Thursday 19 May 2016 12:57 pm

Grexit threat fades as Greece records multi-billion euro surplus

Greece recorded a budget surplus of €2.4bn (£1.8bn) in the first four months of 2016, in the latest sign that the country's bailout programme is on track.

The surplus in Greece's central government primary budget smashed its own target of around €500m off the back of lower spending by the Syriza-led administration. 

Spending was more than €2bn below target while tax revenues also impressed, coming in at €14.1bn between January and April, two per cent higher than forecasts.


The figures do not include debt servicing costs and are slightly different from those monitored by the Eurozone and the International Monetary Fund (IMF) as part of Greece's €86bn bailout package.

Greece: State of the nation

  2016
GDP growth minus 0.3 per cent
Unemployment rate 24.7 per cent
Inflation rate minus 0.3 per cent
Gross public debt 182.8 per cent of GDP

Source: European Commission, May 2016

As part of the deal, Greece is required to run a 3.5 per cent budget surplus by 2018, though there is wrangling among the troika – the IMF, the Eurozone and the European Central Bank (ECB) – over whether such a target is too harsh.

The IMF has advocated a loosening of the terms agreed during last summer's bailout saga, which saw Greek prime minister Alexis Tsipras hold a referendum on an early draft of the deal.

Read more: Christine Lagarde tells Greece she's here to stay

The Fund wants Greece to be given repayment holidays and a stretching of the loan maturities which could result in Greece paying back debt until 2080.

The Eurozone, however, would like a harder line both to show other members, such as Spain and Portugal, that budget rules cannot be disregarded without punishments.

Read more: Grexit or Brexit – Which is more likely?


Domestic politics also largely prevents discussion of more drastic measures such as debt write-offs, though different kinds of debt relief could be on the cards.

The Greek parliament recently passed a series of controversial reforms to the country's tax and pension system which paved the way to unlock the latest tranche of bailout money. Discussions are scheduled to continue at a meeting of Eurozone finance ministers in Brussels next week.

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