TradeWinds

Syriza, Greece’s radical left-wing coalition party, which in the latest general election opinion polls has a three to six-and-a-half-percentage-point lead over the conservative New Democracy party, has made public a substantial position paper that, if implemented, could lead to a flight from the Greek flag and even to shipping offices upping sticks.

Tax breaks that are not directly related to shipping activities will be abolished, while the party would re-examine from scratch all tax concessions given to shipowners and shipping companies, and their legal framework, with the aim of them “contributing according to their real abilities to the economy of our country”.

It would seek to change the constitutionally protected status of shipping companies and would also abolish bilateral agreements and reduce crew complements that have been signed.

Although the Union of Greek Shipowners (UGS) came to an agreement with the current government that owners would voluntarily double the tonnage tax they are paying, Syriza is clearly thirsty for more.

“The aim of our policy as regards oceangoing shipping should be to increase its contribution to the national economy,” the party said.

“Greek shipowners should participate in the public burden according to their potential,” Syriza candidate Thodoris Dritsas, who is responsible for shipping affairs, told TradeWinds.

Asked whether it would be difficult to tax companies with complex structures and offshore offices, he replied: “This is not going to be an issue.”

Dritsas also says there have been meetings between Syriza and the UGS but that while there is an ongoing dialogue, no meetings have taken place recently.

Shipowners and senior executives in shipping companies are hesitant to go on the record with their opinions of Syriza’s plans for the industry. The UGS has not made any public comment.

TopShips chief executive Evangelos Pistiolis feels the paper leaves a lot of room for discussion. As regards the issue of raised taxation, he points out that the reaction would depend on how much the increase is.

“Nobody ever does exactly what they say,” Pistiolis said. But assuming Syriza does everything laid out in the paper, he believes that some shipowners might consider leaving the country.

One top-tier executive called the proposals “ridiculous”, while another owner, who preferred to remain anonymous, says he believes Syriza is wrong in thinking they can impose conditions on ships that are not registered in Greece and are owned by companies based elsewhere.

He feels some of the facts contained in the paper are incorrect.

“I believe that if they were to try to do what they say it would create havoc in the Greek shipping cluster, and it would have some kind of boomerang effect,” he said.

Far-reaching agenda

Syriza’s plans do not only touch on oceangoing shipping. It also has proposals regarding seafarers’ employment, domestic passenger shipping, shiprepairs, port management, maritime education, the role of the shipping ministry and the Hellenic Coast Guard (HCG).

According to Bank of Greece figures, shipping brought in over EUR 12bn ($13.9bn) in foreign exchange in 2013, down from EUR 13.3bn in 2012, while the 2013 outflow totalled EUR 5.6bn.

Syriza notes that foreign exchange earned from shipping is shrinking and the 2013 total was the smallest incoming amount since 2004.

Syriza blames the “dramatic reduction” of foreign-exchange inflows on an equally dramatic decrease in the employment of Greek seafarers, wage cuts and reduction of expenses.

The policy paper makes no concessions to the worldwide economic crisis, which also hit shipping.

Job count slashed

At its peak in 1980, Greece had 3,942 ships under its flag and there were 60,000 job slots. According to 2012 figures, the number of jobs open to Greek seafarers had been slashed to just 13,026, of which the majority were on domestic ships, the party says.

For domestic shipping Syriza wants the passenger-ferry network to belong to the state and, because of Greece’s large number of islands, it believes the sector should serve the social and economic needs arising from that feature. Ports should also be under state control.

As regards the maritime academies, Syriza is in favour of abolishing what it calls their military structure and operation.

“The number of entrants should be proportional to the real needs of Greek merchant shipping,” the paper says but it makes no reference to the drop-out rate, which is relatively high.

Syriza also plans to make it obligatory for every ship to hire at least two students (one on the bridge and one in the engine room).

The party believes that a five-year plan should be drawn up for all sectors under the auspices of the shipping ministry. There should be a clear distinction between responsibilities of the political side and the services provided by the HCG.