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Creditors leak offers to Greece: Primary Surplus 3% in 2017 and 3.5% in 2018

Short before the meeting between Prime Minister Alexis Tsipras with European Commission President Jean-Claude Juncker in Brussels, Greece’s creditors started to leak their offers to the debt-ridden country. One of the thorn issues is the Primary Surplus.

According to the Financial Times, creditors offer a low Primary Surplus for 2015 but an unachievable one for 2017.

2015: 1%

2016: 2%

2017: 3%

2018: 3.5%

At first sight, the offer doesn’t sound bad and could be considered as a “win” for Greece, when the Troika’s demands was 3% for 2015 and 4.5% for 2016.

However, given the real situation of the economy, the Greek government wants 0.8% for 2015 and 1% for 2016.

Can Athens accept it?

The meeting between Tsipras and Juncker is scheduled for 8:30 pm Brussels time (9:30 pm GR time). European Commission spokesman Margaritis Schinas said earlier today that no final decision should be expected, “it’s just a first approach.”

PS “First approach” on the deal two days before June 5th? No kidding?…

 

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9 comments

  1. Giaourti Giaourtaki

    Debt relief will not happen, as the ECB makes money this way, since 2010 the ECB earned 6 billion with Greek bonds.
    Isn’t it funny that they now buy bonds all over Europe but refuse to buy Greek ones while the European public still ignores that?
    I remember the strange sounding only “360 million” Germany made profit out of interest, these numbers must be wrong as alone France made 2 billion profit from Greece. Anyway one can find here the blocked 1.9 billion that proof that the credit is not 7.2 billion but 5.3
    http://www.griechenland-blog.gr/2015/06/frankreich-verdiente-an-griechenlands-verschuldung-milliarden/2135197/

  2. The primary surplus targets for 2015 (0.8% vs. 1%) are indeed close. However, if this a “win” it feels more like Pyrrhic victory. The sense of insecurity led to 20% bank deposit withdrawals over the past 6 months and untold damage to investor confidence (to the extent it existed). The other article today talks about a 2.2% (= 2.3% – 0.1%) reduction in the OECD 2015 GDP growth projections for Greece. The reduced primary surplus target just reflects the lower GDP growth. A arch-typical lose-lose situation 🙁

  3. Oohhh. Bad, bad Troika.

    Fact is: without a primary surplus of min. 3% Greece cannot start to pay back principal and interest of its debt and this means – the debt will continue to rise and Greece will continue to be not credit worthy in the eyes of private investors and it will continue to require bailouts and transfers.

    Greece’s neighbors will not like this. Funny how Syriza thinks that Germany is the hardliner. Wait and see what will come from them!

    • Giaourti Giaourtaki

      You have no idea regarding the networks of banks and companies in the United States of the Balkans and that contagion is not so much the danger for other Euro-members but for Greece’ neighbours, not to mention what it would mean if 500.000 people living in Greece might return to Albania, Bulgaria and Romania.
      Just keep the interest out of the calculations and until 2030 Greece has to pay only 50 billion instead of 200; paying interest is not paying back!

  4. The weaponization of debt.