Ministers claim Greek budget now in surplus

GREECE’S finance ministry claimed yesterday that the government has managed a €2.92bn (£2.47bn) surplus in the first eight months of 2013, suggesting the country may even beat targets set by international lenders.

The ministry’s preliminary estimates indicate that the Greek spending reduction programme may be having some belated successes, after repeatedly underperforming. At the same time last year, the government recorded a deficit of €1.4bn.

Deputy finance minister Christos Staikouras commented: “The target to reach a surplus at the end of the year becomes more and more feasible.”

The unplanned surplus seems to have been reached by lower public investment and fewer tax refunds than had been previously scheduled. The finance ministry’s estimate includes tax revenues and typical spending, but does not account for debt interest payments.

A budget surplus is one of the conditions set by the Greek government before it can return to issuing bonds.

Despite the strong signal from the government that deficit reduction is progressing well, the country is still mired in recession.

Figures released on Monday showed that the Greek economy is still suffering from deflation, and that industrial production has continued to fall.

Greece also has the highest rate of unemployment in the Eurozone, with 27.6 per cent of adults out of work and looking in May.

Among under-25s, the rate is even more eye-watering, as nearly two thirds of young people are jobless.

European finance ministers have recently been engaged in public debate over a potential third bailout for Greece’s government finances.

Eurogroup president Jeroen Dijsselbloem has suggested that the country’s troika of lenders will make a decision on the additional programme of aid by November.