Money Matters, Simplified.
Greece imposes new property tax to avert default
by Jaspreet Virk - September 12, 2011 - comments
Prime Minister George A. Papandreou has vowed to introduce difficult reforms in addition to the existing measures.
Public anger against the austerity measures has failed to dissuade Greece government from introducing new spending cuts.
Amid protesters taking to streets and criticizing months of austerity, Finance Minister Evangelos Venizelos announced new property tax Sunday, to contain country's deficit.
Justifying the needing for imposing the tax, Venizelos said, “We have to find something that is fair, something that will be accepted by the community... something that can be implemented quickly, that will produce results immediately.
“The only measure that has all those characteristics, that can be universally applied, but which that is just with social characteristics, is a special property tax."
The new property tax, to be levied over the next two years, will be collected through monthly electricity bill, and range between 50 cents and €10, depending on the locality..
Tough reforms to meet budget goals
The cash-strapped government needs €2 billion ($2.7 billion) to cover its budget gap this year.
If Greece fails to meet its budget target, it won't qualify for the next installment of bailout funds on which its solvency depends.
Considering this, Prime Minister George A. Papandreou has vowed to introduce difficult reforms in addition to the existing measures.
“We will do everything necessary to keep Greece on its feet” said Papandreou, adding, “We will remain in the euro.”
The new property tax, to be levied over the next two years, will be collected through monthly electricity bill, and range between 50 cents and €10, depending on the locality.
Public anger boiling
While the government is leaving no stone unturned to assuage international lenders' concerns and qualify for next round of emergency funds, the efforts seem to have failed to pacify citizens' anger.
Thousands, which included students, anarchists, anarchists, taxi drivers and football fans, took to streets Saturday to protest against reforms.
At least 20,000 people joined the protests in Thessaloniki, according to BBC News.
A huge banner displayed by protesters read, “We owe nothing, we pay nothing, we sell nothing, we fear nothing."