Shipping and the Greece crisis

"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 all of the Greek shipping companies who have ships registered under the Greek Flag and those that employ Greek seafarers and have management offices in Greece.

Euro leaders have also suggested the Greek government increase the Tonnage Tax and phase out all special tax treatments that Greek shipping companies currently receive.

This all could not come at a worse time for Greek ship owners because 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.

While the majority of “Greek ships” are not owned by Greeks resident in Greece and do not fly the Greek flag the owners unfortunately may have to sever any relationship to companies or employees resident in Greece.

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. If there are any new taxes 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.