Friday, April 17, 2015

Big improvement in the Greek primary budget

by Silvia Merler


April 17, 2015

Ahead of what promises to be a very tense negotiation period, the Greek Ministry of Finance released the preliminary budget execution data for the first three months of 2015. The State primary budget is reported to considerably exceed expectations, due to both expenditures below target and revenues picking up.

The coming month promises to be very tense for Greece, as negotiations seem to proceed slowly and payment deadlines are approaching fast. The Eurogroup is due to meet next week, on April 24th, to discuss the Greek reform list that will be the basis for the final programme review and that must be agreed by the end of April, according to the terms of the 20th February agreement. Agreeing on a reform list is paramount for Greece to be able to unlock some of the frozen funding of the programme and relief the cash issues.

However, EU policymakers sound increasingly skeptical about the possibility that a deal can be reached on the 24th. Germany’s Finance Minister Schauble reportedly said “nobody expects there will be a solution” next week, while EC Vice President Dombrovskis also ruled out an agreement and said the meeting is most likely going to be just an assessment of the progress in talks with Greece. If no agreement is reached on 24th April, then the discussion would shift to the Eurogroup on May 11th, just ahead of a 750 million repayment due to the IMF the 12th May (see here for the detailed repayment schedule).


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