June 23, 2011 / 7:06 PM / 6 years ago

Angry Greeks say new taxes to hurt middle class, again

<p>Police officers march during a rally against a new austerity package in Athens, June 23, 2011.John Kolesidis</p>

ATHENS (Reuters) - Greeks seething after two years of belt-tightening reacted in anger Thursday against a new round of tax rises and spending cuts worth some 3.8 billion euros which they said would again hit honest taxpayers hardest.

Coming on top of a 10-15 percent reduction on pensions and salaries over the last year and a half, the raft of new measures announced by Finance Minister Evangelos Venizelos will cut average earnings by a further 3-4 percent, analysts said.

People on the streets of Athens, who have protested for weeks over the government's plan to carve out savings of 28 billion euros by 2015, were livid at the measures they said once again failed to tackle rampant tax evasion and corruption.

"These measures aren't fair. Shop owners who pay their taxes are treated the same way as those who don't know what a cash register looks like," said Kostas Batsoulis, 37, a restaurant owner in central Athens.

"It would be better to sack 10,000 civil servants rather than the 1 million private sector employees who are being sacrificed right now," he added.

Unions and parties were also quick to slam the measures, saying slapping more and more taxes on the middle class was no way to kick-start an economy which has plunged into its deepest recession in 37 years.

"These people have lost their mind," said Ilias Iliopoulos, general secretary of the ADEDY public sector union. "These measures are hitting the same people, making them even poorer."

Unions have announced nationwide strikes for Tuesday and Wednesday, when the mid-term plan goes to parliament, and huge protests are expected in Athens and other cities.

In Syntagma square outside parliament, where protesters have camped for weeks to oppose the fresh wave of austerity, thousands gathered in the streets Thursday, beating drums and blowing whistles but their protest remained peaceful.

"Hypocrisy Must Stop"

Stathis Anestis, spokesman for the largest labor union federation GSEE, said the measures were particularly unfair because they once again failed to address the chronic problem of tax evasion, seen as the root of most of Greece's fiscal ills.

"This hypocrisy must finally stop in Greece," he said. "The rich doctor who sees 20-30 patients a day declares an annual income of 5,000 euros a year and the worker who can hide nothing is asked to pull the country out of the crisis?"

Venizelos said a "solidarity tax" ranging from 1 to 5 percent will be slapped on annual incomes over 12,000 euros, the self-employed will be hit with a 300 euro levy and heating oil tax will increase as well.

Analysts said that for the average annual Greek income of about 20,000 euros, this means a 700-800 euro loss, without counting heating costs and the levy on the self-employed.

Michalis Mihalides, 33, a press distribution worker who has a 3-month-old baby, said his family had already cut spending to the very basics to make ends meet and the new measures were spurring him to protest on the streets.

"What bothers me more than anything is that those who should pay, won't pay once again," he said. "It makes me mad because this crisis is not my fault. I didn't steal."

The main conservative opposition New Democracy party, which opposes the 110 billion IMF/EU bailout deal that saved Greece from bankruptcy last year, said the measures will push the economy further into recession.

"Venizelos' deal can be summed up in three words: taxes, taxes, taxes! Even on those who earn 570 euros a month. The measures even more painful and ineffective, will crush the middle class and finish off the poor," said Ioannis Vroutsis, a New Democracy spokesman.

Writing by Dina Kyriakidou; Editing by Alistair Lyon

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