Posted by WARREN MOSLER on September 27th, 2011
No compliance issues here- if the tax isn’t paid the property gets sold.
Don’t even have to know the owner.
September 27 (Reuters) — Greek lawmakers approved an unpopular property tax law on Tuesday that is crucial to a new austerity campaign the government has proposed so it can meet the terms of its international bailout and continue receiving aid funds.
All 154 of the ruling Socialist PASOK party’s deputies voted in favor of the measure, winning a majority in the 300-seat parliament.
The vote is the first test of the government’s capacity to win backing for a new wave of belt-tightening measures announced last week to convince the International Monetary Fund and European Union that Greece is worthy of an 8-billion euro ($11 billion) loan that Athens needs to avoid bankruptcy next month.
Having grown increasingly impatient at the slow pace of reforms, an EU/IMF team abruptly quit Greece in early September following disagreements over what was needed for Athens to plug fiscal slippage this year and next.
Finance Minister Evangelos Venizelos met representatives from the lenders in Washington over the weekend and Greek officials said the inspectors had asked Athens for written assurances it will implement the measures announced before they return.
“We are at the moment of truth for Greece,” European Commission spokesman for economic affairs Amadeu Altafaj said on Monday. “This is the last chance to avoid the collapse of the Greek economy. The criteria must be fully met in order to allocate the funds.”
The IMF and EU team has rapped Athens for dragging its feet on cutting the size of the bloated public sector because it has made little progress on a pledge to cut the 730,000 public workforce by a fifth, eliminate dozens of inefficient state entities and sell off loss-making state firms.
The government has failed to end rampant tax evasion, while the third year of economic contraction has undermined budget revenues and put Greece off-track for its goal of cutting the budget deficit to 7.6 percent of annual output this year.
Analysts say the property tax is a short-term measure that will not forestall a default most economists see as inevitable.
Activists have pledged to step up demonstrations in Athens’ central Syntagma square, where Greek riot police clashed with anti-austerity protesters on Sunday, firing tear gas in the first such unrest after a summer lull.
When lawmakers voted on an earlier austerity package at the end of June, more than 100 people were injured in two days of clashes with police at the square in front of parliament.
Prime Minister George Papandreou was in Germany for a meeting with Chancellor Angela Merkel during the vote on the tax bill.
He will discuss reforms ahead of another key parliamentary vote in Germany on Thursday meant to give more powers to the EU’s EFSF bailout fund.
Some 92 percent of Greeks believe the austerity measures are unfair and 72 percent believe they will not work, according to a GPO poll published by Mega TV on Monday. But only 23 percent said they would not pay the new taxes.
The poll also showed 77.8 percent of Greeks think the country should stay in the single currency zone while 54.8 percent saw a risk that Greece would default on its 340 billion euro debt pile in the next couple of months.
Greece has vowed to do what it takes to get the next tranche and announced on Monday it may close concession deals as part of its 50-billion euro privatization plan, another key condition for bailout aid.
The property tax is meant to help plug a gap of about 2 billion euros in this year’s budget to try and meet EU/IMF fiscal targets.