A Greek orthodox priest holds an old flag of the Greek revolution which reads "freedom or death" during a peaceful rally outside the Greek Parliament in Athens last June 2011. Thousands of protesters gathered for a 12th consecutive day to protest at fiscal austerity measures and demand that Greece stop paying its debtors. They have also denounced politicians of all stripes as incompetent and corrupt. (Kostas Tsironis/AP)

With this Mediterranean nation’s finances on life support, some here have turned to the church for spiritual succor. Others say the government needs its cold, hard cash.

The Greek Orthodox Church has long been not just a religious force but also an economic one, with a stake in the Greek National Bank, landholdings second only to the Greek government and a clergy bankrolled by the state.

During a crisis that has already created widespread poverty, priests say they are serving the needs of hard-hit citizens whose government has failed them. But critics say that the church’s tax breaks and its tangled relationship with the political leadership here are starving the country of revenue at a moment when time and money are running short.

Greece is headed for parliamentary elections on June 17 that could determine its future on the shared euro currency, with a choice between leaders who favor the $163 billion bailout that is saving the country from bankruptcy and those who oppose the painful measures that come as a condition of the rescue. If voters reject the bailout, the government could be out of money by the end of August, with government employees short of their paychecks.

Those would include the more than 10,000 priests on state payrolls, who cost taxpayers $238 million a year. Tax breaks on the church’s landholdings keep even more money away from government coffers at a time when every euro counts, critics say.

Until 2010, even income from commercial properties that the church rented to businesses was shielded from taxation, a status that ended when former prime minister George Papandreou decided he could no longer be so generous. But a discussion about reducing the government contribution to black-robed priests’ pay has gone nowhere, a reflection of the political sensitivity of the topic in a country where 98 percent of the population is Orthodox.

“The church is very much intertwined with the government and with earthly power,” said Stefanos Manos, a former finance minister. “The church plays a role in Greece in politics and a lot of fields. Politicians do not want to go against it.”

At times the church has been too involved in government life, critics say, pointing to a series of corruption scandals that have dogged church leaders in recent years. Those include a thousand-year-old monastery’s land swap with the Greek government that cost taxpayers an estimated $130 million and contributed to the downfall of Prime Minister Kostas Karamanlis in 2009. Abbots and priests have cycled in and out of prison in connection with the land deals.

Church leaders say they are simply trying to raise funds to pay for ministries that are needed now more than ever. A monastery that claims a large chunk of Mount Penteli, outside of Athens, wants to build a major solar-power field there, another project that would bring in cash. The church says its priests are distributing more than 10,000 meals a day in Athens alone, stepping in to help while the government no longer has the money to do it itself.

As for finances, the church says it is feeling the pinch and contributing its fair share of sacrifice: Priests, as civil servants, are affected by austerity measures that allow only one new hire for every 10 retirements and have had their pay cut by 20 percent or more.

“We are the most trustworthy organization in the state. We’re subsidized by the state, because the state is not in a position to develop these structures itself,” said Father Timotheos Anthis, the spokesman for the Holy Synod of the Church of Greece, who cited a recent $31 million investment in the National Bank of Greece as an example of the church stepping in to support the government when called to do so. A high church official holds one of the seats on the bank’s board of directors.

“The church has little money, but it knows how to handle it,” Anthis said, adding that it had paid $15.7 million in taxes in 2011. That’s more than five times the amount in 2010, but still far less than its critics say is appropriate given its property claims.

A major new property tax levy announced last year as an emergency revenue measure exempted church possessions. The church says its landholdings come mostly from centuries of the devout donating their property when they die.

Not everyone is so impressed by the church’s contributions to the government purse.

“We don’t know exactly what the church owns,” said Antonis Mouzakis, an accountant who has been critical of the church’s tax arrangements, explaining that property records are in disarray and that land registries are incomplete.

Mouzakis said that the church was still sheltered from paying a fair share of taxes and that the full extent of its landholdings remains opaque.

“You can’t take in hungry families and say just because we’re giving food, we shouldn’t have to pay taxes. The people taking the food are paying taxes,” he said, questioning why priests were government-paid and why the church had escaped the new property tax that hit the rest of the country last year.

The tight identification between the Greek nation and the Greek church dates back all the way to the country’s declaration of independence from the Ottoman Empire in 1821, scholars say. But the government has paid clerics only since 1952, when it agreed to do so in exchange for taking over a portion of the church’s landholdings.

“This connection has very negative aspects for the church itself,” said Yannis Ktistakis, a human rights lawyer. “Greek politicians sometimes have the legal instruments to influence the internal life of the church.” The minister for education, lifelong learning and religious affairs signs off on new bishops, for example, and politicians cultivate ties with bishops, and vice versa.

For rank-and-file priests, the disputes about finances are secondary to their spiritual work, which they say will continue even if they no longer have any money at all.

“We see people with these basic needs looking through the rubbish,” said Father Ioannis Drongytis, the priest of a tiny church in Athens nestled underneath the Acropolis, as he sipped water from a plain metal cup. “The church is not me and my wallet. We are not going to stop being priests just because of some material problem.”

Special correspondent Elinda Labropoulou contributed to this report.