ATHENS: A new wave of austerity is threatening to swamp every corner of Greece economic life, including the country’s powerful shipping sector.
Under the country’s recent debt deal with its creditors, Greek Prime Minister Alexis Tsipras has proposed raising taxes and cutting subsidies for the country’s maritime industry, a global powerhouse that dominates the world’s oceans and has made some Greeks billionaires. It is a delicate balancing act.
Some experts say coming down too hard on the shipping tycoons could drive ships flying the Greek flag to so-called flags-of-convenience jurisdictions, something much of the Greek fleet has already done. These alternative national maritime registries offer both friendlier regulatory and tax regimes. At stake could be some of the 200,000 good-paying jobs the maritime sector provides in a country were unemployment runs as high as 25 percent for the general population and upwards of 50 percent for young people.
“If these measures are implemented, then we will see an overnight move of the major shipping companies from Greece to Cyprus, similar to the one that London has experienced a few years ago,” said Nikolaos Artavanis, assistant professor of finance at the University of Massachusetts Isenberg School of Management. “Many of these companies have already made preparations for this shift. It is needless to say that this development would be disastrous for the Greek GDP and balance of payments.”
Shipping is ancient business in Greece, and deeply embedded in the nation’s cultural heritage. From practically the beginning of recorded time, the country’s 227 islands and strategically placed mainland have served as a gateway between East and West. And to this day, the industry continues to play an outsized commercial role in Greece, ranking second to tourism its contribution to the Greek GDP.
For a sense of scale, consider that if the Greek maritime fleet were a national navy, with its 3,428 ships, it would be 1o times the size of the U.S. Navy; in fact, it would be more than twice the size of the world’s 10 largest national navies combined.
