A hostage situation in the northern city of Thessaloniki ended peacefully on Thursday, as policemen arrested a Greek pensioner who was threatening to set a tax office building on fire due to a financial dispute.

The 72-year old man had stormed the office of the Fund of Deposits and Loans Bureau's local manager, poured gasoline and was holding her hostage, Greek media reported.

The elderly man was arrested following negotiations with police experts and no injuries occurred, police announced. It was the second such incident in a year in debt-laden Greece with a disgruntled recession-hit pensioner storming a tax office and holding employees as hostages.