The surprisingly clear victory of outgoing Prime Minister Alexis Tsipras’ led coalition in Greece’s 20 September election has not only trumped pollsters but has again put the world’s largest shipping community on full alert.
Declaring his Syriza party has a “clear mandate” Tsipras has already said Greeks face a difficult road and recovery from the financial crisis would only come through hard work.
Syriza won 145 seats and will once again team up with the nationalist, Independent Greeks party whose 10 seats will take the leftists over the 150 threshold in the 300 seat parliament. Main opposition party New Democracy’ won 76 seats. The splintered natured of the vote saw just 56% of people vote, a record small number, while eight parties won seats.
The snap election was called after Syriza lost its majority in August when some of its MP’s defected in protest at the signing of an unpopular new financial bailout deal with international creditors. They formed the Popular Unity party but failed to enter parliament.
The result again sees the shipping industry facing a prolonged period of anxiety over its place in its homeland.
Crucial days now lie ahead as the shipping industry assesses the climate between the new administration and the country’s creditors, and waits to see whether shipping remains on the government’s hit-list as is being encouraged by creditors.
Greece’s creditors, led by the European Commission has sought to add shipping to the list of sectors which, in the words of EC president, Jean-Claude Juncker, “should contribute more”. An increase in tonnage tax and the phasing out of special tax treatments of the shipping industry have been singled out by Juncker.
Two years ago, the then-government sought to increase contributions from shipping in light of the crisis and under new regulations, foreign-flagged vessels managed in Greece were brought into the tonnage tax net for the first time at the same rate as Greek-flag vessels. Service companies have been subject to a 3% to 5% charge depending on income remitted, as well as a 10% tax on dividends and bonuses.
Further, the Union of Greek Shipowners pledged an additional $480m over a four-year period through a deal which sees virtually all Greek owners voluntarily paying triple measures of tonnage tax through to 2017 and this period is likely to be extended. And a solidarity tax levied on Greek companies has resulted in a more than eightfold increase in government tax revenues from shipping, says the UGS.
Indeed, pressure is undoubtedly going to increase on shipping to pay more and see companies to step-up their interest in possibly shifting their bases from the homeland to alternative locations. Many do have a Plan B in readiness and paper-companies have been registered in Cyprus by some of Greece’s best known names.
This has encouraged international administrations to come to Greece and explain what they have to offer as maritime centres and services for the worlds’ leading shipping community. First it was Cyprus, Singapore, London, then the United Arab Emirates and Canada and now The Bahamas Maritime Authority has announced it will be in town 6 October in a bid to building on its “Greek fleet” of 243 vessels of 17.6m dwt.
Copyright 2017 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.