From The Financial Times
April 23, 2019
Greece extended its budget surplus last year, reflecting the leftwing Syriza government’s expectations of a record-busting figure, in the latest sign of Athens pleasing investors after a decade-long debt crisis that took it to the brink of leaving the eurozone.
One of the bloc’s poorest members showed a surplus of 1.1 per cent of gross domestic product for 2018, compared with a revised 0.7 per cent for the previous year, and a far cry from its 5.6 per cent deficit of 2015, its statistics office said on Tuesday.
Figures published in December for the first 11 months of 2018 had shown that Greece would outperform the year’s target for the primary budget surplus — that is, before paying interest and principal due on public debt — by a much wider margin than previously forecast.
Athens is committed to a primary budget surplus of 3.5 per cent of GDP every year between 2018 and 2022, a criterion after it exited its €86bn third bailout in August and a significant step in seeking to put its financial travails behind it.
Greece’s consolidated gross government debt rose five percentage points to 181.1 per cent of GDP in 2018. Its GDP was €184.7bn, up from €180.2bn in 2017, Elstat said.
Overall, the 19-member eurozone reported a government deficit of 0.5 per cent of output at the end of December, from 1 per cent in 2017, with government debt down to 85.1 per cent, from 87.1 per cent, Eurostat said on Tuesday.
Italy bucked that trend, seeing its debt rising 0.8 percentage points year on year to 132.4 per cent of GDP — 1.3 percentage points higher than Brussels had forecast, in the latest indication that the Mediterranean nation is struggling to meet EU budget targets.
Greece, which was the focus of a debt crisis that began in Europe a decade ago, last month sold its first 10-year bond since it had emerged from a number of bailouts, raising €2.5bn of paper priced at a 3.9 per cent yield. Athens was shut out of international capital markets nine years ago and was forced to seek the first of three bailouts from the EU and the IMF.
Bond yields this month hit their lowest level in nearly 14 years, marking a stark contrast from eight years ago when they climbed above 40 per cent, according to Refinitiv data.