Greek Parliament Weighs Property Tax Amid Protests

The Greek government hoped to pass a new tax law in Parliament on Tuesday, despite wide opposition to the move by a Greek public already suffering under a policy of strict austerity. Ministers said the new property tax, which would be added to people's electricity bills, was needed to persuade the IMF and EU to release more bailout funds to prop up the Greek economy.

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STEVE INSKEEP, host: It's MORNING EDITION from NPR News. I'm Steve Inskeep.

DAVID GREENE, host: And I'm David Greene. Greece's government hopes to approve a new property tax in parliament today. There is wide opposition to the measure from a Greek public that's already feeling the pain from austerity measures. The government says the new tax is a must to prove that the country deserves more international bailout money to prop up the Greek economy. NPR's Sylvia Poggioli joins us on the line from Athens.

Sylvia, good morning.

SYLVIA POGGIOLI: Good morning.

GREENE: So this new property tax, if it is approved, would come on top of a slew of other tax hikes and wage and pension cuts. I mean, how deeply would this new tax dig into people's pocketbooks?

POGGIOLI: Well, you know, people here put their savings in real estate, so there's a very high rate of home ownership - some 85 percent of the population. This new tax on homes is seen as the latest humiliation for a middle class that's already lost jobs and seen wages and pensions slashed and is facing probably even more cuts in the near future.

In addition, the government wants the property tax to be collected through electricity bills, but the power company union says it won't be used as the sheriff who puts the gun to the head of the Greek people. The tax won't be easy to enforce. Greeks hugely mistrust their political leaders; 92 percent say the austerity measures are unfair; 72 percent believe they won't work.

And you know, there's just lots and lots of strikes - a transport strike yesterday, one today. And even the police held their own protest on Monday, unfurling a giant black banner with the words: payday, day of mourning.

GREENE: Wow. As I understand, even tax inspectors were going on strike, which is pretty incredible.

POGGIOLI: That's right.

GREENE: Well, with all this strong public opposition, I mean, is there a chance that parliament might, you know, cave to the pressure from the public and vote against this tax?

POGGIOLI: Well, you know, the socialist government has a very slim majority of four votes, and many ruling party lawmakers are very unhappy with the measures. But the Greek media say that the lawmakers realize that a no vote would probably bring the government down, and that could lead to total chaos at home and in the financial markets. The government says passage of the property tax is vital to convince international lenders that Greece is on track in deficit reduction and should get the bailout funds.

International pressure is incredibly intense. Yesterday, an E.U. spokesperson said in Brussels, we are at the moment of truth for Greece. 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. Pretty ominous words.

GREENE: Well, we know that the E.U., the IMF, pulled out its inspectors earlier this month out of frustration with the Greek government. I mean, what is the relationship right now? Does the Greek government seem to be cooperating now with the international lenders?

POGGIOLI: They say so, absolutely. And actually, what Greeks are saying is that they're feeling that their government is cooperating too much with the international community. And even, you know, several Greek economists sharply criticized these internationally imposed austerity measures they say that are damaging to economic growth. And they say it's a means to make Greece the scapegoat of the global economic crisis.

It's the German economy these economists and many Greeks will say that has been the one to benefit the most from the euro by massively exporting its goods to consumers in Greece and the rest of southern Europe.

In fact, I learned just recently that Greece is the country that bought the largest number of German-made Porsche Cayenne SUVS. And in honor of that, the grateful German company presented, with great fanfare, one of its newest models here in Greece.

GREENE: That's NPR's Sylvia Poggioli reporting from Athens.

Thank you, Sylvia.

POGGIOLI: Thank you.

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