Greece Imposes Property Tax in Desperate Bid to Avoid Default

Greece announced that it would enact a new property tax last night in a desperate last-ditch effort to avoid default. 

The debt-stricken country faces the distinct possibility of being denied an eight billion euro rescue loan from the European Union (EU) and International Monetary Fund (IMF), and is therefore scrambling to ensure the investment.  The property tax is the latest addition to the country’s ongoing austerity measures, which have sought to shore up a two billion euro budget gap.

“We must come up with something fair, socially acceptable, something that differentiates the rich from the middle class and the poor, something that can be applied immediately, that can pay off dividends quickly, that does not depend on the tax administration mechanism,” said Greek Financial Minister Evangelos Venizelos. “The only measure meeting all those qualities—a measure of direct, universal, application, although scaled in a fair way, with social features—is a special levy on real estate to be paid through the PPC (Public Power Corporation) bill.”

“Its weighted average cost per square meter is approximately four euros. This means that in the poorer areas with low price bands, people will be asked to pay a mere 0.50 euros per square meter. On the other hand, where we have luxury homes, for example in the northern suburbs of Athens, some will pay 10 euros per square meter,” he added.

Venizelos also added that the Greek Cabinet unanimously decided to cut an entire month’s salary from all elected officials of the state, in a largely symbolic gesture to already angry citizens.  “Every Greek man and woman listening to this must know that in our minds and in our souls we have every family, every unemployed person, every businessman, every farmer and every child that wants to find a different national mood and a country with open arms ready to provide them with opportunities,” he added.  “The circumstances are tough. We can make them easier if we engage in a fast and radical effort. This will be a push forward.”

EU and IMF auditors are expected to arrive in Greece in the coming days to assess the government’s progress on plugging its budget shortfall.  Markets around the world remain easily rattled and fearful of a Greek default.

Jacob Barron, NACM staff writer