ECONOMY

More budget measures in pipeline

The government is planning its second line of defense after intense pressure from international markets to provide further measures and despite the initial acceptance of its Stability and Growth Program by the European Commission. The plan provides for a considerable cut in expenditures through a reduction in a variety of allowances and social benefits and the increase of certain indirect taxes. Within the first three months of the year, the Finance Ministry is likely to proceed with the following changes: – A hike in the special consumption tax for fuel, which Finance Minister Giorgos Papaconstantinou has said is one of the lowest in the European Union. A 10 percent rise in the retail price of fuel will create additional revenues of 800 million euros for the state. – A new regulation for the infamous «imyipaithroi» – areas of homes originally planned as balconies and illegally closed for use as rooms. The regulation will be radically different to that of the previous government and is aimed at garnering some 1.5 billion euros for state coffers. – Abolishing exemptions to value-added tax. VAT may well be charged for services by lawyers, notaries, doctors, dentists, psychologists, nurses, private tutors, artists of all kinds, banking processes, mutual fund management, insurance and so on. – Radical changes to estimated property prices, used to determine their taxation, known as «objective values,» with the new values expected to be announced by June.