European Central Bank and Primary Deficit

primary deficit: Yet Germany and Greece other creditors continue to demand that the country sign on to a programme proven to be a failure, and that few economists ever thought could, would, or should be implemented, according to The Guardian. The swing in Greece fiscal position from a large primary deficit to a surplus was almost unprecedented, but the demand that the country achieve a primary surplus of 4.5% of GDP was unconscionable. Athens has met its creditors’ demands more than halfway. Unfortunately, at the time that the troika – the European commission, the European Central Bank and the International Monetary Fund – first included this irresponsible demand in the international financial programme for Greece, the country authorities had no choice but to accede to it. The troika badly misjudged the macroeconomic effects of the programme they imposed. The folly of continuing to pursue this programme is particularly acute, given the 25% decline in GDP that Greece has endured since the beginning of the crisis. (news.financializer.com). As reported in the news.