NEWS

Gov?t heralds tough new measures

Finance Minister Evangelos Venizelos heralded fresh austerity measures over the weekend, chiefly a new property tax, a day after Prime Minister George Papandreou insisted that his government would do everything necessary to plug a gaping budget deficit and secure the next installment of emergency funding on which the country?s solvency depends.

The development came a few days before a scheduled visit by inspectors from the European Union and International Monetary Fund. The auditors are to decide whether the government has made enough progress in plugging a budget shortfall to qualify for a sorely needed 8-billion-euro loan tranche.

European Economic and Monetary Affairs Commissioner Olli Rehn hailed the government?s initiative and said he expected the inspectors to complete their audit by the end of September. ?I welcome the expressed commitment by the Greek government to fully meet the agreed fiscal targets this year and next,? Rehn said on Sunday.

Noting that the next two months would be ?hellish,? Venizelos told a press conference earlier Sunday that the government had no option but to do ?everything necessary? to cover a budget shortfall, estimated at 2 billion euros, following a deeper-than-expected recession.

The new charge, the latest in a series of tax increases, will range from 50 cents to 10 euros per square meter according to the value of the property and will apply for two years, Venizelos said, noting that the tax would be added to electricity bills to thwart would-be tax evaders. There will be concessions for the disabled, the unemployed and large families.

The minister also heralded cutbacks in public spending but Papandreou doused speculation about mass redundancies among civil servants.

In another, largely symbolic move, a month?s salary is to be cut from all elected officials, ranging from the president to the country?s mayors.

Papandreou conceded that the additional measures were tough but likened them to crucial supplies during war. ?These measures are the supplies we need to fight,? he said.

On Saturday night, addressing an audience of entrepreneurs and politicians at his annual economic policy speech, Papandreou said his key goal was to meet Greece?s commitments to its creditors and keep the country solvent. ?Every delay, every option other than strict compliance with our commitments is dangerous,? he said, adding, ?We will remain in the eurozone.?

In an apparent dig at EU leaders? procrastination in honoring the terms of a second bailout to Greece, Papandreou said the country ?would not become the scapegoat for institutional problems and populism in Europe.?

The PM sought to temper his grim message with some hope. A privatization drive and plans to simplify licensing for investment in the tourism and renewable energy sectors would create growth and jobs, he said.

He also heralded the issuing of licenses for undersea oil and gas exploration in the Ionian and off the island of Crete.

Papandreou concluded by appealing to Greeks? sense of nationalism and responsibility, appealing to business owners to pay taxes and to young Greeks not to leave. ?Greece can become a different county. But this cannot happen without you,? he said.