"The financial crisis in Greece has somewhat overshadowed the ongoing debate about the current health of the shipping industry and its future outlook.
No doubt whatever the outcome of the current Euro crisis it will negatively affect Greek shipping companies who have ships registered under the Greek Flag and those that employ Greek seafarers or who have management offices in Greece.
Euro leaders have also told the Greek government to increase the Tonnage Tax and phase out all special tax treatments that Greek shipping companies currently receive.
This could not come at a worse time for Greek shipowners as most markets have not recovered over the past 6 years and still face delivery of a large number of new ships that have no contractual employment.
If Greece leaves the Euro zone there will be currency chaos and the Greek government will need even more taxes as their access to public capital markets will not be available.
Whilst the majority of “Greek ships” are not owned by Greeks resident in Greece and do not fly the Greek flag the owners may have to sever any relationship to companies or employees resident in Greece.
Whilst some analysts have stated that the “Grexit” will not affect the publicly traded companies that are owned or managed by Greeks, this may not be the case. Any new taxes that are imposed will have a negative effect on the companies’ earnings as they presently show no tax liabilities or payments in their financials.
The shipping markets meanwhile continue to struggle with the oversupply of tonnage and no growth in demand for the cargoes they carry."
Paul Slater is Chairman of First International
