http://blogs.cfr.org/geographics/2013/12/04/greeksurpluses/
A primary budget surplus is a surplus of revenue over expenditure
which ignores interest payments due on outstanding debt. Its relevance
is that the government can fund the country’s ongoing expenditure
without needing to borrow more money; the need for borrowing arises only
from the need to pay interest to holders of existing debt. But the
Greek government (as we have pointed out in previous posts)
has far less incentive to pay, and far more negotiating leverage with,
its creditors once it no longer needs to borrow from them to keep the
country running.
This makes it more likely, rather than less, that Greece will default
sometime next year. As today’s Geo-Graphic shows, countries that have
been in similar positions have done precisely this – defaulted just as
their primary balance turned positive.
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