* Campaigners accuse Church of avoiding tax payments
* Church says it shares burden of crisis, pays its taxes
* Socialist government doesn't dare touch Church, adviser
* Political pressure mounts for Church to do more
By Paul Taylor and Renee Maltezou
ATHENS, July 15 The Greek Orthodox Church owns
more land than anyone except the state, employs thousands on the
public payroll, has a stake in the nation's biggest bank, but
campaigners say its tax payments are derisory.
The Church vehemently denies accusations it is one of
Greece's biggest tax dodgers and says it is playing a vital
social, economic and spiritual role in this time of hardship.
With the third year of recession tormenting Greece's 11
million people, the Church has provided solace, comfort and
nourishment but activists say it's now time to dig deep into its
coffers to help with the bailout.
The Greek Orthodox Church has long enjoyed a privileged,
some would say cosy, status when it comes to taxes in a country
where it is responsible for the sole official religion, with one
critic calling its complex finances at best opaque.
But the sovereign debt crisis that has rocked the Greek
state, thrown hundreds of thousands of people out of work, and
forced painful cuts in salaries, pensions and benefits, has
raised fresh questions about the Church's tax position.
More than 100,000 people have joined a Greek Facebook page
"Tax The Church", and 29,000 have so far signed an online
petition urging the state to harness "the huge fortune of
churches" to reduce Greece's crushing budget deficit.
"The Church must pay its share of the tax burden," said
former finance minister Yannos Papantoniou. "It is totally
unreasonable in this situation that they contribute so little."
The Church angrily denies accusations it doesn't pay its
fair share. "This is a lie. We pay more land tax than ordinary
businesses and we pay 20 percent of our rental income in tax,"
said Father Timotheos, the Greek Church's Holy Synod spokesman.
Despite the growing demands for more transparency, Prime
Minister George Papandreou's PASOK socialist government doesn't
dare take on the powerful Church, an adviser to the premier
acknowledged, speaking on condition of anonymity.
Church finances, lands and other concerns are so
labyrinthine they are hard to penetrate, analysts said. The
Church's total tax payment is not made public, and Father
Timotheos said churches are responsible for their own taxes.
The Holy Synod paid 1.3 million euros in tax last year, said
Father Timotheos, adding: "We could have challenged this in the
European courts, but we didn't because we want to help the state
and our homeland."
There is plenty of anecdotal evidence about the assets of
the Church, which owns, for example, a stake of about 1.5
percent in Greece's largest bank, National Bank of Greece.
Given this kind of wealth, campaigners want the Church to
pay more towards its own upkeep.
The state at the moment pays the salaries of about 9,000
black-robed priests, including about 100 metropolitans who run
the Church, as well as the pensions of retired clergy.
It costs the public purse 268 million euros a year, Facebook
campaigners say. Father Timotheos said that was justified as the
Church handed over 96 percent of the land it held when Greece
became independent from the Ottoman Empire in 1821.
Over the centuries before Turkish rule, Byzantine emperors
gave vast swathes of the country to the men of God.
In the Ottoman era, many Greek families entrusted their
property to the Church for safe-keeping to avoid expropriation
by the Turks. Records were poor and it was not always returned.
The government is now under intense pressure from the IMF
and the EU to sell off public assets, including real estate.
Part of the problem is no one knows how much property the
Church has. Greece has no central land registry and the Church's
decentralised structure means it does not know what it owns.
"The Greek Church is paying almost nothing in taxes to the
Greek state for the total assets that it controls", one senior
tax expert, who declined to be named, told Reuters.
From the smallest village in northern Greece, where farmers
pay rent to the Church, to the smart suburbs of Athens, where
the Church owns prime real estate in the seafront millionaires'
neighbourhood of Vouliagmeni, the land holdings are enormous.
Stefanos Manos, another former finance minister from the
early 1990s, said the Church's real estate portfolio was worth
billions of euros but it had always resisted an outside audit.
Manos, a centre-right liberal, clashed on television this
month with the Metropolitan of Thessaloniki, demanding an
independent survey of church property and arguing that it should
take over the payment of clerical salaries and pensions.
Father Timotheos countered that the Church was effectively
subsidising the state. Several ministry buildings, universities
and hospitals in Athens are on church property, leased to the
state for a pittance or free of charge, he said.
The Church is currently lobbying authorities to be allowed
to develop Vouliagmeni which is zoned as protected forest.
Archbishop Hieronymos of Athens, the head of the Greek
Church, raised the issue with new Finance Minister Evangelos
Venizelos at their first meeting, Father Timotheos said.
The implication is that even though the government is
desperate for revenue, neither the state nor the Church has an
interest in a public day of reckoning over taxes and land.
"It is scandalous that we don't know, and indeed they don't
know what they own," Manos said. "It all starts from this opaque
situation. But no one wants to know. No one wants transparency."
The Church may not be the pillar of Greek life that it was a
century ago but it still wields influence in this predominantly
orthodox society and priests command respect and provide
continuity in many communities.
"It's the third rail of Greek politics. If you touch it, you
die," the adviser to Papandreou said, comparing the issue to the
high voltage electrified rail on some train tracks.
Asked why he had not acted to make the Church pay more while
he was finance minister in 1994-2001, Papantoniou said PASOK had
taken a beating when the Church fought the government over
national identity cards and had no stomach for another fight.
"It's a classic case of measuring the political costs," he
told Reuters in an interview. "The government paid a high price
over identity cards, and before that in a battle in the 1980s
over church property."
The clergy's ability to mobilise mass rallies was so great
the current prime minister's father, Andreas Papandreou, had to
abandon a plan to nationalise large tracts of church land.
No wonder one of Venizelos' first promises as minister last
month was to keep paying clergy salaries and pensions.
The Church says it is pulling its weight in the crisis by
stepping up assistance -- from soup kitchens to debt relief and
counselling -- for Greeks who have fallen on hard times.
Church communities are providing 50,000 meals a day for the
needy, an increase from 35,000 before the crisis, Father
Timotheos said. In some places, they have started "social
groceries", handing out staple foodstuffs free, he said, adding:
"We spent about 100 million euros on philanthropic acts in
2010 and we have increased since then. What more can we do?"
Churches were helping distressed people in debt to pay off
small loans, either directly or by putting them in contact with
wealthy donors, he said.
The Church is maintaining its own levels of employment at a
time when public and private sector jobs are being axed. Priests
are being trained to care for psychologically fragile
parishioners at a time when the suicide rate is on the rise.
Father Timotheos bristled at the suggestion that the Church
should be making a bigger contribution.
"People trust the Church above anyone else in this country.
Whenever they have a problem, they don't knock on the prime
minister's door or a minister's door," he said.
"Their doors are shut. Our doors are open."
(Additional reporting by Lefteris Papadimas; Editing by