Greeks fume over property tax demanded by EU

Greeks were fuming on Thursday at a surprise property tax that could leave out Church holdings while the country is being urged to make "costly" sacrifices to secure EU-IMF rescue loans. The finance ministry, under pressure from its international creditors to plug a budget hole of more than 2.0 billion euros ($2.7 billion), on Wednesday further increased the tax which had already caused outrage when announced at the weekend. "This is not the worst of our nightmares as (our members) have long lost their sleep," the homeowners' union Pomida said in a statement. "Even unemployed owners, many of whom owe their homes to banks, get no full reprieve," it said. Instead of a maximum of 10 euros per square metre, the limit was placed at 16 euros and electricity will be cut off for owners who refuse to pay. "I was rubbing my eyes in disbelief," tax accountant Vangelis Abeliotis told Flash Radio, noting that households will have to pay 1,000 euros on average on top of existing wage cuts and price rises under a tough austerity programme last year. "There is no way a family with a child that is studying or is unemployed can cover this cost, many will not hesitate to just cut power in secondary homes," Abeliotis said. The uproar was reflected in Thursday's newspapers, with leftist Eleftherotypia speaking of a "great grab" on property. Pro-government Ethnos spoke of a "very costly lifeline" from Greece's main paymasters France and Germany, noting that the latest measures are a condition for the smooth disbursement of bankruptcy-saving loans to Athens. The leaders of Europe's two biggest economies were on Wednesday again given assurances by the Greek prime minister that he would stand by all the harsh austerity measures adopted to clinch the bailout. The finance ministry said the tax would not apply to state offices, embassies, religious buildings, monasteries, non-profit organisations, charities and amateur sports clubs. At the news that numerous Church holdings were being exempted from the latest tax, senior officials were bombarded with calls from irate ruling party lawmakers, Ta Nea daily said. "It is a disgrace to leave out thousands of church buildings," deputy Soula Merentiti told the daily. "There's no way this is passing parliament." The homeowners' union added sarcastically: "At least our final resting home will be tax-free." The Church of Greece commands significant political influence in a country where about 90 percent of the population are baptised into the Orthodox faith, using its power in the past to hold off state efforts to increase taxes on its considerable wealth. The country's leading cleric Archbishop Ieronymos on Thursday insisted that the Church of Greece "had never raised the issue of exemption from the emergency tax with respect to commercially-exploited property." A prominent northern Greek monastery, Vatopedi, with millions of euros in investments was at the heart of a property scandal that helped bring down the previous conservative government in 2009. The finance ministry said this week that Greeks have 400 billion euros ($548 billion) invested in property, roughly the size of the nation's sovereign debt which is more than 350 billion euros. Officials have also noted that regular property tax in Greece is open to avoidance as nominal land values, on which the tax is calculated, are about only a half of market values. "The total commercial value is one trillion euros according to Bank of Greece estimates," the ministry said. "This tax is 0.2 percent of the real value, a completely tolerable burden," it noted. The tax is to be collected through electricity bills in a bid to also tap properties held by foreign-based owners or offshore companies. But the powerful union of the dominant state operator PPC has threatened to oppose the measure. France said on Thursday that it was sending tax and customs experts to Greece to help the country build a tax system "worthy of the name".