While Greece is locked in tense negotiations with its international lenders over a looming budget gap of as much as 2.9 billion euros, Deputy Finance Minister Christos Staikouras said he still expects the country will record a primary surplus of about 345 millions euros ($463 million) this year because of revenues brought in by tax increases, even though they are still less than was expected.
That would exclude interest on debt, the cost of social security, state enterprises, city and town budgets and some military cuts which otherwise would show a big deficit. Still, achieving a primary surplus means Greece could try to seek a debt cut on the $325 billion it owes the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and hit them with losses the same way it did with private investors in 2011, stiffing them with a 74 percent hit.
The surplus is a miniscule amount compared to the staggering debt of about $430 billion as even the two bailouts from the Troika haven’t put a dent in how much Greece owes, leading many analysts to believe it is unsustainable despite what the government says.
The January-October balance stood at 1.1 billion euros ($1.48 billion), Staikouras said, after traditionally weak tax revenues came in 250 million euros ($335.8 million) above target, at 35.59 billion euros ($47.8 billion) for the 10-month period. But the heart of that was bolstered by income from a record tourism year and the bump is already eroding.
“It seems that the country will meet its national target. Of course, this is due to the enormous sacrifices made by Greeks, unprecedented in post-war Europe,” Staikouras said.
Unemployment in Greece is nearing 28 percent, amid rapidly increasing poverty due to years of austerity measures imposed in exchange for the bailout program, with many Greeks suffering big pay cuts, tax hikes and slashed pensions although the rich and tax cheats have largely escaped sacrifice or cost.
Finance Minister Yannis Stournaras has been talking with Troika envoys over the budget gap for 2014 and how to close it at the same time he said it’s only a fifth of what the lenders projected. He also wants to lift a ban on mortgage foreclosures that was put in place to protect people who couldn’t pay because of austerity.
The major opposition party Coalition of the Radical Left (SYRIZA) said the discussions were a fraud. “These negotiations with the Europeans are a charade. The (government) is in fact reciting its loyalty to its lenders,” a party statement said. “Its goal was and remains the resolute implementation of bailout commitments with no consideration for the social cost.”
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