Sales tax rise hit Greeks in the wallet

ATHENS: Greeks woke up yesterday morning to a new era: banks finally reopened after three weeks, but new austerity taxes meant that most everything was more expensive – from coffee to taxis to cooking oil.

In downtown Athens, people queued up in an orderly fashion as the banks unlocked their doors at 8am, but restrictions on most transactions remained. The daily cash withdrawal limit stayed at € 60 (R808) but the government added a weekly limit of € 420 that will be available from Sunday.

Sales taxes increased from 13 percent to 23 percent on many basic goods, including some meats, cooking oils, coffee, tea, cocoa, vinegar, salt, flowers, firewood, fertiliser, insecticides, sanitary towels and condoms. Popular services affected are restaurants and cafés, funeral homes, taxis, ferries and language schools.

After months of negotiations with creditors, Greece was forced to accept their demands to impose pension cuts and sales tax hikes.

Louka Katseli, head of the Greek Banking Association, said yesterday it was too early to say how long the cash controls would last. “I totally understand people who are anxious. But acting with fear produces the circumstances that people are afraid of,” she told state-run ERT television. “Since 2008, € 124 billion in deposits has been withdrawn.” – ANA