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Extra Levy on Water for Greece households and farmers for the sake of water companies privatization

Not one day passes without an extra charge, a one more charge that empties the Greek pockets and pushes thousands into poverty. Whether unemployed, low-pensioner, vulnerable group of the society, whether employee or entrepreneur, the nightmare of additional financial burden does not stop. Out of the blue, here comes an extra levy, this time on water consumption, the Greek government plans to impose as of next year. The extra charge will bear the truly authentic name  “Environment Levy” that will most probably land in the pockets of those who will be called to ‘invest’ in Greece. The country that is currently in sold-out mood.

Greek media focus on the households and farmers in Greece that will be charged with an extra levy on water consumption. The so-called “Environment” or “Green” fee has been decided by the Environment Ministry that establishes new rules for the cost and the pricing of water service. The decision to impose an extra levy on water comes ahead of the privatization of 50% of the state-run water companies of Athens and Thessaloniki. Coincidence? Hardly.

The ministerial decision justifies the extra charges on water, saying “the new levy will ensure sufficient cost recovery and long-term sustainability of investment in the urban cycle.”

According to daily Eleftheros Typos that revealed the story, the extra charge is not stable and will vary from region to region. It will depend on the water company, and the method of calculating the charge will even depend on the cost of maintaining the network.

The extra charges will be imposed on households as of 2018 and on farmers as of 2020. For households it will be called “Environment Levy”, for farmers “Irrigation Levy.”

The billing system consists of two different charges: a steady levy and a variable one depending on the water consumption. The variable levy will be a volumetric charge per cubic meter of water consumption.

The burden on farmers can be 6 euros per acre per year. Particularly affected will be farmers with large farms and crops that require a lot of water as the irrigation fee is applied per hectare of acre and per cubic meter.

The burden on households is difficult to estimated right now.

Water suppliers for agricultural use will be required to “ensure the gradual installation of water meters in all network users within three years.”

A 2.5-percent of the extra levy will go to the water providers for providing the relevant services. However, this 2.5% will not go to the state-run water companies of Athens EYDAP and Thessaloniki EYATH that are registered to Athens Stock Exchange.

The decision has the signatures of seven ministers and deputy ministers.

“For reasons of imperative public interest, a different pricing may be provided for specific uses of water such as in military facilities, the temporary reception / hosting structures for third-country nationals and the fire brigades,” the decision notes among others.

The agricultural world declares that it can not withstand other burdens and that the increase in irrigation cost was one of their red lines during their recent protests.

Since the economic crisis broke out eight years ago, farming has been an opportunity for many young Greeks affected by the high unemployment rates.

Two days ago, Al Jazeera published a report about young Greeks who massively turn to farming due to shortage of job opportunities.

On April 25 0217, the Ministry of Rural Development and Food reported that more than 15,000 people applied this year for the 12,000 EU subsidies available for first-time farmers in Greece. An increase from the 11,400 applicants in 2014 and the 8,600 in 2009.

First-time farmers face obstacles like any other business owner or entrepreneur in the country. Constantly changing tax laws and the lack of available bank loans, especially for farmers, are some of the main challenges.

Due to the economic crisis, banks have mostly stopped lending money, even to healthy businesses, while the government sold the formerly public Agricultural Bank of Greece to a private bank in order to raise money and repay its creditors.

This year the government raised farmers’ income tax from 13 to 22 percent, and to 45 percent on those whose annual income exceeds $43,600 (40,000 euros)

Next year, also the social security contributions for farmers will be raised.

PS KTG understands that the levy will be imposed on all water consumers, incl businesses, however, the media focus on the burdens for households and farmers. I could check whether the extra levy on water is included in the Staff level Agreement of May 2 2017. But unfortunately have no time…

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