Griekenland verhoogt belastingen om EU-budgetdoelstellingen te halen (en)

Greece is set to raise taxes on tobacco and alcohol, as well as value added tax, to meet EU budget targets.

The centre-right government is under strong pressure to slash the country's budget deficit, which reached 6.1 per cent of GDP last year, due inlarge part to the bill for the 2004 Athens Olympics.

Its partners from the eurozone have allowed Athens to take two years to bring the budget below the 3 per cent of GDP ceiling, set by the Stability pact rules.

Amid concerns that this year's deficit will soar over the 3.5 per cent target, the cabinet decided to push forward emergency measures.

The tax increases, approved on Tuesday (29 March) will bring in an additional 500 million euro this year, and VAT will rise from 18 per cent to 19 per cent.

"We have a tough adjustment effort to make and we need to keep up the pressure on revenue collection," the Greek finance minister George Alogoskoufis told the Financial Times.

He argued that with the adopted measures, the deficit reduction was back on track, as the increases would come along with intensive measures to crack down on VAT evasion and an extensive contraband trade in fuel.

The socialist opposition reacted to the government's decision to raise taxes as "unfairly targeting low-income groups", according to the FT.