Credit Card Lifestyle
The Times reports that the Greek Government has used one IMF loan to pay off another IMF loan of 750 million Euros which is a bit like someone using a credit card to pay their mortgage or rent.
Completely dumb as doughnuts, but the frightening thing is that these guys are running the country with crazy policies like abolishing taxes on second homes while asking European neighbours to pay off even more of their debts.
Recession is back to haunt the stage in Greek tragedy
Greece’s budget surplus is appreciated, but the shrinkage of the economy against a background of growth in the wider eurozone highlight its continuing problems Petros Giannakouris/AP
By Harry Wilson - Th Times
Greece has produced a surprise €2 billion surplus as the debt-ridden country said that its attempts to cut public spending had produced a positive budget in comparison to the deficit that had been expected.
As the eurozone released figures showing a rise in growth across the block for the first quarter of this year, Greece reported a budget surplus of €2.16 billion, well above the €287 million deficit that officials in Athens had estimated for the first four months of the year.
Although Greek tax revenues at €14.29 billion were almost exactly in line with official forecasts, public spending came in far below the level expected, with Athens slashing spending by €2 billion to €16.32 billion.
However, it was not all good news as the country moved back into recession as GDP dropped by 0.2 per cent quarter on quarter, having fallen by 0.4 per cent in the final three months of last year.
“It is evident that the major uncertainty over the country’s future is taking an increasing toll on economic activity,” Howard Archer, chief European and UK economist at IHS Global Insight, said.
This week, Greece narrowly staved off bankruptcy and a potential exit from the euro after the country’s central bank raided an emergency account to find the money to pay the International Monetary Fund the €750 million it owed.
Although the country’s budget surplus will be welcomed, the shrinkage of the economy against a background of growth in the wider currency union highlighted its continued problems. The 0.4 per cent first-quarter expansion was greater than that achieved by Britain and the United States and came as France grew at 0.6 per cent, its fastest rate in nearly two years.
In Italy growth hit 0.3 per cent, the same rate as Germany, which saw its rate of expansion slow from 0.7 per cent.
Muted net trade data appeared to be the main drag on growth, and Dr Archer warned of what he described as “limited export growth” despite the benefits to exporters of the falling euro. “Exports did rise in most eurozone countries, but this was outweighed by increased imports amid improved domestic demand,” he said.
Unemployment in the eurozone fell by 418,000 in the four months to March.
