Sunday 22 September 2013

2013-20 Greece on the mend

According to the latest reports, Greece may achieve a primary surplus in 2013. This is a condition for asking for more help. So if they do manage to have a primary surplus, it will be a sign that Greece is on the mend.
What is primary surplus? It is a difference between current revenue and current expenditure, and does not count interest payments on debt.
I have always thought that it is a strange measure, with only one sensibel application. A country that has a primary surplus can default on its debt and, if nobody does anything, wil have sufficient funds to survive. But of course creditors will do something, for example take over export receipts. So you tell me what the significance of a primary surplus may be.

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