Greece warned over potential ‘mass exodus’ of shipping companies

Challenges facing Greece and Piraeus, the home of Greek shipping, have become more evident at a time when global maritime clusters around the world are actively working to attract Greek shipowners.

Indeed, Greece will need to work hard if Piraeus is to retain or strengthen its standing as a maritime capital, with an alarming one in two Greek shipping companies ready to consider relocating their administrative bases abroad.

According to the findings of the study “Repositioning Greece as a Global Maritime Capital” conducted by multinational professional services firm, EY, some 56% of responding companies to the study would consider repositioning as the European Commission’s Directorate-General for Competition is causing uncertainty for the Greek shipping industry with its prolonged examination of its legal framework.

Indeed, EY reports some echoing sentiment of the Union of Greek Shipowners (UGS) that “a major exodus by Greek-owned shipping companies is possible”. The UGS has warned the prevailing uncertainty is threatening Greek shipping, which makes up half of Europe’s industry.

The EY study and UGS statements underline the prospect of relocations by shipping firms to new bases offering more favorable conditions – beyond Europe, or even within Europe, to non-EU countries – can no longer be ruled out.

Taxation and the regulatory framework are the main concerns with 84% of respondents in the EY survey referring to taxation and 64% to the regulatory framework as the main reasons that would prompt them to seek new bases. Singapore, London and Dubai ranked as the most popular alternative destinations with Cyprus also emerging as a nearby, competitive maritime cluster. All have actively been touting Greek business.

The EY study shed light on the industry’s perceptions of the competitive advantages and disadvantages of Greece as a basis for shipmanagement functions, the attractiveness of competitive maritime centers and the ways in which the competitiveness of the Greek maritime cluster could be improved.

Perceived advantages and disadvantages of the Greek flag are also examined. EY says: "The survey revealed human capital, the seamanship, along with geographic location and, obviously, ship-ownership, are the main competitive advantages of Greece as a ship-management center, while the lack of a stable regulatory environment governing the cluster, lack of access to financial institutions, poor infrastructures and tax issues are the main disadvantages.

However, EY says that "in spite of the perceived disadvantages of Piraeus and the growing attractiveness of competing maritime centers, the Greek shipping community remains confident about the role of Greece as a maritime center in the coming years and believes its enhancement would strengthen their business”.

EY says Maritime UK, a non-profit organisation which brings together the UK’s shipping, ports, marine and business services sectors to promote the UK as a world-class maritime center, could be a useful model for a similar Greek association.

Indeed, the benefits of continuing to foster the strong long-standing relationship between Britain and Greece, and in particular their shipping industries after Brexit, were emphasised by the ministers of shipping of each country, within the context of the 4th Greek-British Shipping Forum held in Athens, in July.

"Traditional ties between our two people will continue," Greece's Shipping and Island Policy minister, Panagiotis Kouroumplis said, adding "this cooperation in the field of shipping can have concrete and beneficial results for both".

But as EY noted, for the time being, Greece continues to find itself among the maritime capitals offering attractive environments for shipping companies, but the future is uncertain, sector pundits underlined, citing the fears felt over legal, regulatory and tax terms as primary concerns.

Posted 31 August 2017

© Copyright 2019 Seatrade (UBM (UK) Ltd). Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade.

David Glass

Greece Correspondent, Seatrade Maritime

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