Greece expects to make primary budget surplus in 2013, meeting key bailout target

ATHENS, Greece – Greece’s finance ministry said Tuesday that it is on target to achieve a primary budget surplus in 2013, a key requirement set in the country’s bailout agreements.

Deputy Finance Minister Christos Staikouras said the overall government’s primary surplus — which does not count the cost of paying interest on existing debt — is expected to be 812 million euros ($1.1 billion).

The figure is important because Greece had promised its bailout creditors to achieve a primary surplus in the hope of qualifying for a debt relief deal this year.

“After many years, and with massive sacrifices made by Greek society, the country has achieved a primary surplus,” Staikouras said.

“This is a very important result that was achieved by meeting targets in revenues and exceeding them in terms of expenditures.”

More comprehensive Greek figures will be released in about one month, while the European Union’s statistics agency, Eurostat, will release its 2013 Greek budget data in April.

When counting the cost of paying interest on Greece’s huge amounts of debt, the government is still expected to be in deficit. The country has been relying on international rescue loans since 2010, when it lost access to bond markets as investors worried about its high debt.

Bailout inspectors from the EU, European Central Bank and International Monetary Fund are due back in Athens to review the country’s finances, but a date has not yet been set.

The left-wing main opposition party, Syriza, said the government had only managed to improve the budget after imposing drastic cuts in public health and welfare spending.

Efklidis Tsakalotos, head of financial affairs at the party, said the government has managed to find a primary surplus only by agreeing to huge austerity cuts.

“These measures pushed society to the limit, with tax hikes and spending cuts, mostly in welfare … a surplus achieved this way is unsustainable, ineffective, and socially unjust.”

Greece has promised to return to long-term debt markets this year, and on Tuesday raised 1.6 billion euros ($2.19 billion) in an auction if 13-week treasury bills.

The Public Debt Management Agency said the T-bills were sold at an interest rate of 3.75 per cent, down from 3.9 per cent at the last such auction last month.