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Greek assembly passes new property tax law

(Xinhua)

10:42, September 28, 2011

ATHENS, Sept. 27 (Xinhua) -- The Greek parliament passed on Tuesday evening a new property tax law in a vote regarded as a crucial test for the progress of the austerity drive, which has been launched since last year to overcome an acute debt crisis that has alarmed Europe and the world due to fears of a domino effect.

The draft bill was approved in a roll-call vote along party lines by 155 positive votes against 142 negative ones with 297 present in the 300-member strong assembly, as thousands of protestors held one more anti-austerity rally outside the parliament building.

Despite fears of a possible "dissent" by ruling socialist PASOK party lawmakers due to public pressure over the painful policies, the government which holds a 154-seat parliamentary majority, won the battle. The bill was also supported by independent deputy Elsa Papadimitriou.

If the result was negative, the debt-burdened eurozone member country could face the prospect of snap general elections, at a time when it awaits a vital instalment of the sixth tranche of a multi-billion euro aid initially approved by European Union (EU) and International Monetary Fund (IMF) lenders in May 2010 to avoid default in exchange of radical changes until 2014.

Greek officials expressed optimism that Tuesday's vote and an additional austerity and reform package presented earlier this September that will be put before the parliament for approval in October, opens the way for the return of EU/IMF inspectors in coming days and the release of the 8 billion euro (10.88 billion U.S. dollars) tranche "in time" next month, before Greece runs out of cash.

The new annual property tax that will be collected through electricity bills over the next three years will be levied on built residential and commercial properties with electricity at rates ranging from 0.50 euros to 20 euros per square meter (0.68-27.29 dollars) according to the age of the building and the average property values in the area where each building is situated.

Only jobless citizens with incomes of up to 12,000 euros annually (16,380 dollars) will be exempted and disabled citizens with incomes of up to 30,000 euros (40,940 dollars) will be taxed at a low rate.

Low and middle income earners who are asked to pay bills that amount to their average monthly salary of 400-800 euros (545-1,091 dollars) by year end, claim that they can not afford to bear the extra cost.

On top of the extraordinary property tax, the government promotes fresh cuts on the incomes of civil servants and pensioners, an overhaul of the public sector that includes the dismissals of thousands of employees, further changes in taxation and a privatization program.

Under the burden of scenarios of an orderly or disorderly Greek bankruptcy, Athens struggles to meet the deficit reduction goal of 7.6 percent of GDP this year and all criteria for the further funding by foreign creditors, as labor unions and ordinary citizens also step up pressure against the implementation of the measures.

Several thousand protestors, including policemen who joined "indignants" protesting cutbacks and tax hikes this time, staged a peaceful demonstration in front of the parliament Tuesday evening during the vote, as a round of mobilizations in the mass transport sector, local administration and tax offices, continues this week.

Umbrella unions of private and public sector workers have called for two nationwide general strikes in October.

Following Tuesday's vote, local analysts point to the next crucial tests in parliament during the vote on the 2012 budget and the draft bill on the new austerity measures set scheduled for late October.

In the previous two parliamentary votes on austerity policies since May 2010 the government's majority has dropped from the 160 seats PASOK had secured after the October 2009 general elections to 154 seats due to "revolts" by deputies.

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