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

Investors looking for a good deal on an Italian property should be able to find an asset at a reasonable price, it has been claimed.

Director of the international department at Savills Charles Weston Baker told the National buyers can now find houses in the country for 20 to 30 per cent less than their value in 2007.

He explained that stricter planning laws in Italy have resulted in less oversupply than in other Mediterranean nations, such as Spain, but that the weak market has still pulled prices lower.

Meanwhile, Harrison D’Onofrio, Italy sales manager for Hamptons, recommended that potential buyers look at regions such as Puglia and Calabria.

Significant investment has been put into improving the local airports in these parts of the country, he explained.

According to the Knight Frank Prime International Residential Index, several popular areas in Italy saw house prices fall throughout 2010.

The firm revealed that Cortina, Tuscany, Venice, Florence and Sardinia all saw property values drop by five per cent during 2010, with Rome being the only Italian destination to register an increase last year.

Report – IBTimes Hong Kong

In early July, the pope gave a Vatican official special authority to act in the place of the bishop of Porec i Pula, Croatia, in signing a financial agreement compensating the Benedictines for the monastery in Dajla they felt forced to flee in the 1940s.

The property, which included vineyards and an olive grove, functioned as a parish until the then-communist government of Yugoslavia nationalized all church property in 1948 and turned the Dajla monastery into a home for the aged.

The Benedictine monks of Praglia, Italy, were given the property and established the monastery in the mid-1800s in the town on the Adriatic coast.

Croatian Prime Minister Jadranka Kosor met with Bishop Ivan Milovan of Porec i Pula Aug. 1 and, according to Croatian news reports, promised to write to the pope asking him to reconsider making the diocese compensate the Benedictines.

In a statement Aug. 2, the Vatican said the pope’s efforts to settle the dispute have lasted more than two and a half years and his decision to name a special commissioner for the diocese “aimed exclusively at reestablishing justice within the church, albeit with only partial compensation.”

The Vatican “regrets that this has been instrumentalized with an aim of presenting it in a political and demagogic light,” the statement said.

On July 6, the pope appointed as commissioner Archbishop Santos Abril y Castello, a former nuncio who serves at the Vatican as vice chamberlain, “who, on this specific issue, substitutes the local ecclesiastical authority, making it possible finally to reach a solution to the controversy,” the Vatican statement said.

The statement did not say how much money the diocese and the parish in Dajla were to pay the monks, although it did say that the value of the portion of property already sold by the diocese “is much greater.”

The Italian news agency ANSA reported that the Benedictines received compensation in the 1980s after Yugoslavia signed an agreement with Italy to pay Italians whose property was confiscated after World War II. Croatia gained its independence in 1991 and signed an agreement with the Vatican to return church property or provide compensation for it, giving the former monastery to the Diocese of Porec i Pula.

As the original owners of the monastery, the Italian Benedictine monks asked the diocese for the equivalent of $42.5 million for the property, ANSA said. Although the diocese sold off much of the land around the monastery to a developer planning a golf course, a commission of cardinals appointed by the pope to mediate the dispute set the figure at $8.5 million, ANSA reported.

Local government officials in Dajla have told Croatian newspapers that paying $8.5 million could bankrupt the diocese.

The Vatican statement said the concerns and arguments of the diocese “were taken into the proper consideration, according to criteria of fairness and justice, in the pope’s decision. Therefore, it is painful that the decision of the Holy See is being contested as if it had taken sides.”

Report by Cindy Wooden – Catholic News Service

Hundreds of thousands of Britons have lost money on illegal or unfinished homes in Spain. Will attempts by the British government to help them prove successful?

Last month when the Spanish government organised a property road show in the UK, attempting to lure Britons to invest in its saturated housing market, it was greeted with derision and angry public demonstrations. What did it honestly expect?

There are no easy solutions to Spain’s property scandal, which has affected hundreds of thousands of Britons who have either been duped into buying illegally built homes, affected by land grabs and retrospective coastal planning laws or lost deposits on off-plan builds. To Spain’s shame, corrupt councils, estate agents, property developers, builders and lawyers have all been complicit in the chain of events that have led to many losing their life savings on worthless properties, and in extreme cases having their “illegal” Spanish properties demolished.

The British government has been hugely aware of the property issues affecting British expats in Spain but has found itself in an invidious position, being unable to intervene in local property disputes which are a matter of Spanish internal law. Instead, last year, the British Embassy in Madrid appointed a temporary special advisor to get to grips with the complex issues of property laws and regulations in the country with an aim to offering comprehensive advice through its website to future buyers, as well as those encountering problems with an existing Spanish property.

In order to better understand the situation, the special advisor has already met with a number of resident groups throughout Spain and with diplomatic missions whose nationals have encountered similar problems. The findings from her report are now being used to help the British Embassy and consulates in Spain to understand how best to offer support to British expats.

In tandem with this, the British Ambassador to Spain has been meeting with key officials in the central and regional governments to raise awareness of the problems and to express concern for the plight of those affected. The issue is also being addressed through the UK Representation to the EU (UKRep) and the British Embassy in Spain, which is in discussion with MEPs, and staff from the European Commission and European Parliament offices in Spain.

Although the British government admits that there’s a long way to go before a solution is found for those caught up in the scandal, it insists that progress has been made. Already there have been reforms made to the criminal code, strengthening the penalties for crime linked to urban developments, and the Andalucian regional government is preparing a decree to regularise the majority of irregular properties. For future purchasers, a free step-by-step guide to buying property in Spain, translated into English, has been produced by the Registradores de España; hopefully opening the door to greater transparency in the process of purchasing property in the coming years.

For those distressed British expats caught up in their own personal property nightmare there is no immediate solution in sight, but at least their voices are finally being heard at a national and international level. Buying in Spain might not be as safe as houses yet, but with new legislation being enforced by the country’s regional governments, and with excellent property advice being offered online, the future certainly looks brighter.

Report by Anna Nicholas – The Telegraph