Greek government to levy new property tax to address budget shortfall

The Greek government yesterday said it would levy a new property tax to plug a €2-billion shortfall in budget targets this year, which it had promised its international creditors in exchange for fresh aid.

In a news conference, finance minister Evangelos Venizelos said the property tax, which would be imposed over the next two years, was decided at an extraordinary cabinet meeting on fears  of  a Greek default taking hold.

"We need about €2 billion and a bit for us to cover our goals" for this year, Venizelos said, adding that 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."

Further, the cabinet also decided to cut wages of all senior elected and appointed government officials ranging from Greece's president to the country's 325 local mayors. All regional governors, government ministers and members of parliament would also be included among the officials.

"We also have to send a message that also shows a sense of discipline," said Venizelos. "The unanimous decision of the cabinet was to cut one month's salary for elected and appointed officials."