Greece beats a key bailout target but faces hard choices
Friday, April 21, 2017
Greece has beaten a key bailout target for its public finances, but will still face some painful choices as it tries to negotiate with creditors how much more budget austerity it should impose on its people in coming years.
Greece's independent statistics agency said today that the country has posted a high primary budget surplus _ that is, excluding debt servicing costs _ of 3.9 percent of gross domestic product in 2016.
The surplus figure could provide some relief for the country's left wing government as it struggles to overcome a disagreement with bailout lenders on unfreezing its rescue loans. The country would need new loans by July, when it faces a spike in its debt repayments.
The primary surplus target set by lenders had been 0.5 percent of GDP.
Finance Minister Euclid Tsakalotos is in Washington attending an annual meeting of the International Monetary Fund, and will hold at meetings with bailout lenders to try and end the impasse and reach an agreement in the next month.
Greek primary surplus figures _ a measure of how much the country is spending within its means _ are closely watched by lenders who want Athens to tighten fiscal controls after the current bailout program ends next year.
"The primary surplus figure is indeed impressive since it is well above the target of 2016,'' said Argyris Papastathis, a financial commentator at Greece's top selling weekly Protothema newspaper.
"The weak point for the government is that the surplus largely relies on over-taxation. That hurts the real economy and carries a political cost in terms of public sentiment.''-AP