Ministry of Finance and his head Kostis Hatzidakis presented a very clear picture this year, based on which they managed to maintain the primary surplus of the state budget for 1 billion euros more than last year.
In particular, instead of budgeted 4.9 billion euros (2.1% of GDP) he reached 6.02 billion euros (2.5% of GDP). The minister predicts that next year the surplus will be about the same – 5.9 billion (2.4% of GDP).
The primary surplus is calculated as the difference between government revenue and expenditure before interest payments on loans. That's the definition. In some circumstances a surplus may be normal, but when it becomes severe “bloated”this means that it occurs after “a lot of loss, blood and sweat”, and usually refers to members of society who belong to the lower strata rather than the elite.
The government's goal is to ensure proper repayment of loans taken by Greece from “Troikas”(“Troika” creditors). Because they understand that the Greek economy is facing difficulties, they constantly ensure that this money is taken away from Greek citizens in ways they do not understand, making them believe that their poverty is caused by the general economic situation in the world.
In short, the policy of memorandums continues at a time when the country should have withdrawn from them long ago. IN 2024 Greece will pay 6.98 billion euros interest payments, or 3% of GDPwhile in 2025 a slight reduction in related costs is projected to 6.9 billion eurosor 2.8% of GDP.
Primary surplus of 6.02 billion euros V 2024 And 5.9 billion euros V 2025 means that this money will be saved thanks to the increase in taxes collected by the Greek government from ENFIAand increase VAT (decisions were made in accordance with memorandums in 2014 And 2010 respectively), as well as due to reductions in government spending.
In particular, we are talking about the salaries of civil servants, the abolition of holiday and vacation benefits, the reduction of pensions and special emergency contributions introduced in 2010, 2012 And 2016. If these measures do not stop, the country will not be able to pay its debts.
In fact, the same policy of memorandums continues, which has become permanent and legitimate, and since the Greeks are accustomed to it, they do not realize it. Even if budget execution is better than in previous years, this does not mean that the remaining money will somehow be returned to Greek society.
Public sector in 2024 spent on 4.7 billion euros less than was stated in the budget (planned to spend 59.9 billion eurosbut it was only spent 55.1 billion euros), but this money will be used exclusively to pay off debts and loans.
Failing to implement government spending means that critical services, benefits or investments will be underutilized, something Greek citizens face every day.
Thus the notorious surplus 2024 was achieved due to the fact that the state reduced the costs with which it supports the state apparatus, the social state and public goods, and also due to the fact that it received increased revenues from high VAT, excise taxes, ENFIA and other taxes.
It is enough to look at electricity bills to understand that there is another (and not a small) tax hidden there. The other two are the regular IRS and Social Security funds.
It must be emphasized here that high prices play an important role in increasing income. Using simple grocery store logic and elementary school mathematics, you can understand that the higher the prices of goods and fuel, the greater the income that the government receives in the form of taxes.
Of course, one might wonder how growth happens in a country where there is no spending, everything is inefficient, and citizens feel that someone “will have access to their wallet for another 100 years” (because 100 yearsat least the slavery of memoranda will last)? It was the large influx of money from the Recovery Fund that worked wonders, and it is quite reasonable to ask what will happen when all this stops in 2025.
It should be noted that the Tsipras government did exactly the same thing and used the same tactics to create the notorious “airbags”which instead of approximately 15 billion euroswhich constituted the obligations under the memorandum, reached 35 billion euros, due to excessive taxation.
The Mitsotakis government now faces a difficult task: on the one hand, it is telling citizens that it is trying to curb price increases for political reasons, but on the other hand, it is actually maintains high prices, which allows him to realize his goals within the framework of the memorandum.
In addition, the government can't go for a significant reduction in taxes and significant expenses in order to make life easier for citizens, because in this case it will not be able to pay off the debts with which the country is burdened in accordance with the memoranda.
It is expected that 2026 will be very difficult for the Mitsotakis government because it has more there will be no resources to “convince” Greek societyWhat everything is going well. Unless, of course, the Mitsotakis government first gets involved in a war with Russia…
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