Greece Takes Step to Avoid Debt Default
By ALKMAN GRANITSAS
THESSALONIKI, Greece—The Greek government said Sunday it will impose a new property tax to cover a €2 billion ($2.7 billion) shortfall in budget targets this year, which it has promised its international creditors in exchange for receiving fresh aid.
In a news conference, Finance Minister Evangelos Venizelos said the property tax, which will be imposed over the next two years, was decided by an extraordinary cabinet meeting and comes amid growing fears of a Greek default in the weeks ahead.
"We need about €2 billion and a bit for us to cover our goals" for this year, Mr. Venizelos said, insisting the government would meet its deficit goals of €17.1 billion in 2011 and €14.9 billion next year.
"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," he added. "The only measure that has all those characteristics, that can be universally applied, but which is just with social characteristics, is a special property tax."
He said the tax, which will be collected through monthly electricity bills, would average about €4 per square meter and range between 50 cents and €10 depending on the neighborhood.
His remarks come as Greece's embattled government scrambles to cut public spending and step up its reform drive amid ultimatums from other euro-zone governments that further rescue money will be withheld if Athens doesn't deliver on promises.
Earlier this month, talks between Greece and officials from the European Commission, International Monetary Fund and European Central Bank—which assess the country's eligibility for fresh aid—were suspended in a dispute over whether Greece would need to take further measures.
Without the aid, Greece is expected to run out of money within weeks, according to senior Greek officials. Read more
