Greece needs to review it for 2025, as there is more money than planned and this is because tax revenues have increased. At the same time, it repays aid loans earlier than the timetable. This states, among other things, a report by the German newspaper Handelsblatt, which, according to a translation from the Ministry of National Economy and Finance, reads as follows: Just last month, Greek Finance Minister Kostis Hatzidakis presented the draft budget for 2025 to the Parliament budget committee. Now he needs to review the plan again– because he has too much money. The Finance Minister recently presented the preliminary budget figures for the ten months of this year. Many of his counterparts from the European Union are likely to envy the evidence: Between January and the end of October, Greece created a budget surplus of 6.1 billion euros. The budget had forecast a deficit of 2.2 billion euros. The primary budget balance, which does not include debt servicing, was closed with a surplus of EUR 13.5 billion. The Finance Minister expected a primary surplus of 6.1 billion euros. Auster budget management also contributed to this result: Hatzidakis spent 4.8 billion euros less than the budgeted in the quarter. For the year as a whole, the Athens Ministry of Finance expects tax revenues of 68 billion euros instead of the originally planned 66.2 billion euros. Next year, the amount is expected to be EUR 70 billion. While the European Commission continues to predict in its latest autumn report a deficit of 0.1% of gross domestic product (GDP) for next year, government circles in Athens are now awaiting a balanced budget or even a small surplus. Greece achieves higher growth than planned There are two main reasons why tax revenues increased so sharply. The first is the strong economy. The Brussels Commission provides for economic growth of 2.1% for Greece this year. The government itself predicts 2.2%. This places Greece well above the EU average which is 0.9%. For the next two years, the Commission expects growth rates of 2.3% and 2% in Greece. The second reason for increasing revenue is the unexpectedly great success in combating tax evasion. In particular, the digitisation of the financial administration and the trend towards cash-free transactions in retail trade and between service providers promoted by the government bear fruit. In particular, these successes can be seen in VAT collected: From 2017 to 2021, the country reduced almost half the VAT gap from EUR 6 to EUR 3.2 billion, according to the European Commission. The VAT gap is the difference between theoretically possible revenue and actual revenue received. The public fund still loses about 15% of the VAT due. However, the government wants to reduce the rate to 9% by 2026. According to the European Commission, the average VAT gap in the EU in 2021 – more recent data are not yet available – was 5.3%. Minister of Finance Mr. Hatzidakis had promised additional revenues from 1 to 1.2 billion euros this year from the fight against tax evasion. The actual amount will be about two billion ECU. The next year, additional revenue is expected to increase to 2.3 billion ECU. This will give the Finance Minister more room for manoeuvre for tax cuts and pension increases. Faster debt repayment than expected Privatisation also contributes to a good cash situation. With expected revenues of EUR 5.8 billion, 2024 will be the most profitable year since the start of the privatisation programme in 2011. A total of 3.27 billion euros was collected only by the Minister of Finance in October for the 25-year concession of the exploitation of the Athens motorway Attiki Street. The proceeds from privatisation will be used to reduce debt. This is foreseen in the loan contracts with international lenders, which saved Greece from the threat of national bankruptcy several times during the 2010s debt crisis. Greece is making faster progress than expected in repaying its huge debts. On 15 December, the Finance Minister wants to repay bilateral loans from the euro partners totalling €7.9 billion earlier than the timetable. These are loans from the first aid package set up in 2010, which are not required until 2026 to 2028, as planned. The following year, the country is expected to pay off another five billion euros in the euro countries earlier than the timetable, Prime Minister Kyriakos Mitsotakis announced Monday at the “New Era of Greek Banking” conference organised by Bloomberg in Athens. According to the European Commission estimates, this will reduce the country’s debt ratio to 146.8% of GDP next year. This will be the lowest level since the start of the public debt crisis in 2010.
Handelsblatt: Greece repays loans earlier
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