
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