Greece Unveils More Budget Cuts and New Property Tax

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Amidst heavy protest from its citizens over months of austerity measures, the Greek government has once again announced new budget cuts – including cutting the salaries for all elected politicians – and a one-time property tax in an attempt to raise 2 billion euros by the end of the year.

Speaking in a television broadcast after a six-hour Cabinet meeting in the city of Thessaloniki, Deputy Prime Minister and Finance Minister Evangelos Venizelos informed the public that the Cabinet had voted to cut a month’s wages from all elected officials, while imposing an annual charge on all property for two years – which will be levied through electricity bills in order to avoid tax evasion. The Finance Minister added that the government was set to speed up its vote on the 2012 budget, in order to meet its commitment to international lenders, as well as ensuring that the country would remain in the eurozone.

"We know that these measures are unbearable," admitted Venizelos. "But once more, we all have to rally together in a national effort."

According to the Finance Minister, this “new national effort" was critical given the unfavourable perception of Greece abroad, with renewed rumours of a debt default or Greece's possible exit from the eurozone.

If we can prove wrong those who are betting on Greece to fail, we will see the crisis recede,” he said.

The latest round of budget cuts by the Greek government came just days before auditors from the European Union and the International Monetary Fund were due to return to Athens to check on the government’s progress. As such, the new austerity measures were deemed necessary by the Greek government in order to meet a 2 billion euro budget shortfall that would have hindered the next installment of emergency loans.

Yet others do no see it in the same way. Babis Papadimitriou, an economic analyst for the private television channel Skai and for the daily newspaper Kathimerini, told the New York Times that the new property tax was “an act of desperation.”

“This is an admission of the failure of the government’s policies,” he said. “They are asking those who have already paid to pay again.”

Former conservative Finance Minister Stefanos Manos was less forgiving.

"These new measures are a total disgrace," he said, as quoted by the Los Angeles Times. "Rather than go after the bloated public sector, the government has saddled homeowners with more property taxes, for the umpteenth time."

Greece's lenders, he said, "should reject the plan and the government should resign."