The Union of Greek Shipowners (UGS) on Friday reacted angrily to suggestions made by German Finance Minister Wolfgang Schaeuble that the Greek government had failed to keep promises to abolish a series of tax breaks for Greek shipping.
In an announcement, UGS President Theodore Veniamis talked about an "unwarranted attack" against Greece over the Greek shipping sector, which represented 50 pct of the shipping sector of Europe, while noting that the German finance minister appeared ignorant of the extremely favourable regime governing Germany's shipping sector.
"Mr. Schaeuble, pointedly overlooking the especially favourable regime governing German shipping, is turning with his statements against Greek shipping, which also happens to represent 50 pct of Community shipping, however - a primacy that clearly rankles.
At a time with the European Union is called on to defend but also to enhance the competitiveness of its shipping against the tough competition from shipping centres outside Europe, Mr. Schaeuble's criticisms are provocatively without foundation," the announcement said.
Veniamis said a question also arose whether the failure of German shipping policy, which despite the favourable regulations on all levels (ship ownership, management, individual), has not succeeded in supporting its shipping, was the motive that incited the minister to make such statements.
"If the aim of his statements is to torpedo the close ties between Greek shipping and its country, he proves that he does not desire to see Greece on a path to growth.
For Mr. Schaeuble's information, the Greek shipping community as a body has responded to the need to increase the revenues of the national economy, having decided four years ago on a voluntary basis to double its tax obligation even though this is historically protected by the constitution; an initiative that in practice proves its unity and its consistency toward the country," he added.
Shipping circles note that Schaeuble has repeatedly asked Greece to tax its ship owners so that it would not need further borrowing. According to shipowners, however, behind Schaeuble' demands is the fact that a large part of the fleet that Germany tried to "build" was bought up by Greek shipowners, even though Germany "has created the best taxation framework for shipping in Europe."
They also noted that Schaueble's criticism is mistaken because Greek shipping is a part of the European fleet and, if it turns to other countries outside Europe, the loss will be significant. Consequently, Greek shipping as a national capital must continue to enjoy the same legal framework so that neither Greece nor Europe are deprived of this productive pillar and its accompanying benefits, especially at this crucial economic conjuncture.
The sources also cited statements made by German Transport Minister Alexander Dobrindt a few months ago at the German shipowners union (Verband Deutscher Reeder), where he promised state support on crew and social insurance issues and said that Berlin will support the competitiveness of German shipping. These statements also followed a promise made by German Chancellor Angela Merkel to provide incentives for ships to register with the German flag.
The sources say Schaueble's statements were the result of pressure from competing European shipping interests and note that Greek tax in terms of tonnage is three times higher than the second-highest equivalent tax in the EU and 10 times that of Malta. They also noted that Germany's fleet was constantly shrinking, in spite of these lower tax rates, and many of these ships were sold to Greeks.
European shipping now accounts for 43 pct of the world fleet, while Greeks owns 47 pct of the European fleet, they pointed out.
Should the Greek government fall into Schaeuble's trap and enter into a confrontation with Greek shipping, the sources warned, Greece will risk losing its foremost productive support for the benefit of other states with a competing shipping industry.
"Greek shipping is the only sector of the economy that is not "overextended" and has no non-performing loans with Greek banks. The greater part of its funding comes from banks abroad, while all loans taken out with Greek banks, as they can certify, as being paid promptly. Conversely, German banks had lent that country's shipowners more than 100 billion euros in 2004 alone," they said.
Moreover, they point to studies carried out by Boston Consulting Group (BCG) and the Greece-based Foundation for Economic and Industrial Research (IOBE) showing that Greek shipping contributes 7 pct of the country's GDP, employs 200,000 Greek nationals and covers more than 30 pct of the trade deficit.
The sources also pointed out that the shipping sector had never been sucked into the Greek state's debt crisis, retaining its leading global position in spite of the very difficult economic environment in Greece and abroad.
The Greek fleet was made up of 4,585 ships with a total tonnage of 341.17 million dwt, up 22 pct since the previous year, representing 19.63 pct of the world fleet. It was also the biggest "cross-trading" fleet in the world, with 98.5 pct of Greek-owned capacity transporting cargo between third countries and providing a necessary service worldwide. Its importance for Europe was two-sided, both in terms of securing the EU's import/export needs and boosting its network of shipping activity, they added.
They also noted that Piraeus was the biggest shipping zone in the world where ship ownership was closely linked to its national base, unlike similar shipping zones in Singapore and London that attract a shipping base originating from the entire world.