Greece ’s primary budget surplus was revised downwards to 0.3 pct of GDP in 2014, from a budget target for a surplus of 1.5 pct of GDP, according to the government’s Economic Policy Program (EPP), a Greek finance ministry report said on Monday.
The report noted that this estimate, based on the EPP (used since the country remained in a support mechanism) did not take into account three factors: a retrospective reduction of interest rate for loans received from the European Union, the transfer of profits made by Greek state bond portfolios from central banks in the Eurosystem (ANFAs and SMPs) and the impact of supporting financial institutions in the country.
The finance ministry said that revenue from the transfer of profits made by Greek state bond portfolios by other Eurosystem central banks (SMPs) will total 10 billion euros by 2025. These revenues were exclusively used to cover the country’s funding gap. Financial support offered to Greek banks has an impact on the general government’s result, however, this impact is reflected on assets (shares) currently owned by the Greek state, which will be sold contributing to the reduction of the country’s public debt.
The EPP does not include revenue from ANFAs and SMPs (these are estimated at 2.419 billion euros in 2014), while it includes only part of privatizations (gaming licenses, telecom licenses, sales of aircraft and extension of the airport concession agreement of the Athens International Airport), totaling only 119 million euros.
Meanwhile, a finance ministry report recently released showed that state budget net cash revenue showed a shortfall of 3.914 billion euros last year, of which 3.5 billion in the regular budget and 414 in the Public Investment Program. This shortfall could be reduced to 2.026 billion euros if revenues from ANFAs and SMPs (1.886 billion euros) were taken into account.