Europe’s two richest countries, France and Germany, have cast their weight behind their poorest peer, Greece, saying they do not intend to push the near-bankrupt nation out of the euro fold. Neither, they say, do they have a new proposal or plan to keep Greece’s running debt crisis from spiral out of control.

But on Wednesday French President Nikolas Sarkozy and German Chancellor Angela Merkel took a huge leap of faith by telling their embattled Greek counterpart George Papandreou that they expect him deliver on pledges to reboot the Greek economy.

It’s not the first reprimand Mr. Papandreou has faced in recent months, but it will probably be the last.

The threat, including an imminent cut-off of multi-billion loan funds from international lenders, has set fire to dragging Greek feet. Finance ministry officials are now scrambling to push through delayed reforms and make up for more than €2-billion in shortfalls recorded in the 2011 budget alone. “We have to rally together once more in a national effort,” Finance Minister Evangelos Venizelos said earlier this week.

That may prove tricky.

With recession biting deeper into the Greek economy and unemployment soaring — it’s expected to climb to 20 per cent by 2012 — austerity-hit Greeks are balking at added belt-tightening measures like never before.

On Friday, civil groups said they were mounting class-action suits to block a new property tax announced by the government this week in a desperate bid to close the €2-billion budget shortfall. A string of social networking sites and blogs have sprung up in recent days, rallying Greeks not to pay the new tax.

Seven in 10 Greeks already face difficulty paying a rash of tax hikes imposed by the socialist government in the last two years, according to opinion polls published earlier this month.

The new tariff aims to target high-earners. Still, it exempts monasteries, places of worship and charity funds run by the wealthy Greek Church while leaving none of the country’s five million homeowners untouched — not even the handicapped and unemployed, who are traditionally shielded by the state with special exceptions.

Enraging Greeks further are government threats to plunge homeowners into darkness if they fail to pay the tax, which will be charged through landlords’ electricity bills.

“It’s blackmail,” huffed Nikos Fotopoulos, the leader of the country’s most powerful union. “We will not allow the public power corporation to become a means of tax collection for any government.”

The measure signals what analysts are calling a complete collapse and humiliating failure of the country’s ailing tax collection system. It also mirrors the government’s repeated refusal to pursue radical spending cuts in the bloated public sector, a move that would upend decades of cozy ties between the ruling party and its core constituency.

“They are killing the private sector,” says former finance minister Stefanos Manos, who now leads a political action group. “The government should quit and Greece’s international lenders should spurn such disgraceful moves [ the tax levy].”

Perhaps. But until then, Mr. Papandreou — and Greeks altogether — have been given one last chance to stay in the euro.

Report by anthee carassava ATHENS – The Globe and Mail

That bottom in South Florida’s real estate crash can be tricky to spot.

Tuesday’s Case-Shiller numbers brought good news on home values, while obscure new data from a federal housing index shows accelerating drops in values across the region. The Federal Housing Finance Agency charts housing values using a method similar to the famed the Case-Shiller index, comparing recent sales to past sale prices on the same property.

The advantage to Case-Shiller’s South Florida index is it’s released each month, with new numbers out Tuesday morning showing a second month of increasing values in a region that includes Broward, Miami-Dade and Palm Beach counties.

The advantage to the quarterly FHFA index is it gives data for Broward and Miami-Dade separately.

With Tuesday’s June Case-Shiller numbers, the indices seem to be parting ways. Case-Shiller showed the first back-to-back increase for South Florida since last summer. But the FHFA index shows continued decline.

That’s probably better news for South Florida’s real estate market, since Case-Shiller is widely watched and FHFA is mostly overlooked by national media.

In May, Case-Shiller showed a 1 percent uptick for South Florida in May and then less than a 1 percent gain in June. But FHFA continues to show declines through 2011, with a 4 percent drop for Broward from the first to the second quarter and a 3 percent drop in Miami-Dade.

Taking a step back, both indices continue telling the same story: home prices are off from 2010 — needless to say, a pretty bad year for real estate values in South Florida. But the truly discouraging news for homeowners with the FHFA numbers is it looked like a plateau might have been forming at the end of last year.

FHFA shows property values down between 7 and 8 percent over 2010 levels in South Florida, compared to a 6 percent gap in the first quarter and about a 2 percent gap as 2010 wound to a close. For Case-Shiller, values are down 5 percent compared to a 2 percent to 3 percent gap at the end of 2010.

The losses aren’t close to what the region saw during the depths of the real estate crash, of course. But for the crash to hit bottom, we’re going to need all the charts to show some straight lines before recovery can truly begin.

Report by DOUGLAS HANKS – Miami Herald

House prices in Dublin have fallen nearly 50 per cent since their peak in 2007, the Central Statistics Office has said.

According to the CSO’s Residential Property Price Index, house prices in the capital are 46 per cent lower than 2007, while apartment prices have fallen 53 per cent since their high in February 2007.

Nationally, residential property prices fell by 1 per cent in the month of April. This compares with a decline of 1.7 per cent recorded in March.

The index, which looks at property on a national level, shows residential property prices throughout the rest of the country are 36 per cent lower than their highest level in 2007. Overall, the national index is 40 per cent lower than its highest level in 2007.

Dublin apartment prices fell by 1.8 per cent in the month of April and were 14.1 per cent lower when compared with the same month of 2010, while house prices fell 0.7 per cent and were 12.6 per cent lower compared to a year earlier.

Property prices throughout the rest of the country fell by 36 per cent in the first three months of 2011, and were 11.7 per cent lower than in April 2010.

Dermot O’Leary, economist at Goodbody Stockbrokers, said the national average price for a house was €180,000, back to levels seen in early 2002.

“It is clear that an unprecedented correction has taken place, but until the banking sector shows real signs of rehabilitation, facilitated by the restructuring efforts currently ongoing, there is little reason to believe that prices will rise,” he said.

Report by PAMELA NEWENHAM – Irish Times

Turn the clock back a few years and owning a holiday home in Ireland was a pipe dream for most people. Then the property crash happened. Now, however, a combination of falling house prices and low stamp duty rates means estate agents across Ireland are reporting growing interest from overseas, particularly the Britain. So is now the time to pick up the holiday cottage of your dreams? Are there bargains to be had? And is it a safe investment?

Ireland was the first European country to watch its entire banking system fail and the subsequent collapse of the property scene was famously described by Michael Lewis, in his Vanity Fair opus, as “breathtaking”. At the rate money currently flows into the Irish treasury, Irish bank losses – estimated at €106bn – would absorb every penny of Irish taxes for at least the next three years, he recently reported.

Patrick Honohan, the chairman of Ireland’s central bank, described the total injection of state cash as “one of the costliest banking crises in history.”

While the Central Bank is working on the basis of a 55 per cent drop in house prices between 2007 and 2013, Marcus Magnier, director with Colliers International, is one of many estate agents reporting that values have already fallen by that much – possibly more. “It’s been widely reported that the market is down 35 per cent from its peak and there’s another 20 per cent to go, but that’s rubbish,” he says. “There’s absolutely no point in waiting another 12 to 18 months for value. If we’re not at the bottom yet, we’re extremely close to it.”

It’s the cottages by the sea (think Cork, Kerry, Galway and Wexford) that have been hit particularly hard, he says. “Holiday homes indicate surplus monies, which simply don’t exist in the Irish psyche at the moment. All around the country, you’ll find them being sold at prices you literally couldn’t build them for. I’ve just had a lovely converted schoolhouse come on the market for €20,000 and other homes are going for even less.”

Potential buyers would be wise to view their purchase as a lifestyle choice, rather than an investment, warns Magnier. “Ireland is in for a slow recovery and it’s hard to even say where the finishing post is. Is it doubling your money? Making a little profit? I’d suggest people see their purchase as getting a smashing little place for friends and family to use at a fraction of the cost of what you can buy somewhere for in other parts of Europe.”

One thing you can count on is the holiday rental market, he says. “It hasn’t changed much, so you’ll get a far better return than you would have done in the boom years. Back then, people might have bought something for €1m and made €30,000 a year on rental. Now that property is probably worth €400,000 and you’ll still get €30,000 in rental fees.”

Remember hotel prices have taken a nosedive – upping the holiday competition – but on the other hand, says Ian McCarthy, MD of Sherry FitzGerald Countrywide, the Irish are more likely to holiday in their own country than ever. “So if you buy a cottage in, say, Wicklow, for €240,000 and you don’t use it all year round, you can expect around €850 a week for holiday rental in peak season and the rest of the year an average of €200-250 per week. That means you could generate an income of €15 to €20k a year – a 10 per cent return on your investment.”

Last week in Wexford, three in five of Sherry FitzGerald Countrywide buyers were UK based and that is not unusual at the moment, reports McCarthy. He adds that since January there have been visitors to their website from 134 countries – the top five being the UK, US, Germany, Australia and France. “But it’s not as if it’s suddenly gone mad everywhere. It’s very dependent on which county.”

The Shannon navigation system is popular among foreign buyers, for example, while areas that have seen less interest include the far west and north-west.

“It’s also important to remember that areas like Kerry, Cork, Wexford and Donegal have traditionally sold a lot of properties to the UK. It was only in the Celtic Tiger years that the Irish took over as the big buyers,” says McCarthy.

A further myth, he says, is that sellers are frequently accepting offers well below their lowest asking price. “On average, we agree a figure within 5 per cent of the asking price.”

In the country homes market, Knight Frank Ireland reports that nearly every second call is coming from someone abroad. “It’s a buyer’s market in terms of choice,” insists Robert Ganly, head of residential and country, although he advises buyers not to have high hopes of a high return on investment within the next 10 years. “It’s the way of life that needs to appeal to people and that’s not hard really, when you think that we don’t have huge traffic jams and crowds of people, but we do have lots of open space and nice beaches. It’s also a relaxed, friendly, easygoing country.”

Other good reasons to buy in Ireland, according to Savills, is the fact that it is an hour from Heathrow and there is excellent accessibility once you get there, even to remote places. “One of the best things about Celtic Tiger was the road systems that were created. There’s a fantastic network of motorways taking you in every direction, so whereas before it would have taken you hours to get somewhere, now it’s easy,” says Pat O’Hagan, from the Ireland country house team, who is seeing particular interest in houses within an hour of Dublin airport in the €500,000 to €700,000 region and for country house estates on 20 acres at €1m plus.

However, not all the overseas attention is translating into sales. “Certainly, there is growing interest, mostly from the UK and Irish expats. But at the moment, people are mainly checking out what is around,” he says.

Report by By Kate Hilpern – The Independent (UK)