Thursday, April 24, 2014

The New Game in Town --- Calculate Greece's Primary Surplus!

As a former banker, credible and understandable figures are everything to me. As a result, I was very much looking forward to Eurostat's announcement about Greece's primary surplus which they made on April 23. Alas, I am as smart as I was before. Great brains are now dissecting Eurostat's figures. When great brains do not agree on credible and understandable figures, it may mean that the figures are not credible and understandable. Below are three analyses:

Greek 2013 primary surplus confirmed at 1,5 BEUR by Eurostat, by MacroPolis
Greek statistics are back: primary deficit presented as suplus, with Eurostat's seal of approval, by Yanis Varoufakis
More Greek statistics? Troika confirms primary surplus, WSJ

To me, Varoufakis' analysis sounds convincing but who am I to judge Greek financial figures?


  1. ...You may as well have a look at the question posed by WSJ to Mr. O' Connor, regarding the 'scientific' approach on determining the surplus...


    The budget is not healthy. Probably i have mistakes but this is partly an interpretation?
    I posted twice to and never see my post.
    There are huge mistakes?


    1. I had addressed the querschuesse article in this post:

  3. Yes, exactly. They do not make posts of non-Germans?

    About my docs then, are full of mistakes to your judgement?


  4. A common "mistake" that analysts of all kinds do to support their thesis on Greece, is, that they try to isolate Greece as always the "one case apart". Professors Varoufakis is also known for his political affiliations.

    When it was only Greece to audit its numbers, it was "the greek statistics" made up by the cunning and cheating greeks and the innocent Eurostat and friends. Now that Greece can't move a finger without being permitted by the troika and its papers are being audited all the time by IMF, Eurostat, Blackrock etc, it's again "greek statistics".

    Maybe a look at nearby Italy, though, would help explain, that, this is something "within Eurostat's rules."

    The Italian goverment owes 71 bn euros to the italian firms. It has been delaying payments for years. Why? Because, according to Eurostat, this is fine and helps appear the italian debt and deficit better. In particular, since the crisis hit Italy, all goverments , including the one of the virtuous and highly praised Mario Monti, stopped paying the firms. This is how 71 bn was built. This was necessary, so that the italian deficit would appear below the 3% threshold and allow Italy to come out of the "special supervision" procedure of the EU.

    Have a nice read:

    In other words, this is a closet, that Eurostat doesn't want to open for anyone. But it is intellectually dishonest, to claim that Greece's surplus is not existant, just because Eurostat's rules aren't the ones that ideally should be.

    Kind regards.

  5. Just for the history, there is also the goverment side of the story, that nobody cares to ever consider.

    ANA/MPA---Greece's primary surplus totalled 3.4 billion euros in 2013 (excluding the financial support offered to banks), Alternate Finance Minister Christos Staikouras said on Wednesday.
    The primary surplus figure was based on Eurostat's methodology, while the troika estimates this figure at 1.5 billion euros.

    Of course it's never true, because it's the goverment. Staikouras, in past days, implied the opposite of what opposition party sympathizers say. That had they been troika-free, they would have calculated the deficit the way other countries do according to ESA and that would give 3,4 bn surplus. But the troika is more stringent on the expenditures they include in general goverment spending and this forced the 1.5 bn figure.

    You can laugh at it, but there are two sides in the story.