Brussels confirms Greek surplus in latest EU public finances

25 Apr 17

The European Commission confirmed Greece’s target-busting primary surplus yesterday, putting it even higher than Greek official statistics.


Commission spokesperson Margaritis Schinas said that the budget surplus – excluding interest repayments – stood at 4.2% of GDP in 2016, Reuters reported.

That’s 0.3 percentage points higher than official figures published by the Greek statistics office last week, and more than eight times the 0.5% target required by creditors under the country’s third, €86bn bailout. Even in 2018, bailout terms only require a primary surplus of 2.5%.

“This confirms the trend which we at the commission have been reporting for a while,” said Schinas. He explained that bailout officials were returning to Athens to broker an agreement on the future terms of the bailout, which has been dogged by disagreement. Talks were expected to take several days.

Greek bonds rallied off the back of the news, with yields pushed down by rising prices by 60 basis points on two-year sovereign debt. However, Greek newspapers have noted the impressive surplus figures are belied by billions of euros in unpaid dues to suppliers and taxpayers entitled to rebates.

When interest payments are taken into account, the surplus is a more run-of-the-mill 0.7% of GDP – still an impressive feat for a country facing a deficit of over 13% of GDP just four years ago.

Greek debt also remains the highest in the European Union, at 179% of GDP in 2016 according to figures published by Eurostat yesterday.

The EU’s statistics office said both the EU-wide debt and deficit decreased last year compared to 2015.

The EU’s deficit fell by 0.7 percentage points, to 1.7% of GDP, and stood at 1.5% for the just eurozone, down from 2.1%. Government debt stood at 83.5% (down from 84.9%) and 89.2% (down from 90.3%) for the EU and eurozone respectively.

The highest surplus was reported in Luxembourg (1.6% of GDP), followed by Malta (1%), Sweden (0.9%), Germany (0.8%) and Greece (0.7%), while the lowest deficits were in Ireland (0.6%), Croatia (0.8%) and Denmark (0.9%). 

Just four member states had deficits equal or above 3% of GDP – the limit imposed by EU budget rules. These were Spain (4.5%), France (3.4%), Romania (3%) and the UK (3%).

The highest debts were seen in Greece (179%), Italy (132.6%), Portugal (130.4%), Cyprus (107.8%) and Belgium (105.9%). Overall, 16 member states’ debt surpassed the EU’s 60% of GDP limit.

The lowest debts were in Estonia (9.5%), Luxembourg (20%), the Czech Republic (37.2%), Romania (37.6%) and Denmark (37.8%). 

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