Greece Wants Greek Ship-Owners to Contribute More



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According to Posidonia Exhibitions SA, Greek ship-owners set a new record of orders to shipbuilding companies in 2013. The number of orders made by Greek ship-owners is estimated at 25 percent of the global order book.

In fact, last year Greek ship-owners cashed 13 billion dollars to purchase 275 newly constructed vessels of more than 24.5m deadweight tonnage.

According to the global order book, the Greek ship-owners are the biggest investors for 2013 as they invested approximately 4.5 billion dollars in this sector.

A steady source of funds for the expanding Greek fleet is the stock exchange market, primarily of New York.

Since the Greek ship-owners have the largest independent fleet in the world, Greece’s government decided to make their contribution to the country’s finances obligatory. Until now, Greek ship-owners were not obliged to contribute in any way to the country’s finances as they had agreed with Greek Minister of Finance to do so voluntarily.

In particular, the Greek ship-owners will have to pay a tripled tonnage tax in order to help Greece’s economy recover. The Greek ship-owners have already expressed their frustration towards this new measure taken by the Greek government.  The President of the Union of Greek Shipowners (UGS), Mr. Theodoros Veniamis claimed that this new measure is unconstitutional. He added that the problem is not the amount of money that many of the ship-owners will have to pay, but the fact that the Greek government violated its agreement with the Greek-shipping community.

The Greek-shipping community has made it crystal clear that it is willing to give the Greek government some time to reconsider this measure. However, if nothing changes, the Greek ship-owners threatened that their fleets will no longer sail under Greece’s flag or that their companies will be moved abroad.


10 COMMENTS

  1. Greek shipping companies employ Greek crews, pay pensions, maintain offices in Greece and indirectly contribute to the nation’s economy and taxes. In the past Greeks took great pride in building or repairing their ships in Greece, but that has largely died off as a result of the lack of competitiveness since the Euro. Despite this, there remains many service industries that have had long standing relations that would be jeopardized if the operations and flag registry were to go offshore. The government going back on its word is the surest sign that owner/operators will leave and take their jobs and money elsewhere.

  2. Polycrates: Though I usually agree with and admire your commentary–I have to disagree with you on this one. I still find it unconscionable that the Greek shipping industry–the largest and most profitable entity in Greece, does not have some obligatory tax burden to the nation that supports and allows its owners to live so well. I find the argument of the industry–that it “will just take the business headquarters somewhere else” a total cop out and a hollow threat at best. I know of no Greek families who are entrenched in the shipping trade–and through my line of work I have known many–who are ready or willing to live anywhere else (though most have numerous residences all over the world, anyway). Greece is just too much of a paradise for them–especially having the means to live at the top of the pyramid in their native society tax free.

    The fact that many Greek shipping companies fly foreign flags on their ships anyway is widely known. The statistics presented in the article above clearly shows these businesses are highly profitable and the families which maintain them have the sufficient funds to continuously expand their enterprises (new ships, sustained income)–so why not pay a healthy fair share?

    The old argument basically is polarized into those who have nothing financially to do with the shipping trade and are outraged that this business in Greece’s wort crises sine WWII does not help out–and those who give the arguments you do and are not surprisingly intimately connected with the industry.

    Can you imagine any large profitable corporations in the USA with or without international holdings being totally tax exempt just because they could threaten to move to Singapore or Abu Dhabi?

  3. @Polycrates:disqus: “Greek shipping companies employ Greek crews”: you mean Philippine/Indonesian crews. “lack of competitiveness since the Euro”: Since shipping is global, repairing is global. Try to compete with India, China, Indonesia, …, … It’s about time to come with facts. My belly tells me that they will seek for the maximum profit: no tax. And it doesn’t care to them if it’s Greece or Timbuktu. They only feed a myth: “We are Greek”. No way. Get rid of the parasites. Let them leave if they don’t contribute in a proportional way. And if they go: sell their properties in Greece.

  4. On this point we can agree to disagree. Few industries in the world face the punitive costs the shipping industry faces. It is a highly competitive, risky, high stakes where families and corporation must compete often against heavily subsidized national flags. They often operate on slim margins sometimes near or at a loss in order to maintain their vessel’s operations. The Greeks through their resourcefulness survived many shake outs but not without casualties. Onerous penalties, regulations and risk must be balanced against earnings which rises and ebbs as the tide. During times of prosperity or war, shipping has done well and others times the evidence of a bad market can be seen by the rafts of laid up (inactive) tonnage rusting in Eleusis Bay but still generating expenses. The banks and investors have their expectations and when markets are down so is the collateral value of their assets.
    Great seafaring nations such as the UK, Norway, Netherlands and the US have yielded to pressure and have been taxed nearly out of existence with the exception of tax incentives that are often temporary at best. As I stated in my earlier comment the macro-economic importance of the shipping industry on Greece is being largely ignored as the insatiable appetite for taxes wanders from one industry to another all but killing them.
    The threat of moving operations offshore is not new nor just a threat. It has happened before and will happen again if the government renege on their word. New York and London in the 1950s to 80s were once hubs of Greek ship holding groups. Most were closed as Greeks repatriated their principal operations to Piraeus. Many of these families Niarchos and Onassis to name two, established charitable foundations, built hospitals, schools, museums and yet others have underwritten the military in support of the country.
    To hedge against risk, many shipping groups diversified their portfolios into real estate which today is the more profitable side of their business recognizing offices and condominiums are not highly regulated, nor sink, pollute or subject to the union activity. So I caution you to be careful what you wish for, and be certain you are well informed before casting your wishes upon the sea.

  5. Using your train of thought how through the centuries did Greece ever remain a seafaring nation? How did they survive keeping up with the Phoenicians, Romans, Venetians, Egyptians, Ottomans and others?
    Greek flag vessels not Liberian or Panamanian owned by Greeks have specific requirements for crewing. I suggest you review and compare them to the international maritime regulations and seafarers unions. The rest of your comment smacks of income redistribution without knowing the facts nor the extent the industry contributes to the nation’s economy. In any business risk always must be offset by income or it is doomed to failure even in Timbuktu.

  6. One more point non-EU flagged vessels are owned by offshore companies and have a different tax liability than those registered under the Greek flag.

  7. Ok. It’s time for me to go and find some statistics about the Greek fleet (if I find any). Another thing that crossed my mind: I want to bet that the Greek shipping companies never, never will be taxed. Once in a while politicians shout: “let’s tax them”. Window-dressing. And that’s it. “Newspapers” will have something to write about, it gives some discussion in bars and that’s it. Those shipping guys are far to powerful (and have the money to stay so). We’re spending time on this for nothing. Have a nice weekend!

  8. If your assets are moveable like a ship it can always be moved to another country. If it is a foreign flag shipping company based in Greece it can relocate and is not taxed as a EU entity. If it is a Greek flag shipping company with ships under the Greek flag they can always be reflagged to another nation. If it is a shipping office located on Akti Miaouli in Piraeus it can always be closed and relocated elsewhere. However the service providers to those companies ie; accountants, lawyers, product sales, repair, crewing, engineers, naval architects, ship chandlers, parts suppliers, office administration, etc., are stuck with the permanent loss of business. Greek crewmen face the greatest threat to lose their well paying jobs to a Filipino, Pakistani, Sri Lankan or Indonesian so the company can remain competitive in the world marketplace.

  9. If your assets are moveable like a ship it can always be moved to another country. If it is a foreign flag shipping company based in Greece it can relocate and is not taxed as a EU entity. If it is a Greek flag shipping company with ships under the Greek flag they can always be reflagged to another nation. If it is a shipping office located on Akti Miaouli in Piraeus it can always be closed and relocated elsewhere. However the service providers to those companies ie; accountants, lawyers, product sales, repair, crewing, engineers, naval architects, ship chandlers, parts suppliers, office administration, etc., are stuck with the permanent loss of business. Greek crewmen face the greatest threat to lose their well paying jobs to a Filipino, Pakistani, Sri Lankan or Indonesian so the company can remain competitive in the world marketplace.