Greece to receive EU part of bailout loan 1 day ahead of debt maturing

By Elena Becatoros, AP
Tuesday, May 18, 2010

Greece to receive EU part of bailout loan

ATHENS, Greece — Greece is to receive €14.5 billion in bailout loans from other European Union countries Tuesday, helping stave off default on around €9 billion of debt due a day later.

The loans from other countries that use the EU’s joint currency, the euro, are part of a €110 billion ($136 billion) joint EU and International Monetary Fund rescue package to prevent Greece from defaulting on its debt and dealing a severe blow to the shared currency.

Athens has said it could not pay off its maturing debt without the emergency loans.

Greece received the first €5.5 billion from the IMF last week, and is to receive its first installment from its eurozone partners on Tuesday, finance ministry officials said.

To secure the loans, the center-left government of Prime Minister George Papandreou has passed painful austerity measures, cutting salaries and pensions, raising consumer taxes and pledging to crack down on rampant tax evasion.

But in an embarrassment for the government, the country’s deputy tourism minister resigned late Monday after tax officials said her husband, a popular singer and former film star, owes millions of euros in unpaid taxes.

Angela Gerekou, a 51-year-old former actress who once posed topless for a Greek men’s magazine, stepped down hours after the scandal broke in a daily newspaper.

Her departure comes at the start of the vacation season, with hoteliers worried by recent mass cancellations of bookings after demonstrations in Athens against the austerity measures turned violent. No replacement has been announced.

Gerekou resigned “for reasons of sensitivity and sensibility, so that there cannot be the slightest pretext to hurt the government,” the government said in a statement, adding that she claimed she had no involvement in the tax affairs of her husband, Tolis Voskopoulos.

The finance ministry confirmed Voskopoulos faces criminal prosecution for €5.5 million ($6.8 million) in unpaid taxes and fines. It said the cases have not yet come to court, but Voskopoulos’ real estate assets have been frozen.

Gerekou said she had stepped down “to prevent, during these particularly hard times, my husband’s affair being used for generalized accusations against the government.” Both she and Voskopoulos said the tax debts arose before they met.

The finance ministry said an investigation is under way into the delay in collecting Voskopoulos’ debts, which were incurred from 2006 onwards.

Voskopoulos, 70, is one of the best-known representatives of Greece’s older generation of popular singers and nightclub stars.

Greek authorities recently published the names of alleged high-profile tax cheats, mostly doctors accused of not issuing receipts, and are seeking to catch tax evaders by using satellite photos to spot undeclared swimming pools — an indicator of taxable wealth.

The government has also pledged to make collection of the estimated billions in unpaid taxes a priority.


Associated Press writer Nicholas Paphitis in Athens contributed.

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