By Chrysostomos Tsoufis

Six hundred and sixty million euros higher than the initial estimates will finally be this year’s primary surplus, according to Finance Minister Kostis Hatzidakis.

Specifically, instead of 2.1%, the new medium-term fiscal program – Fiscal Structural Plan – which Greece will submit to the Commission during the week of October 7-11 – will predict 2.4%.

It is precisely these fiscal performances that allow the Greek Government to “extract” from Brussels their approval to increase its spending by approximately 3.5% in 2025 from the 3% set by the new fiscal rules.

And it is this Community approval – which will be officially finalized within the week – that makes possible the implementation of the Prime Minister’s announcements from the TIF platform as it gave €500-600 million “air”.

The higher primary surplus this year leads due to carry over and higher for 2025 and it remains to be seen where the Ministry of Finance will set the bar.

In the new medium-term program there will also be a downward revision of growth rates.

The initial assessment of the Greek side spoke of growth of 2.5% this year and 2.6% in 2025.

However, due to the obligation to comply with its forecasts Commission rates on paper will fall as Brussels estimates growth of 2.2% this year and 2.3% for 2025.

Reality says that the Greek economy ran the first half of the year at 2.2% based on ELSTAT announcements.

Despite the review at hand, the Greek economy will grow almost 3 times faster than the Eurozone’s (0.8%) this year. And it is precisely these strong growth rates that will help the government achieve its target of reducing the debt by 20 basis points by 2028.

According to Kostis Hatzidakis and the interview he gave to the Bloomberg agency, the government will attempt to reduce the debt within 4 years from 152.7% this year to 130% at the end of 2028.

In the direction of the rapid reduction of the debt, the continuation of the tactics adopted for the early repayment of loan obligations will also work. This time, €8 billion (debts under the first memorandum) due in the years 2026-2027-2028 (€2.65 billion/year) will be repaid early, with Athens paying €5 billion by the end of this year and the remaining €3 billion € in December 2025.

This year is the third time that Greece has accelerated the repayment of a loan package.

Denationalizations also work as reinforcements, a part in which there is finally a particular mobility. In the last year, the exit of the State has been completed in 3 of the 4 systemic banks (Eurobank, Alpha Bank and Piraeus Bank).

On Monday, the allocation of an additional rate of 1-10-12% of the National Bank that belongs to the Financial Stability Fund begins, a process that will be completed on October 2. In November 2023, the disposal of 22% of the 40% initially held by the HFSF was completed. On October 6, the concession of the Attica Road to the new concession holder (GEK TERNA) will be completed, which alone will reduce the debt by 1.5 units.

If the efforts of the Greek Government are successful, in 2029 Greece will cease to be the country with the highest (as a percentage of GDP) debt in Europe and will be replaced, according to IMF forecasts, by Italy.