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Victoria Mindova

Measures to revive the property market and the construction industry, such as complete and unconditional liberalization of the market and hence for the reduction of unemployment requested the representatives of business circles in the country. All expressed their dissatisfaction with the lack of policies towards an economic development of the budget for the next year. According to players in the real business the government of George Papandreou and in particular the Ministry of finance is focused on the fiscal consolidation of the budget, without taking any specific actions to stimulate economic growth. The House of small producers and artisans calls the financial plan for 2011 "budget of the recession" and fears that the new additional increases of the VAT and fuel taxes will only deepen the crisis and worsen the condition of the local economy.

In addition to the general despair, indicative of the state of the economy are the data from the real estate market, which registered a huge drop. According to a publication in the newspaper Ethnos for the first 10 months of 2010 have only been made 12,000 purchases and sales of real estate in the entire Greece. In comparison for the same period in 2009 were made 85 000 transactions in this sector. After a long wait the final version of the budget disappointed the representatives of intermediary companies in the real estate market. The economist and biggest owner of one of the largest Greek brokerage offices IMPERIAL REAL ESTATE Yannis Revitis sent an open letter to the Minister of Finance Georgeous Papaconstantinou which includes nine proposals to revive the property market and construction business.

The biggest impression makes the proposal of Revitis to automatically issue residence permits for foreigners outside the European Union who are willing to invest one million euros or more in real estate. GRReporter contacted the businessman to give us a little more clarity about the problems encountered by foreign investors wishing to enter the Greek market.

Despite the difficult economic conditions there still are some people willing to develop new business in the country, but are impeded by thoughtlessness of the system. "A Chinese or a Russian entrepreneur comes in Greece who is willing to invest, but here he is delayed for months – this should not happen" Revitis is indignant. He explained that in times of such a serious crisis as is experienced at present in Greece, losing money because of administrative delays is extremely unacceptable. "The main problem is that they want to buy land or building in the border areas of the country (the islands, Greek Macedonia, Thrace, etc.) and they have to wait for permissions which might even be delayed by up to eight or nine months. No businessman can endure such a delay."

Another suggestion made in the open letter of Revitis to the Minister of Finance Georgeous Papaconstantinou is to eliminate the charge on the purchase of property worth up to one million euros for the period until the Memorandum for financial aid applies. It is necessary to introduce a stepwise taxation of property acquired by transfer, according to the property value, instead of the currently applied flat tax of 10%. Another option, which specialist offers is to totally abolish the tax on transfer of property or to be reduced by 50% when the new owner has undertaken and carried out repair and improvement works within three years after the acquisition. Revitis proposes also to reduce the tax on the purchase of premises for the development of commercial activity, and at the same time the government to freeze the increase of tax values of real estate for three years. For 2011 the Ministry of finance announced it would increase the tax value of the buildings so that the tax assessments get closer to the market prices and thus to increase revenue from property tax. According to the 2011 budget the government expects to collect 270 million euros by the end of the year, which is about 0.1 percent of the GDP.

The development of the real estate market is bound and the liquidity of banks and private entrepreneurs. To stir into action the frozen trade Yannis Revitis proposes to give 50% discount from the tax for the purchase of a building or plot by a Greek citizen who uses money deposited from a foreign bank account. For the agricultural lands the businessman also suggests the government to bring down half of the taxes imposed if the land is to be used as intended for the processing and production of agricultural crops.

Serious concerns for the future of the Greek economy expressed also the representatives of the Greek trade union and the Athens Chamber of Commerce and Industry. The President of the Athenian industrialists Constantinos Mihalos warns that the country is facing economic impasse and accused the government of infertility. In a press statement on the other hand the President of Chamber of Commerce Vassilis Korkidis said that the government has not coped with the protection of local interests and has overloaded the economy with measures that will weary taxpayers.