STEVE INSKEEP, host: Okay, so that's the European big picture. Now let's get an update on the relatively small economy that sparked this crisis. Greece needs the next $11 billion in the European bailout. To get the money the government is trying to convince international lenders it can sharply reduce its budget deficit. Greece's prime minister aborted a trip to the United States to find more budget cuts. NPR's Sylvia Poggioli reports.
SYLVIA POGGIOLI: Greece has blamed the shortfall on a deeper-than-expected recession - the unintended effect of a year and a half of draconian austerity measures. Pressed by its European Union partners, the government announced a week ago yet another emergency tax: a levy on real estate aimed at collecting close to $3 billion. In a country where 85 percent of citizens' wealth is invested in houses and apartments, public outrage is intense, and the new austerity measure has been dubbed the monster tax.
Elinorosson is a middle-class neighborhood in Athens where Stella Kasdagli and Alexandros Karamalikis were able to buy an apartment a few years ago. Thirty-year-old Stella is managing editor at the Greek version of Cosmopolitan magazine. Her 35-year-old husband Alexandros lost his job as a record producer and is now a stay-at-home dad, raising their 13-month-old daughter Stefania. Up to now, Stella says, they felt like the lucky ones.
STELLA KASDAGLI: Until now, the impact has been mostly in our minds, I mean, fear about future and...
ALEXANDROS KARAMALIKIS: But this year, you paid more taxes. Stella paid more taxes. I didn't pay because, again, I didn't earn any money.
POGGIOLI: Like other Greeks, this couple has been hit by two additional emergency income taxes in just a year and a half on Stella's gross income of $54,000. And this extra property tax will force them to dip into their savings.
KASDAGLI: That's why I say I can absorb the loss, because I have the savings. If I didn't have them, things would be difficult.
POGGIOLI: Alexandros says that when the crisis hit, they agreed with the government's call for sacrifices. But by the second year, the situation was even worse, with more need for belt-tightening.
KARAMALIKIS: It's like a medicine that you give to a sick person, and he doesn't feel any better, and you keep giving him the same medicine. We don't think that is the right way to fix the problem, and certainly, it's not the fair way.
POGGIOLI: Judging from comments on social networks, a growing number of Greeks say they won't pay the property tax. But Alexandros worries about retaliation from Greece's international lenders.
KARAMALIKIS: Because we're frightened every day that if we don't pay the taxes, they will not give us the money, and the next day we'll be bankrupt. We are not sure if this is true, but we cannot take the chance. I don't know. No one knows.
POGGIOLI: George Katrougalos is one Greek who has decided not to pay the property tax. He's a constitutional lawyer who says it's unfair - unconstitutional because it's retroactive, and also a trap that leads to no growth.
GEORGE KATROUGALOS: You can ask sacrifices from the people, provided that these sacrifices are going to lead us somewhere. And the only thing that can lead us out of the trap is either have renegotiation of the debt, or a clear default. Default would be better. It's going to be better than the impasse.
POGGIOLI: Greek government adamantly rules this option out. Meanwhile, international lenders are demanding even bigger spending cuts - reportedly including massive public sector lay-offs, a 40 percent reduction in public sector wages and new gas, alcohol and tobacco taxes. But as lawyer Katrougalos says, the government is losing ground, and growing divisions among European governments over Greece's fate have made the people here more skeptical about the effectiveness of a seemingly unending series of austerity measures. Sylvia Poggioli, NPR News, Athens.
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