SYRIZA Says Greece Posts Huge Primary Surplus, IMF Not Buying It

FILE -Greek PM Alexis Tsipras leads government’s Cabinet, April 13, Athens. Photo: Eurokinissi/ Tatiana Bollari.

ATHENS – Greece’s ruling Radical Left SYRIZA said the country posted a 2016 primary surplus seven times higher than predicted but the International Monetary Fund said it can’t be sustained.

The surplus doesn’t include interest on 326 billion euros ($349.42 billion) in three bailouts, the cost of running cities and towns and state enterprises, social security or some military expenditures which otherwise would show a deficit.

The Hellenic Statistical Authority is set on April 21 to unveil data on last year’s primary surplus, which Eurostat is expected to validate on April 24, the financial news agency Bloomberg said.

The surplus will be close to 4 percent of Gross Domestic Product, according to a finance ministry official who asked not to be identified in line with policy. The bailout target was for a primary surplus of 0.5 percent of GDP but it’s also been obtained by slowing or ceasing paying vendors, creditors and others owed money by the government so a bigger cash pot can be created.

The IMF, which took part in two first rescue packages of 240 billion euros ($257.24 billion) but has stayed out of a third for 86 billion euros ($92.18 billion) until more austerity is imposed, said at least half the surplus came from one-off measures rather than structural changes that will continue delivering results in the years to come, according to a person familiar with its analysis as the government used a common accounting trick to show the economy is better than it really is.

Greece’s level of primary surplus is key in determining the kind of debt relief it will need. The more such surplus it has, the less debt relief will be needed. Whether or not Greece should get such relief is a source of contention between the country’s euro-area creditors and the IMF.

Tsipras chaired a meeting of top ministers on April 19, ahead of the IMF’s spring meetings in Washington, D.C. on April 21-22.

The government is expected to be represented in Washington by Finance Minister Euclid Tsakalotos, Alternate FinMin Giorgos Chouliarakis and Economy Dimitri Papadimitriou.

According to reports out of the Greek capital this week, the Tsipras government aims to keep a “low-profile” in Washington, avoiding any hint of tabling new demands or publicly airing disagreements.

Sources told the business newspaper Naftemporiki that the goal is to avoid providing any pretense for further delays in negotiations to finally conclude the second review of the Greek program.

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