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Greek shipowners reject European Commission call for big tax bite

THE main Greek owers lobby has rejected a European Commission call for the government to reform its ship tax, saying this could damage the mainspring of the national economy.

The owners' group said the proposed measures will encourage relocation of companies outside Europe. "The EU may lose a substantial part of its fleet and maritime cluster," they said.

Shipping is a vital generator of income for Greece, accounting for about seven per cent of its GDP and employing 200,000 people, Reuters reports.

The commission urged Athens to better target its tonnage tax system, citing competition and EU state aid rules.

But Greek shipowners, who are increasingly worried the commission's suggestions could hurt a sector already battered by the global slump in demand for dry freight commodities and record low freight earnings, rejected the proposals.

"There is no effective distortion of competition in the maritime field in the EU," the Union of Greek Shipowners said.

"Any fundamental changes to the institutional and fiscal framework in which the Greek shipping community is presently operating, would have unforeseeable consequences which would be detrimental not only for Greece but also for the rest of the EU."

If Athens consented, the commission would confirm it in a new state aid decision and the new rules would come into effect from January 2019 at the latest, the commission said threatening otherwise to open a formal state aid investigation.