Wednesday, January 28, 2015

Greece's Primary Surplus of 4,5% of GDP!

Per the end of November 2014, Greece reported a year-to-date primary surplus of 3,6 BEUR. After closing the books for 2014, Greece reported a primary surplus of 1,5 BEUR for the entire year.

Now, I have tortured my ageing brain; I have used my calculator; I have used Excel. Whichever way I slice it,  my result says that, if the primary surplus for 11 months was 3,6 BEUR and for 12 months 1,5 BEUR, there must have been a primary deficit of 2,1 BEUR in the 12th month. Is there anything wrong with my math?

We have heard that Greeks started not making tax payments in December in anticipation of tax cuts by the new government. If that is the primary reason for the December deficit, then one has to expect that the January result will be equally bad. If not worse because in January it was already quite clear that SYRIZA would be the new government.

For 2015, Greece - before SYRIZA (BS) - had budgeted a primary surplus of 3,3 BEUR. That seems to be a bit less than what 2014 would have been had taxes continued to flow in December. So, at best, a stabilized primary surplus was budgeted. In 2014, the most difficult quarter was the first quarter when March produced a primary deficit of about 1 BEUR. Presumably, this year's March would be similar.

It is hard to imagine that Greece currently runs a primary surplus when tax payers continue to be on strike. Furthermore, the emergency measures which SYRIZA is implementing with incredible speed will add expenses which had not been included in the original 2015 budget. What does that tell us?

It tells me two things: first, it tells me that, as has often been discussed, the Greek banks might run out of money if there is an accelerated deposit flight. And, secondly, it tells me that the government itself might run out of money only for its regular operations, not to even mention the extraordinary maturities of bonds which start coming up in March.

The longer the Troika negotiations last, the tighter the situation for SYRIZA will get. Do you suppose the Troika knows that?


  1. Not just that. But i imagine, that the "memorandum" budget of Samaras for 2015, most likely, contains also influx from pending privatizations (a bid for OLP was supposed to be in March i think and the deal for 14 airports was almost done). These now have been cancelled.

    So, where will the money come from! 36% of the voters may not be crazy Mr. Kastner, but they may be wrong! Just like 44% was wrong about George Papandreou. Greek voters always liked populism.

    Let's see how Obama passes from words to cash...

  2. Out of fashion, but, remembering the "fallen". Message to Samaras from former french president, Valery Giscard D' Estaing:

    "Dear PM,
    I would like to express my sincere sympathy, in the monent that you live the negative side of democracy. I would like to salute the boldness and persistent effort with which you worked both inside and outside Greece, to safeguard the european chcaracter of Greece",adding that it is one of the reason for which he sends him his warm congratulations.

    Samaras should now step down and keep this gracious message as his moral reward.

  3. According to Mrs Valavani, deputee finance minister, in her interview to italian newspaper, she can also use the funds for the recapitalization of the greek banks that remained unused, to finance SYRIZA's program. She is an economist.

    1. I have heard this before but I just can't see how this would be so easy. I don't think the ESM left those funds at the free disposal of Greece. Probably some sort of escrow. But if SYRIZA did in fact 'misuse' those without consent, then this would be equivalent of a declaration of war.

    2. Mr. Kastner,

      In fact, she can't use them without consent of ESM. That's why i said she is an economist.

  4. "It tells me two things: first, it tells me that, as has often been discussed, the Greek banks might run out of money if there is an accelerated deposit flight."

    After today's crash and burn in the stockmarket, in 8 o'clock news they are already reporting that Tsipras is under pressure of the greek bankers now. Not happy...

  5. Businessmen warn Tsipras of new wave of lay offs in the private sector, if he raises minimum salaries to 751 euros.

    Can they do that?!

  6. yes all good points and added above good points. But i must say they have a specific program and i am sure they know of the loss of revenue. within their specific program i am sure they have a plan which covers your above questions. they have not wasted any time to take immediate actions in all aspects.

    like i have said in the past, they are in plan and they have a timeline. fo me why is it so obvious that a deal is already been made and from a long time ago?

    lets just say and take for an example that the debt restructing is concluded asap and the payments to be made are relaxed and reduced isn't this automatically a surplus?

    i have never seen a governemnt in my life take such quick action and likewise there is tons of positive energy and backing which all leads to good things. people say i am a romantic but like i said if they need to fck a few for the better well being so be it. even if it includes mid to rich.

    i think greek love to have the conspiracy therory in their pocket and see the cup half empty.

    yes OLP should have been sold and i am for it. AT AnonymousJanuary 28, 2015 at 4:32 PM, did you see how cheap they would have sold it? 30 million a year towards x years. i comes to 2,2 mill euro a month. for the biggest 1st deep water port in EU. Thank god they stopped the sale. 2,2mill euro is not even a few hours revenue for a container port. STOP COMPLAINING. New dmocracy was fire selling everything. Get a back bone. SYRIZA wants cosco just a much. they want a better deal. so simple.

    stop listen to the main stream media. study good sources on internet. learn what it means to negotiate and have some cards in you hand when you go to the poker game. with no cards the only thing you can do is pull your pants down and ask to PLEASE use vaseline.


  7. Chinese ministry of commerce: "We express our deep concern for the cancelling of the privatization. We intend to ask from the goverment to protect the interests of chinese companies in Greece, amongst them, Cosco".

    1. Well, it seems that Greece will become the last Soviet state, not counting North Korea of course.

  8. Don't blame the poor Mrs. Valavani, economy is not a science, it is a religion.