Greek Government Unlikely to Target Shipping Industry

By Jonathan Saul and Renee Maltezou

LONDON/ATHENS, Jan 30 (Reuters) – While Greece’s new leftist authorities appears set on a collision course with the European Union, it’s prone to avoid confronting the nation’s crucial transport business.

The Syriza get together of Prime Minister Alexis Tsipras, which swept to energy final Sunday, as soon as promised to tackle shipowners and their beneficiant tax allowances. But in latest months, it went quiet on tackling an business which, together with tourism, is among the few during which Greece stays globally aggressive.

Since forming a coalition, Syriza has confronted fellow EU governments with radical plans to renegotiate Greece’s money owed, overturn austerity insurance policies and cancel privatisations. Its stand on shipowners, in contrast, has been decidedly conciliatory.

“We are here to solve problems, not to create new ones,” mentioned Economy Minister George Stathakis, who oversees the transport portfolio. “There will be dialogue, discussion, and we will look for the best possible solution,” Stathakis, an economist who comes from a transport household, mentioned throughout a handover ceremony on the transport ministry.

This perspective might mirror realities of the business. While Greek transport magnates usually function from the Athens suburbs or the port of Piraeus, their corporations are largely registered within the likes of the Marshall Islands and the Turks & Caicos. The corporations are sometimes listed on inventory exchanges overseas and their ships usually fly overseas flags resembling Liberia’s.

Any try to impose heavy taxes after many years of digital fiscal freedom may provoke an exodus of oligarchs and companies that are main employers, additional damaging an financial system that has endured years of disaster.

Symeon Pariaros, chief administrative officer with Athens-run and New York-listed transport agency Euroseas, mentioned he doubted the federal government would quickly make main modifications affecting transport.

“My feeling is we will not see anything dramatic in the next months,” he informed Reuters, citing conferences between Syriza and the Union of Greek Shipowners. “I don’t feel even this leftist radical government would dare to put at risk such an important industry in our country.”

Greeks function among the world’s largest tankers and bulk carriers. According to former finance minister Gikas Hardouvelis, they account for 43 p.c of the European fleet and 15 p.c of the worldwide complete.

While the federal government badly wants extra income and a decrease debt burden, it could resist the temptation to exploit the money cow.

“In my discussions with people in high places, in business and politics, they assured me that the government has other interests to tackle such as debt forgiveness,” mentioned John Faraclas, a London-based transport commentator and impartial ship dealer.

“The people who will lose if the government attacks Greek shipping in its entirety will be the seafarers and the people who work in the offices,” mentioned Faraclas, who was an aide to a former Greek transport minister. “No Greek government will do this. There are offshore investments too, employing a great number of people all over the country.”

The Union of Greek Shipowners didn’t reply to requests for remark. The new authorities is anticipated to stipulate its plans throughout a vote of confidence early in February.

LIBERAL TAX REGIME

Greek transport has been a part of the nationwide financial lifeblood for hundreds of years. More not too long ago, a few of its tycoons turned worldwide celebrities resembling Aristotle Onassis, who married the widow of assassinated U.S. President John Kennedy.

Today the business accounts for about 7 p.c of nationwide GDP. Many Greeks work in different areas related to the sector resembling insurance coverage and finance.

While the tycoons profit from the liberal tax regime, their industrial attachment to the nation will not be taken with no consideration. “Greek shipowners have to be very competitive in the global scene. If the situation in Greece becomes uncompetitive, they can relocate along with their key employees,” mentioned Alexandros Argyros of Axia Ventures Group, an impartial funding banking boutique targeted on transport and Greece.

“They are not bound by their assets which are floating around the world and that makes it a lot easier than for any other businessman,” he mentioned.

While Stathakis is taken into account a extra pragmatic voice inside Syriza, a authorities official mentioned the finance ministry moderately than the transport ministry would cope with any tax points.

“Shipowners are protected by the constitution – which means that if they were to be further burdened, a constitutional revision would be required,” the official mentioned. However, the official added: “Shipowners would be very welcome to contribute, depending on their potential, and help boost the economy.”

After saying a halt to the privatisation of the port of Piraeus on Tuesday, for which China’s Cosco transport group and 4 others had been short-listed, the federal government indicated it might put the entire programme on maintain.

But shipowners weren’t too involved, with one describing this as “a populist move that is so far neutral for shipping”.

Nevertheless, Greek transport sources say many corporations have contingency plans to relocate to jurisdictions resembling Monaco or London. “If they come in too aggressively, the threat of a flight from Greece is real,” one shipowner mentioned.

While transport has skilled certainly one of its worst downturns, the proprietor acknowledged the size of Syriza’s victory. “There is room for additional contributions by shipping to public finances. It has to be a measured contribution that takes into account that it is a global business,” he mentioned. “If they do it in a measured way, people will pay.” (enhancing by David Stamp)