* Greek coalition government has margin of just 3 seats
* PM expels deputy for failing to back government
* Anti-bailout opposition has lead in polls
By Harry Papachristou and Lefteris Papadimas
ATHENS, Dec 21 The Greek coalition government's
majority in parliament shrank to just three seats on Saturday
after a lawmaker rebelled over a controversial new law to extend
property taxes to farmland.
Prime Minister Antonis Samaras's majority of 26 seats after
last year's election has dwindled to the point where it raises
the risk of political instability that could hamper recovery and
Greece's ability to meet targets for its international bailout.
Samaras expelled lawmaker Byron Polydoras from the
conservatives' parliamentary group after he refused to back the
new tax law demanded by Greece's lenders.
"Lenders' greed and poor judgement is leading us straight
towards humanitarian crisis," Polydoras said.
His expulsion reduces the parliamentary group of Samaras's
conservative-Socialist coalition government to 153 in the
The new legislation, passed on Saturday, replaces a deeply
unpopular property levy collected through electricity bills with
a broader tax on real estate, including land holdings.
Polydoras had argued that the new tax amounted to
Greece has suffered six years of recession and record
unemployment of about 27 percent as it has enacted austerity
policies under the terms of its 240 billion-euro bailout from
the European Union and International Monetary Fund.
Technocrat Finance Minister Yannis Stournaras said this
would be the last austerity legislation to be put before
lawmakers as the Greek economy begins to recover.
"I am absolutely convinced that parliament will have less
onerous issues to deal with in 2014," he said. The Greek
government and lenders expect the economy to grow by 0.6 percent
next year, after a 25 percent drop over the past six years.
Benefiting from growing frustration with austerity policies,
the main opposition, anti-bailout Syriza party has a 0.4-2.5
point lead over Samaras's conservative New Democracy party, two
newspaper opinion polls showed on Saturday.
The government projects the new property tax will bring in
about 2.65 billion euros ($3.62 billion) annually, less than the
2.9 billion euros it collected under the previous regime.
To offset the shortfall, it will cut its investment
programme by 200 million euros next year.
The new legislation also reduces the property transfer tax
to 3 percent from a previous 8 to 10 percent, to help boost
transactions in a moribund market. Apartment prices have plunged
by 32 percent since their peak in 2008.
Property accounts for a large chunk of household wealth as
Greece has one of the highest home ownership rates in western
Europe - 80 percent versus a European Union average of 70
percent - according to European Mortgage Federation data.
Inspectors from the European Union, European Central Bank
and International Monetary Fund troika agreed to the new tax,
even though they had raised concerns on whether Greece can
collect it effectively.
In a show of defiance against the troika, parliament
separately extended a ban on primary home foreclosures for one
Athens has been at loggerheads with its international
lenders over lifting restrictions on home seizures to allow
banks to recover bad loans and will legislate without their full
blessing as the two sides have yet to bridge differences.
Disagreements over the foreclosure ban was one of the
reasons the troika this month interrupted an inspection visit to
Athens for the third time, withholding a 4.9 billion euro
Athens, however, has no immediate funding needs and faces no
big bond payments until May.