatives of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) agree that Greece will produce a primary surplus at the end of the year, they think it will be minimal. The Troika is also skeptical about Greek projections for a primary surplus of 1.5 percent of GDP at the end of next year. Virtually all previous optimistic projections have been wrong.
It was reported that the Troika is downplaying expectations because it might raise hopes that crushing austerity measures could be alleviated and that Greece will also try to impose losses on its public lenders the same way it did to private investors in 2011, stiffing them with 74 percent in setbacks in their holdings of bonds.
With regard to the 2014 budget, the Troika still has doubts about the effectiveness, in terms of revenue raising, of the unified property tax. Next year will be the first time the levy, which combines several property taxes into one, is applied.
Troika officials are paying particular attention to the state of Greece’s tax administration, which will be key to whether the government can hit its revenue targets. If Greece fails, more austerity measures are likely although Prime Minister Antonis Samaras said he would refuse to impose any more after more than three years of pay cuts, tax hikes, slashed pensions and the coming firing of scores of thousands of workers.
Greece’s Finance Ministry also informed the Troika that the government would not meet its target of paying off this year all of the 8 billion euros in arrears that it had amassed although it is far behind schedule and holding back payments so the economic figures can look better.
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